Document:

exv4w1

Exhibit 4.1

EXECUTION COPY

FURNITURE BRANDS INTERNATIONAL, INC.

and

AMERICAN STOCK TRANSFER AND TRUST COMPANY, LLC

as Rights Agent

 

AMENDED AND RESTATED

STOCKHOLDERS

RIGHTS AGREEMENT

Dated as of

February 26, 2010

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	Section	 	Page	 
	1. Certain Definitions
	 	 	1	 
	 
	 	 	 	 
	2. Appointment of Rights Agent
	 	 	8	 
	 
	 	 	 	 
	3. Issue of Rights Certificates
	 	 	8	 
	 
	 	 	 	 
	4. Form of Rights Certificate
	 	 	11	 
	 
	 	 	 	 
	5. Countersignature and Registration
	 	 	11	 
	 
	 	 	 	 
	6. Transfer, Split Up, Combination, and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost, or Stolen Rights Certificates
	 	 	12	 
	 
	 	 	 	 
	7. Exercise of Rights; Purchase Price; Expiration Date of Rights
	 	 	13	 
	 
	 	 	 	 
	8. Cancellation and Destruction of Rights Certificates
	 	 	15	 
	 
	 	 	 	 
	9. Reservation and Availability of Capital Stock
	 	 	15	 
	 
	 	 	 	 
	10. Series B Preferred Stock Record Date
	 	 	17	 
	 
	 	 	 	 
	11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights
	 	 	18	 
	 
	 	 	 	 
	12. Certificate of Adjusted Purchase Price or Number of Shares
	 	 	25	 
	 
	 	 	 	 
	13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power

	 	 	25	 
	 
	 	 	 	 
	14. Fractional Rights; Fractional Shares; Waiver
	 	 	29	 
	 
	 	 	 	 
	15. Rights of Action
	 	 	30	 
	 
	 	 	 	 
	16. Agreement of Rights Holders
	 	 	30	 
	 
	 	 	 	 
	17. Rights Certificate Holder Not Deemed a Stockholder
	 	 	31	 
	 
	 	 	 	 
	18. Concerning the Rights Agent
	 	 	31	 
	 
	 	 	 	 
	19. Merger or Consolidation or Change of Name of Rights Agent
	 	 	32	 
	 
	 	 	 	 
	20. Duties of Rights Agent
	 	 	32	 

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	Section	 	Page	 
	21. Change of Rights Agent
	 	 	35	 
	 
	 	 	 	 
	22. Issuance of New Rights Certificates
	 	 	35	 
	 
	 	 	 	 
	23. Redemption
	 	 	36	 
	 
	 	 	 	 
	24. Exchange
	 	 	37	 
	 
	 	 	 	 
	25. Notice of Certain Events
	 	 	37	 
	 
	 	 	 	 
	26. Notices
	 	 	38	 
	 
	 	 	 	 
	27. Supplements and Amendments
	 	 	39	 
	 
	 	 	 	 
	28. Successors
	 	 	40	 
	 
	 	 	 	 
	29. Determinations and Actions by the Board of Directors
	 	 	40	 
	 
	 	 	 	 
	30. Benefits of this Agreement
	 	 	40	 
	 
	 	 	 	 
	31. Severability
	 	 	40	 
	 
	 	 	 	 
	32. Governing Law
	 	 	40	 
	 
	 	 	 	 
	33. Counterparts
	 	 	40	 
	 
	 	 	 	 
	34. Descriptive Headings
	 	 	41	 

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     This AMENDED AND RESTATED STOCKHOLDERS RIGHTS AGREEMENT, dated as of February 26, 2010 (this
“Agreement”) by and between Furniture Brands International, Inc., a Delaware corporation
(the “Company”), and American Stock Transfer and Trust Company, LLC, a New York limited
liability trust company (the “Rights Agent”).

     WHEREAS, the Company previously entered the Stockholders Rights Agreement, dated as of August
3, 2009 (the “Original Rights Agreement”).

     WHEREAS, in connection with the Original Agreement, effective August 3, 2009 (the “Rights
Dividend Declaration Date”), the Board of Directors of the Company authorized and declared a
distribution of one right for each share of Common Stock, no par value, of the Company (the
“Common Stock”) outstanding at the Close of Business (as such term is defined herein) on
August 13, 2009 (the “Record Date”), and authorized the issuance of one such right (as such
number may hereafter be adjusted pursuant hereto) for each share of Common Stock that shall become
outstanding (whether originally issued or delivered from the Company’s treasury) between the Record
Date and, except as otherwise provided in Section 23 herein, the Distribution Date, each such right
(a “Right” and together with all other such rights distributed or issued pursuant hereto,
the “Rights”) initially representing the right to purchase, upon the terms and subject to
the conditions hereinafter set forth, one Unit of Series B Preferred Stock (as defined herein).

     WHEREAS, as of the date hereof, the Rights are redeemable under the Original Rights Agreement,
and the Company desires to amend and restate the terms of the Original Rights Agreement.

     WHEREAS, effective as of 4:00 p.m. New York time, on February 26, 2010, this Agreement amends
and restates, and supersedes in its entirety, the Original Rights Agreement, and from and after
such time, each outstanding Right and each Right hereafter issued shall be exercisable in
accordance with and subject to the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth,
the parties hereby agree as follows:

     Section 1. Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:

     (a) “Acquiring Person” shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 4.75% or more of the
shares of Common Stock then outstanding, but shall not include the Company, any Related Person, or
any Exempt Person. Notwithstanding the foregoing:

(i) No Person shall become an “Acquiring Person” as the result of: (A) an acquisition of
Common Stock by the Company, which, by reducing the number of shares of Common Stock
outstanding, increases the percentage of the shares of Common Stock Beneficially Owned by
such Person, together with all Affiliates and

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Associates of such Person, to 4.75% or more of
the shares of Common Stock then outstanding, (B) the grant of any equity compensation award
(including, without limitation, an equity compensation award in the form of options,
warrants, rights, restricted stock, or similar securities) by the Company to such Person if
such person
is a director, officer, employee, or agent of the Company, or any adjustment to the number
of shares of Common Stock represented by such equity compensation award pursuant to the
terms thereof, (C) any unilateral grant of any security by the Company to such Person, or
(D) an Exempt Transaction; provided, however, that a Person who or which,
together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of
            shares of Common Stock representing 4.75% or more of the shares of Common Stock then
outstanding by reason of any of the transactions described in (A) through (D) of this
Section 1(a)(i) shall nevertheless be deemed to be an “Acquiring Person” if, subject to
Section 1(a)(ii), such Person, together with all Affiliates and Associates of such Person,
thereafter (and while such Person, together with the Affiliates and Associates of such
Person, continues to be the Beneficial Owner of 4.75% or more of the then outstanding shares
of Common Stock) becomes the Beneficial Owner of any additional shares of Common Stock,
except as a result of (w) a dividend or distribution of shares by the Company made on a pro
rata basis to all holders of Common Stock, (x) the issuance of shares by the Company
pursuant to a split or subdivision of the outstanding Common Stock, (y) the grant of any
equity compensation award (including, without limitation, an equity compensation award in
the form of options, warrants, rights, restricted stock, or similar securities) by the
Company to such Person if such person is a director, officer, employee, or agent of the
Company, or any adjustment to the number of shares of Common Stock represented by such
equity compensation award pursuant to the terms thereof, or (z) any unilateral grant of any
security by the Company to such Person; and

     (ii) If the Board of Directors determines that a Person who would otherwise be an
“Acquiring Person,” as defined pursuant to this Section 1(a), has become such inadvertently
(including, without limitation, because (A) such Person was unaware that it Beneficially
Owned a percentage of the then-outstanding Common Stock that would otherwise cause such
Person to be an “Acquiring Person” or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Stock but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement), and such Person divests as promptly as
practicable a sufficient number of shares of Common Stock so that such Person would no
longer be an “Acquiring Person,” as defined pursuant to this Section 1(a), then such Person
shall not be deemed to be or to have become an “Acquiring Person” for any purposes of this
Agreement.

     (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the Exchange Act Regulations, as in effect on the date of this
Agreement, and to the extent not included within the foregoing clause of this Section 1(b), shall
also include, with respect to any Person, any other Person (whether or not a Related Person or an
Exempt Person) whose shares of Common Stock would be deemed constructively owned by such first
Person, owned by a single “entity” as defined in Section 1.382-3(a)(1) of the Treasury Regulations,
or otherwise aggregated with shares owned by such first Person

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pursuant to the provisions of the
Code, or any successor provision or replacement provision, and the Treasury Regulations thereunder,
provided, however, that a Person shall not be deemed to be the Affiliate or
Associate of another Person solely because either or both Persons are or were directors or officers
of the Company.

     (c) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“Beneficially Own” and to have “Beneficial Ownership” of any securities:

     (i) that such Person or any of such Person’s Affiliates or Associates beneficially
owns, directly or indirectly (as determined pursuant to Rule 13d-3 of the Exchange Act
Regulations as in effect on the date of this Agreement); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own or to have
Beneficial Ownership of, any security if the agreement, arrangement, or understanding to
vote such security that would otherwise render such Person the Beneficial Owner of such
security (1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the Exchange Act and the Exchange Act Regulations, and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report);

     (ii) that such Person or any of such Person’s Affiliates or Associates has (A) the
right to acquire (whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement, or understanding, whether or not in writing
(other than customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights, warrants, or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner
of, or to Beneficially Own or to have Beneficial Ownership of (x) securities tendered
pursuant to a tender or exchange offer made in accordance with the Exchange Act Regulations
by or on behalf of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (y) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering Event, or
(z) securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event if such Rights were acquired by such Person or any of such Person’s
Affiliates or Associates prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the “Original Rights”) or pursuant to Section 11(a) hereof in
connection with an adjustment made with respect to any Original Rights; or (B) the right to
vote pursuant to any agreement, arrangement, or understanding (except to the extent
contemplated by the proviso to subparagraph (i) of this paragraph (c));

     (iii) that are Beneficially Owned, directly or indirectly, by any other Person (or any
Affiliate or Associate of such Person) with which such Person (or any of such Person’s
Affiliates or Associates) has any agreement, arrangement, or understanding, whether or not
in writing (other than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent

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contemplated by the proviso to subparagraph
(i) of this paragraph (c)), or disposing of any such securities; or

     (iv) to the extent not included within the foregoing subparts (i), (ii), or (iii) of
this Section 1(c), and notwithstanding anything in this Section 1(c) to the contrary, that
such Person would be deemed to constructively own or that otherwise would be aggregated with
shares owned by such Person pursuant to Section 382 of the Code, or any successor provision
or replacement provision and the Treasury Regulations thereunder.

          Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding that such
Person would be deemed to Beneficially Own hereunder.

     (d) “Board of Directors” shall mean the Board of Directors of the Company or any duly
authorized committee thereof.

     (e) “Book Entry” shall mean an uncertificated book entry for the Common Stock.

     (f) “Business Day” shall mean any day other than a Saturday, Sunday, or a day on which
banking institutions in New York City, New York are authorized or obligated by law or executive
order to close.

     (g) “Certificate of Incorporation” shall mean the Restated Certificate of
Incorporation of the Company, as filed with the Office of the Secretary of State of the State of
Delaware (the “Secretary of State”) on August 3, 1992, as amended by the Certificate of
Amendment filed with the Secretary of State on May 5, 1993, the Certificate of Ownership and Merger
filed with the Secretary of State on February 26, 1996, the Certificate of Amendment filed with the
Secretary of State on April 26, 2002, and the Certificate of Elimination filed with the Secretary
of State on August 3, 2009, and together with the Certificate of Designation of the Series B
Preferred Stock of the Company adopted contemporaneously with the approval of the Original Rights
Agreement and attached hereto as Exhibit C (the “Certificate of Designation”), as
the same may hereafter be amended or restated.

     (h) “Close of Business” on any given date shall mean 5:00 P.M., New York City time, on
such date; provided, however, that if such date is not a Business Day, it shall
mean 5:00 P.M., New York City time, on the next succeeding Business Day.

     (i) “Closing Price” shall mean, with respect to any security on any given day, the
last sale price, regular way, of such security or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, on the principal trading market on
which such security is then traded.

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     (j) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (k) “Common Stock” shall have the meaning set forth in the Preamble to this Agreement.

     (l) “Common Equity Interest” when used with reference to any Person other than the
Company shall mean the class or series of capital stock (or equity interest) with the greatest
voting power (in relation to any other classes or series of capital stock (or equity interest)) of
such other Person.

     (m) “Definitive Acquisition Agreement” shall mean any agreement entered into by the
Company that is conditioned on the approval by the holders of not less than a majority of the
voting power of the outstanding shares of Common Shock, at a meeting of stockholders with respect
to (A) a merger, consolidation, recapitalization, reorganization,
share exchange, business combination or similar transaction involving the Company or (B) the
acquisition in any manner, directly or indirectly, of more than 50% of the consolidated total
assets (including, without limitation, equity securities of its subsidiaries) of the Company)

     (n) “Distribution Date” shall have the meaning set forth in Section 3(a).

     (o) “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b).

     (p) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     (q) “Exchange Act Regulations” shall mean the General Rules and Regulations under the
Exchange Act.

     (r) “Exchange Ratio” shall have the meaning set forth in Section 24(a).

     (s) “Exempt Person” shall mean any Person who or which, together with all Affiliates
and Associates of such Person:

     (i) is the Beneficial Owner of securities on the Rights Dividend Declaration Date
representing 4.75% or more of the shares of Common Stock outstanding on the Rights Dividend
Declaration Date, provided, however, that any such Person described in this
clause (i) shall no longer be deemed to be an Exempt Person and shall be deemed an Acquiring
Person if such Person, together with all Affiliates and Associates of such Person (and while
such Person, together with the Affiliates and Associates of such Person, continues to be the
Beneficial Owner of 4.75% or more of the then outstanding shares of Common Stock) either (A)
becomes the Beneficial Owner of additional securities representing one-half of one percent
(0.5%) or more of the shares of Common Stock then outstanding or (B) becomes the Beneficial
Owner of additional securities and upon acquiring such Beneficial Ownership is, together
with such Person’s Affiliates and Associates, the Beneficial Owner of 20% or more of the shares

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of Common Stock then outstanding, except in each case when Beneficial Ownership of
such additional securities is a result of (w) a dividend or distribution of shares by the
Company made on a pro rata basis to all holders of Common Stock, (x) the issuance of shares
by the Company pursuant to a split or subdivision of the outstanding Common Stock, (y) the
grant of any equity compensation award (including, without limitation, an equity
compensation award in the form of options, warrants, rights, restricted stock, or similar
securities) by the Company to such Person if such person is a director, officer, employee,
or agent of the Company, or any adjustment to the number of shares of Common Stock
represented by such equity compensation award pursuant to the terms thereof, or (z) any
unilateral grant of any security by the Company to such Person; or

     (ii) is a Beneficial Owner of 4.75% or more of the shares of Common Stock outstanding
(but less than 20% of the shares of Common Stock outstanding) and whose Beneficial Ownership
the Board of Directors has determined, in its sole discretion before the time such Person
otherwise would have become an Acquiring Person, would not jeopardize or endanger the
availability to the Company of its NOLs; provided, however, that if a Person
is an Exempt Person solely by reason of
this clause (ii), then such Person shall cease to be an Exempt Person if (A) such Person,
together with the Affiliates and Associates of such Person, ceases to Beneficially Own 4.75%
or more of the shares of the then outstanding Common Stock or (B) the Board of Directors, in
its sole discretion, makes a contrary determination about the effect of such Person’s
Beneficial Ownership on the availability to the Company of its NOLs.

A purchaser, assignee, or transferee of the shares of Common Stock (or options, rights, or warrants
exercisable for Common Stock) from an Exempt Person shall not thereby become an Exempt Person,
except that a transferee from the estate of an Exempt Person who receives Common Stock as a bequest
or inheritance from an Exempt Person shall be an Exempt Person so long as such Person continues to
be the Beneficial Owner of 4.75% or more of the then outstanding shares of Common Stock. For the
avoidance of doubt, nothing in this definition of “Exempt Person” is intended to limit the
authority of the Board of Directors to redeem the Rights in accordance with Section 23 of this
Agreement, to exchange all or part of the then outstanding and exercisable Rights in accordance
with Section 24 of this Agreement, to supplement or amend this Agreement in accordance with Section
27 of this Agreement, or to interpret and administer this Agreement in accordance with Section 29
of this Agreement.

     (t) “Exempt Transaction” shall mean any transaction that the Board of Directors
determines, in its sole discretion and before the consummation of such transaction, is exempt,
which determination shall be irrevocable; provided, however, that the Board of
Directors may not exempt any transaction that results in any Person (other than the Company or a
Related Person), together with the Affiliates and Associates of such Person, beneficially owning
20% or more of the shares of Common Stock then outstanding. For the avoidance of doubt, nothing in
this definition of “Exempt Transaction” is intended to limit the authority of the Board of
Directors to redeem the Rights in accordance with Section 23 of this Agreement, to exchange all or
part of the then outstanding and exercisable Rights in accordance with Section 24 of this
Agreement, to supplement or amend this Agreement in accordance with

6

 

Section 27 of this Agreement,
or to interpret and administer this Agreement in accordance with Section 29 of this Agreement.

     (u) “Expiration Date” has the meaning set forth in Section 7(a).

     (v) “Final Expiration Date” has the meaning set forth in Section 7(a).

     (w) “NOLs” shall mean the Company’s net operating loss carryforwards and shall also
include any other tax benefits or attributes that may potentially be subject to the limitations
imposed by Section 382 or 383 of the Code and the Treasury Regulations thereunder.

     (x) “Original Rights Agreement” shall have the meaning set forth in the Preamble to
this Agreement.

     (y) “Outside Meeting Date” shall have the meaning set forth in Section 23(b).

     (z) “Person” shall mean any individual, firm, corporation, partnership (general or
limited), limited liability company, limited liability partnership, association, unincorporated
organization, trust, or other legal entity, and also (i) any syndicate or group deemed to be a
Person under Section 13(d)(5)(b) of the Exchange Act, (ii) any other legal
entity, group, or person making a “coordinated acquisition” of shares or otherwise treated as
an entity within the meaning of Section 1.382-3(a)(1) of the Treasury Regulations or otherwise, and
(iii) any successor (by merger or otherwise) of any such firm, corporation, partnership (general or
limited), limited liability company, limited liability partnership, association, unincorporated
organization, trust, or other group or entity.

     (aa) “Principal Party” shall have the meaning set forth in Section 13(b).

     (bb) “Purchase Price” shall have the meaning set forth in Section 7(b).

     (cc) “Qualified Offer” shall mean an offer determined by a majority of the independent
members of the Board of Directors of the Company to have each of the following characteristics:

     (i) A fully financed all-cash tender offer, or an exchange offer offering shares of
common stock of the offeror, or a combination thereof, in each such case for any and all
of the outstanding shares of Common Stock at the same per-share consideration;

     (ii) An offer that has commenced within the meaning of Rule 14d-2(a) of the Exchange
Act Regulations;

     (iii) An offer whose per-share offer price exceeds the greater of (A) a reasonable
premium above the highest reported market price for the Common Stock during the
immediately preceding twenty-four (24) months (determined as of the Trading Day
immediately preceding the commencement of such offer within the meaning of Rule 14d-2(a)
of the Exchange Act Regulations), and (B) represents a reasonable premium above the
average of the Closing Prices for the ten (10) Trading

7

 

Days immediately preceding the commencement of the offer within the meaning of Rule 14d-2(a) of the Exchange Act
Regulations; provided, however, that, if, at the time any offer is
commenced within the meaning of Rule 14d-2(a) of the Exchange Act Regulations, any other
offer that is a Qualified Offer has been commenced and remains open, the per share offer
price with respect to such subsequent offer must equal or exceed the per share price with
respect to such earlier Qualified Offer (in lieu of exceeding the thresholds set forth in
clauses (A) and (B) above); provided, further, that, to the extent that
an offer includes shares of common stock of the offeror or any subsidiary or Affiliate of
the offeror, such per-share offer price with respect to such common stock of the offeror
or a subsidiary or Affiliate of the offeror will be determined for purposes of the
foregoing provision to be the average of the daily Closing Prices per share for such
common stock for the thirty (30) Trading Days immediately preceding the commencement of
such offer within the meaning of Rule 14d-2(a) under the Exchange Act Regulations;

     (iv) An offer that, within twenty (20) Business Days after the commencement date of
the offer (or within ten (10) Business Days after any increase in the offer
consideration), does not result in a nationally recognized investment banking firm
retained by the Board of Directors rendering an opinion to the Board of Directors that
the consideration being offered to the stockholders of the Company is either inadequate
or unfair;

     (v) If the offer includes shares of common stock of the offeror, an offer
pursuant to which (A) the offeror shall permit representatives of the Company
(including a nationally recognized investment banking firm retained by the Board of
Directors of the Company and legal counsel and an accounting firm designated by the
Company) to have access to such offeror’s books, records, management, accountants,
financial advisors, counsel and any other appropriate outside advisers for the purposes
of permitting such representatives to conduct a due diligence review of the offeror in
order to permit the Board of Directors of the Company to evaluate the offer and make an
informed decision and, if requested by the Board of Directors of the Company, to permit
such investment banking firm (relying as appropriate on the advice of such legal counsel)
to be able to render an opinion to the Board of Directors of the Company with respect to
whether the consideration being offered to the stockholders of the Company is fair from a
financial point of view, and (B) within ten (10) Business Days after such representatives
of the Company (including a nationally-recognized investment banking firm retained by the
Board of Directors of the Company and legal counsel and an accounting firm designated by
the Company) shall have notified the Company and the offeror that it had completed such
due diligence review to its satisfaction (or, following completion of such due diligence
review, within ten (10) Business Days after any increase in the consideration being
offered), such investment banking firm does not render an opinion to the Board of
Directors of the Company that the consideration being offered to the stockholders of the
Company is either unfair or inadequate and such investment banking firm does not, after
the expiration of such ten (10) Business Day period, render an opinion to the Board of
Directors of the Company that the consideration being offered to the stockholders of the
Company has become either

8

 

unfair or inadequate based on a subsequent disclosure or
discovery of a development or developments that have had or are reasonably likely to have
an adverse effect on the value of the common stock of the offeror;

     (vi) An offer that is subject only to the minimum tender condition described below
in Section 1(cc)(ix) and other customary terms and conditions, which conditions shall not
include any financing, funding or similar conditions or any requirements with respect to
the offeror or its agents being permitted any due diligence with respect to the books,
records, management, accountants or other outside advisers of the Company;

     (vii) An offer pursuant to which the Company has received an irrevocable written
commitment of the offeror that the offer will remain open for at least one hundred twenty
(120) Business Days and, if a Special Meeting is duly requested in accordance with
Section 23(b), for, at least ten (10) Business Days after the date of the Special Meeting
or, if no Special Meeting is held within ninety (90) Business Days following receipt of
the Special Meeting Notice in accordance with Section 23(b), for at least ten
(10) Business Days following such ninety (90) Business Day Period;

     (viii) An offer pursuant to which the Company has received an irrevocable written
commitment of the offeror that, in addition to the minimum time periods specified above
in Section 1(cc)(vii), the offer, if it is otherwise to expire prior
thereto, will be extended for at least twenty (20) Business Days after any increase
in the consideration being offered or after any bona fide alternative offer is commenced
within the meaning of Rule 14d-2(a) of the Exchange Act Regulations; provided,
however, that such offer need not remain open, as a result of Section 1(cc)(vii)
and this Section 1(cc)(viii), beyond (A) the time that any other offer satisfying the
criteria for a Qualified Offer is then required to be kept open under such
Section 1(cc)(vii) and this Section 1(cc)(viii), or (B) the expiration date, as such date
may be extended by public announcement (with prompt written notice to the Rights Agent)
in compliance with Rule 14e-1 of the Exchange Act Regulations, of any other tender offer
for the Common Stock with respect to which the Board of Directors of the Company has
agreed to redeem the Rights immediately prior to acceptance for payment of Common Stock
thereunder (unless such other offer is terminated prior to its expiration without any
Common Stock having been purchased thereunder), or (C) one Business Day after the
stockholder vote with respect to approval of any Definitive Acquisition Agreement has
been officially determined and certified by the inspectors of elections;

     (ix) An offer that is conditioned on a minimum of at least two-thirds of the
outstanding shares of the Common Stock not held by the Person making such offer (and such
Person’s Affiliates and Associates) being tendered and not withdrawn as of the offer’s
expiration date, which condition shall not be waivable;

     (x) An offer pursuant to which the Company has received an irrevocable written
commitment by the offeror to consummate, as promptly as practicable upon successful
completion of the offer, a second step transaction whereby all shares of the Common Stock
not tendered into the offer will be acquired at the same consideration per share actually
paid pursuant to the offer, subject to stockholders’

9

 

statutory appraisal rights, if any;

     (xi) An offer pursuant to which the Company and its stockholders have received an
irrevocable written commitment of the offeror that no amendments will be made to the
offer to reduce the consideration being offered or to otherwise change the terms of the
offer in a way that is adverse to a tendering stockholder;

     (xii) An offer (other than an offer consisting solely of cash consideration)
pursuant to which the Company has received the written representation and certification
of the offeror and the written representations and certifications of the offeror’s Chief
Executive Officer and Chief Financial Officer, acting in such capacities, that (A) all
facts about the offeror that would be material to making an investor’s decision to accept
the offer have been fully and accurately disclosed as of the date of the commencement of
the offer within the meaning of Rule 14d-2(a) of the Exchange Act Regulations, (B) all
such new facts will be fully and accurately disclosed on a prompt basis during the entire
period during which the offer remains open, and (C) all required Exchange Act reports
will be filed by the offeror in a timely manner during such period; and

     (xiii) If the offer includes non-cash consideration (A) the non-cash portion of the
consideration offered must consist solely of common stock of a Person that is a
publicly-owned United States corporation, (B) such common stock must be freely
tradable and listed or admitted to trading on either the NYSE or the Nasdaq Global Market
or the Nasdaq Global Select Market, (C) no stockholder approval of the issuer of such
common stock is required to issue such common stock, or, if such approval is required,
such approval has already been obtained, (D) no Person (including such Person’s
Affiliates and Associates) beneficially owns 20% or more of the shares of common stock of
the issuer then outstanding at the time of commencement of the offer or at any time
during the term of the offer, (E) the issuer of such common stock has no other class of
voting stock or other voting securities, and (F) the issuer of such common stock meets
the registrant eligibility requirements for use of Form S-3 for registering securities
under the Securities Act, including the filing of all required Exchange Act reports in a
timely manner during the twelve calendar months prior to the date of commencement of such
offer.

     For the purposes of this definition of “Qualified Offer,” “fully
financed” shall mean that the offeror has sufficient funds for the offer and related
expenses which shall be evidenced by (i) firm, unqualified, legally binding, written
commitments from responsible financial institutions having the necessary financial
capacity, accepted by the offeror, to provide funds for such offer subject only to
customary terms and conditions, (ii) cash or cash equivalents then available to the
offeror, set apart and maintained solely for the purpose of funding the offer with an
irrevocable written commitment being provided by the offeror to the Board of Directors of
the Company to maintain such availability until the offer is consummated or withdrawn, or
(iii) a combination of the foregoing; which evidence has been provided to the Company
prior to, or upon, commencement of the offer within the meaning of Rule 14d-2(a) of the
Exchange Act Regulations. If an offer becomes a Qualified Offer in accordance with this
definition, but subsequently ceases to be a Qualified Offer as a result of the failure at
a later date to continue to satisfy any of the requirements of

10

 

this definition, such offer shall cease to be a Qualified Offer and the provisions of Section 23(b) shall no
longer be applicable to such offer, provided the actual redemption of the Rights pursuant
to Section 23(b) shall not have already occurred.

     (dd) “Record Date” shall have the meaning set forth in the Preamble to this Agreement.

     (ee) “Redemption Resolution” shall have the meaning set forth in Section 23(b).

     (ff) “Related Person” shall mean (i) any Subsidiary of the Company or (ii) any
employee benefit or stock ownership plan of the Company or of any Subsidiary of the Company or any
trust or fiduciary holding shares of Common Stock for or pursuant to the terms of any such plan,
acting in such capacity.

     (gg) “Right” and “Rights” shall have the meaning set forth in the Preamble to
this Agreement.

     (hh) “Rights Certificates” shall have the meaning set forth in Section 3(a).

     (ii) “Rights Dividend Declaration Date” shall have the meaning set forth in the
Preamble to this Agreement.

     (jj) “Section 11(a)(ii) Event” shall mean the event described in Section 11(a)(ii)
hereof that triggers the adjustment provided in Section 11(a)(ii).

     (kk) “Section 13 Event” shall mean any event described in clause (x), (y), or (z) of
Section 13(a) hereof.

     (ll) “Securities Act” shall mean the Securities Act of 1933, as amended.

     (mm) “Series B Preferred Stock” shall mean the Series B Junior Participating Preferred
Stock of the Company, no par value, having the voting rights, powers, designations, preferences,
and relative, participating, optional, or other special rights and qualifications, limitations, and
restrictions set forth in the Certificate of Designation.

     (nn) “Special Meeting” shall have the meaning set forth in Section 23(b).

     (oo) “Special Meeting Notice” shall have the meaning set forth in Section 23(b).

     (pp) “Special Meeting Period” shall have the meaning set forth in Section 23(b).

     (qq) “Stock Acquisition Date” shall mean the first date of public announcement
(including, without limitation, the filing of any report pursuant to Section 13(d) of the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become such.

11

 

     (rr) “Subsidiary” shall mean, with reference to any Person, any other Person of which
(1) a majority of the voting power of the voting securities or equity interests is Beneficially
Owned, directly or indirectly, by such first-mentioned Person or otherwise controlled by such
first-mentioned Person, or (2) an amount of voting securities or equity interests sufficient to
elect at least a majority of the directors or equivalent governing body of such other Person is
Beneficially Owned, directly or indirectly, by such first-mentioned Person, or otherwise controlled
by such first-mentioned Person.

     (ss) “Trading Day” shall mean, with respect to any security, a day on which the
principal national securities exchange on which the security is listed or admitted to trading is
open for the transaction of business.

     (tt) “Treasury Regulations” shall mean final, temporary, and proposed income tax
regulations promulgated under the Code, as amended.

     (uu) “Triggering Event” shall mean any Section 11(a)(ii) Event or any Section 13
Event.

     (vv) “Trust” has the meaning set forth in Section 24(d).

     (ww) “Trust Agreement” has the meaning set forth in Section 24(d).

     (xx) “Unit” has the meaning set forth in Section 7(b).

     (yy) “Voting Securities” when used in reference to any Person, shall mean the
outstanding capital stock, equity interest, or other voting securities of such Person, in each case
entitling the holder thereof (1) to cast votes, in person or by proxy, or to act by written
consent, in the election of directors or members of the governing body of such Person (if such
person is a corporation or is managed by or under the direction of a governing body performing
functions and having obligations similar to those of a corporate board of directors) or (2) to
participate in the management and control of such Person (if such Person is not a corporation and
is not managed by or under the direction of a governing body performing functions and having
obligations similar to those of a corporate board of directors).

     Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent
to act as agent for the Company and the holders of the Rights (who, in accordance with Section 4
hereof, shall prior to the Distribution Date also be holders of Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. With the
consent of the Rights Agent, the Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable. The Rights Agent shall have no duty to supervise, and in no event
shall it be liable for, the acts or omissions of any such co-Rights Agent.

     Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the Close of
Business on the tenth Business Day after the Stock Acquisition Date and (ii) the Close of Business
on the tenth Business Day (or such later date as may be determined by action of a

12

 

majority of the Board of Directors before such time as any Person becomes an Acquiring Person and of which later
date the Company will give the Rights Agent prompt written notice) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary
holding Common Stock for, or pursuant to the terms of, any such plan, acting in such capacity) is
first published or sent or given within the meaning of Rule 14d-4(a) of the Exchange Act
Regulations or any successor rule, if upon consummation thereof such Person, together with the
Affiliates and Associates of such Person, would be the Beneficial Owner of shares of Common Stock
representing 4.75% or more of the shares of Common Stock then outstanding (including any such date
that is after the Rights Dividend Declaration Date and prior to the issuance of the Rights) (the
earlier of (i) and (ii) above being the “Distribution Date”):

	 	(x)	 	the Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the balances indicated in the Book Entry account system of the
transfer agent for the Common Stock registered in the names of the holders thereof
(which Common Stock will also be deemed to represent certificates for Rights) or, in
the case of certificated shares, by the certificates for shares of Common Stock
registered in the names of the holders of shares of Common Stock as of and subsequent
to the Record Date (which certificates for shares of Common Stock shall be deemed also
to be certificates for Rights) and not by separate rights certificates; and
	 
	 	(y)	 	the Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company).

As soon as practicable after the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent,
if so requested, will send) by first-class, insured, postage prepaid mail, to each record holder of
shares of Common Stock as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights certificates, in substantially the
form of Exhibit A (the “Rights Certificates”), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. If an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(i) or Section 11(p) hereof,
at the time of distribution of the Rights Certificates, the Company may make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of
any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely
by such Rights Certificates.

     (b) As promptly as practicable following the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Series B Preferred Stock in substantially the form attached hereto as
Exhibit B and which may be appended to certificates that represent shares of Common Stock
(hereinafter referred to as the “Summary of Rights”), by first-class, postage prepaid mail,
to each record holder of Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With

13

 

respect to Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by the
balances indicated in the Book Entry account system of the transfer agent for the Common Stock, or
in the case of certificated shares, by such certificates registered in the names of the holders
thereof. Until the earlier of the Distribution Date or the Expiration Date, the transfer of any
shares of Common Stock outstanding on the Record Date (whether represented by certificate(s) or
evidenced by the balances indicated in the Book Entry account system of the transfer agent for the
Common Stock, and in either case regardless of whether a copy of the Summary of Rights is submitted
with the surrender or request for transfer), shall also constitute the transfer of the Rights
associated with such shares of Common Stock.

     (c) Rights shall, without any further action, be issued in respect of all shares of Common
Stock that become outstanding (whether originally issued or delivered from the Company’s treasury)
after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date;
provided, however, that Rights shall also be issued to the extent provided in Section 22 hereof.
Confirmation and account statements sent to holders of Common Stock for Book Entry form or, in the
case of certificated shares, certificates, representing such shares of Common Stock, issued after
the Record Date shall bear a legend substantially in the following form:

“This certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Amended and Restated Stockholders Rights Agreement between
Furniture Brands International, Inc. (the “Company”) and American Stock
Transfer and Trust Company, LLC (the “Rights Agent”) dated as of February
26, 2010 as the same may be amended from time to time (the “Rights
Agreement”), the terms of which are incorporated herein by reference and a copy
of which is on file at the principal office of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without charge after
receipt of a written request therefor. Under certain circumstances, as set forth in
the Rights Agreement, Rights that are Beneficially Owned by any Person who is, was,
or becomes an Acquiring Person or any Affiliate or Associate thereof (as such
capitalized terms are defined in the Rights Agreement), or specified transferees of
such Acquiring Person (or Affiliate or Associate thereof) may become null and void.”

With respect to Common Stock in Book Entry form for which there has been sent a confirmation or
account statement containing the foregoing legend, until the earliest of the Distribution Date, the
Redemption Date, or the Final Expiration Date, the Rights associated with the Common Stock shall be
evidenced by such Common Stock alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any such Common Stock shall also
constitute the transfer of the Rights associated with such shares of Common Stock.

14

 

After the Record Date but before the earlier of the Distribution Date and the Expiration Date, if,
in the case of certificated shares, new certificate(s) representing shares of Common Stock are
issued in connection with the transfer, split up, combination, or exchange of certificate(s)
representing shares of Common Stock or if new certificate(s) representing shares of Common Stock
are issued to replace any certificate(s) that have been mutilated, destroyed, lost, or stolen, then
such new certificate(s) shall bear the foregoing legend. With respect to all certificates
containing the foregoing legend, until the earlier of the Distribution Date or the Expiration Date,
the Rights associated with the shares of Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of the shares of Common Stock shall
also be the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with the shares of Common
Stock represented by such certificates. If the Company purchases or acquires any shares of Common
Stock after the Record Date but prior to the Distribution Date, any Rights associated with such
shares of Common Stock shall be deemed cancelled and retired so that the Company shall not be
entitled to exercise any Rights associated with the shares of Common Stock that are no longer
outstanding.

     Section 4. Form of Rights Certificate. (a) The Rights Certificates (and the forms of
election to purchase and of assignment and the certificate to be printed on the reverse thereof)
shall be substantially in the form set forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries, or endorsements printed thereon as the
Company may deem appropriate (but which do not affect the rights, duties, or responsibilities of
the Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or any rule or regulation thereunder or with any rule or
regulation of any stock exchange upon which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 7, 11, 13, 22, 23, 24, and 27 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Distribution Date and on their
face shall entitle the holders thereof to purchase such number of Units of Series B Preferred Stock
as shall be set forth therein at the price set forth therein, but the amount and type of
securities, cash, or other assets that may be acquired upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.

     (b) Any Rights Certificate issued pursuant hereto that represents Rights Beneficially Owned
by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) that becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and that receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring Person (or any such Associate or Affiliate) to holders of
equity interests in such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing written or oral
agreement, arrangement, or understanding regarding either the transferred Rights, shares of Common
Stock, or the Company, or (B) a transfer that the Board of Directors has determined in good faith
to be part of a plan, agreement, arrangement, or understanding that has as a primary purpose or
effect the

15

 

avoidance of Section 7(e) hereof shall, upon the written direction of the Board of Directors,
contain (to the extent feasible), the following legend:

“The Rights represented by this Rights Certificate are or were Beneficially Owned by a
Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such capitalized terms are defined in the Amended and Restated Stockholders
Rights Agreement, dated as of February 26, 2010 as the same may be amended from time to time
(the “Rights Agreement”), by and between Furniture Brands International, Inc. and American
Stock Transfer and Trust Company, LLC, as Rights Agent). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement.”

     Section 5. Countersignature and Registration. (a) Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, or its
Treasurer, shall have affixed thereto the Company’s corporate seal (or a facsimile thereof), and
shall be attested by the Company’s Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Rights Certificates may be manual or by facsimile. Rights
Certificates bearing the manual or facsimile signatures of the individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the countersigning of such Rights Certificates by
the Rights Agent or did not hold such offices at the date of such Rights Certificates. No Rights
Certificate shall be entitled to any benefit under this Agreement or be valid for any purpose
unless there appears on such Rights Certificate a countersignature duly executed by the Rights
Agent by manual or facsimile signature of an authorized officer, and such countersignature upon any
Rights Certificate shall be conclusive evidence, and the only evidence, that such Rights
Certificate has been duly countersigned as required hereunder.

     (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its
office designated for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such books shall show the
name and address of each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate, and the date of each Rights Certificate.

     Section 6. Transfer, Split Up, Combination, and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost, or Stolen Rights Certificates. (a) Subject to the provisions of
Sections 4(b), 7(e), and 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the Expiration Date, any Rights Certificate or
Certificates (other than Rights Certificates representing Rights that have become null and void
pursuant to Section 7(e) hereof, that have been redeemed pursuant to Section 23 hereof, or that
have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined, or
exchanged for another Rights Certificate or Certificates, entitling the registered holder to
purchase a like number of Units of Series B Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder to purchase. Any registered holder desiring

16

 

to transfer, split up, combine, or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined, or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and executed the certificate set forth in the form of
assignment on the reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or Associates thereof as the Company shall
reasonably request; whereupon the Rights Agent shall, subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination, or exchange of Rights Certificates.

     (b) If a Rights Certificate shall be mutilated, lost, stolen, or destroyed, upon request by
the registered holder of the Rights represented thereby and upon payment to the Company and the
Rights Agent of all reasonable expenses incident thereto, there shall be issued, in exchange for
and upon cancellation of the mutilated Rights Certificate, or in substitution for the lost, stolen,
or destroyed Rights Certificate, a new Rights Certificate, in substantially the form of the prior
Rights Certificate, of like tenor and representing the equivalent number of Rights, but, in the
case of loss, theft, or destruction, only upon receipt of evidence satisfactory to the Company and
the Rights Agent of such loss, theft or destruction of such Rights Certificate and, if requested by
the Company or the Rights Agent, indemnity also satisfactory to it.

     Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a) Prior
to the earlier of (i) the Close of Business on July 30, 2012 (the “Final Expiration Date”),
or (ii) the time at which the Rights are redeemed as provided in Section 23 hereof or (iii) the
time at which the Rights are exchanged as provided in Section 24 hereof (the earlier of (i), (ii),
and (iii) being the “Expiration Date”), the registered holder of any Rights Certificate
may, subject to the provisions of Sections 7(e), 9(c), and 9(f) hereof, exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price
(as hereinafter defined) for the number of Units of Series B Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be) for which such
surrendered Rights are then exercisable.

     (b) The purchase price for each one one-thousandth of a share of Series B Preferred Stock
purchasable upon exercise of a Right shall be $20.00 (as adjusted from time to time as provided in
Sections 11 and 13(a) hereof) (the “Purchase Price”). The Purchase Price shall be subject
to adjustment from time to time as provided in Sections 11 and 13(a) hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph

17

 

(c)(2) below. Each one one-thousandth of a share of Series B Preferred Stock shall be referred to
herein as a “Unit” of Series B Preferred Stock.

     (c) (1) Subject to Section 14(b) hereof, following the Distribution Date, the Company may (at
the direction of the Board of Directors) deposit with a corporation in good standing organized
under the laws of the United States or any State of the United States, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority (the “Depositary Agent”) certificates
representing the shares of Series B Preferred Stock that may be acquired upon exercise of the
Rights and may cause such Depositary Agent to enter into an agreement pursuant to which the
Depositary Agent shall issue receipts representing interests in the shares of Series B Preferred
Stock so deposited.

          (2) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price for the Units of Series B Preferred Stock (or,
following a Triggering Event, other securities, cash, or other assets, as the case may be) to be
purchased thereby as set forth below and an amount equal to any applicable tax or charge required
to be paid by the holder of such Rights Certificate in accordance with Section 9 hereof, or
evidence satisfactory to the Company of payment of such tax or charge, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i)(A) requisition from any transfer agent of
the Series B Preferred Stock certificates representing such number of shares of Series B Preferred
Stock (or fractions of shares that are integral multiples of one one-thousandth of a share of
Series B Preferred Stock) as are to be purchased and the Company will direct its transfer agent to
comply with all such requests, and/or (B) requisition from the Depositary Agent depositary receipts
representing such number of Units of Series B Preferred Stock as are to be purchased and the
Company will direct the Depositary Agent to comply with all such requests, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or such depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue Common Stock or other securities
of the Company, pay cash, and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such Common Stock, other securities, cash,
and/or other property is available for distribution by the Rights Agent, if and when necessary to
comply with this Agreement. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) may be made in cash or by certified or bank check or money
order payable to the order of the Company.

     (d) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the registered holder
of such Rights Certificate, registered in such name or names as may be designated by such holder,
subject to the provisions of Sections 6 and 14 hereof.

18

 

     (e) Notwithstanding anything in this Agreement to the contrary, from and after the time that
any Person becomes an Acquiring Person, any Rights Beneficially Owned by (i) an Acquiring Person or
an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and who receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in such Acquiring Person
(or any such Associate or Affiliate) or to any Person with whom the Acquiring Person (or such
Associate or Affiliate) has any continuing written or oral agreement, arrangement, or understanding
regarding the transferred Rights, shares of Common Stock, or the Company or (B) a transfer that the
Board of Directors has determined in good faith to be part of a plan, agreement, arrangement, or
understanding that has as a primary purpose or effect the avoidance of this Section 7(e), shall be
null and void without any further action, and any holder of such Rights thereafter shall have no
rights or preferences whatsoever with respect to such Rights, whether under any provision of this
Agreement, the Rights Certificates, or otherwise (including, without limitation, rights and
preferences pursuant to Sections 7, 11, 13, 23, and 24 hereof). The Company shall use reasonable
efforts to ensure compliance with the provisions of this Section 7(e) and Section 4(b), but neither
the Company nor the Rights Agent shall have any liability to any holder of Rights or any other
Person as a result of the Company’s failure to make any determination under this Section 7(e) or
such Section 4(b) with respect to an Acquiring Person or its Affiliates, Associates, or
transferees.

     (f) Notwithstanding anything in this Agreement or any Rights Certificate to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to
a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 by
such registered holder unless such registered holder shall have (i) completed and executed the
certificate following the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights represented by such
Rights Certificate or Affiliates or Associates thereof as the Company shall reasonably request.

     Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any Rights Certificates acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate of destruction thereof
to the Company.

19

 

     Section 9. Reservation and Availability of Capital Stock. (a) The Company shall at all
times prior to the Expiration Date cause to be reserved and kept available out of its authorized
but unissued shares of Series B Preferred Stock and/or out of any shares of Series B Preferred
Stock held in its treasury (and following the occurrence of a Triggering Event, out of the
authorized but unissued shares of such other equity securities of the Company as may be issuable
upon exercise of the Rights and/or out of any shares of such securities held in its treasury), the
number of shares of Series B Preferred Stock (and following the occurrence of a Triggering Event,
the number of shares of such other equity securities of the Company) that, as provided in this
Agreement, will be sufficient to permit the full exercise of all outstanding Rights. Upon the
occurrence of any events resulting in an increase in the aggregate number of shares of Series B
Preferred Stock (or other equity securities of the Company) issuable upon exercise of all
outstanding Rights above the number then reserved, the Company shall make appropriate increases in
the number of shares so reserved.

     (b) So long as the shares of Series B Preferred Stock (and following the occurrence of a
Triggering Event, any other equity securities of the Company) to be issued and delivered upon the
exercise of the Rights may be listed on any stock exchange, the Company shall during the period
from the Distribution Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice of issuance upon such
exercise.

     (c) The Company shall use its reasonable best efforts (i) either (A) as soon as practicable
following the first occurrence of a Section 11(a)(ii) Event and a determination by the Company in
accordance with Section 11(a)(iii) hereof, if applicable, of the consideration to be delivered by
the Company upon exercise of the Rights, or (B) if so required by law, as soon as required
following the Distribution Date (the earliest of (A) and (B) being the “Registration
Date”), to file a registration statement on an appropriate form under the Securities Act, with
respect to the securities that may be acquired upon exercise of the Rights (the “Registration
Statement”); (ii) to cause the Registration Statement to become effective as soon as
practicable after such filing; (iii) to cause the Registration Statement to remain effective (and
to include a prospectus at all times complying with the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement and (B) the Expiration Date; and (iv) to take as soon as
practicable following the Registration Date such action as may be required to ensure that any
acquisition of securities upon exercise of the Rights complies with any applicable state securities
or “Blue Sky” laws. The Company may temporarily suspend, for a period of time not to exceed 90
days after the date set forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration statement and permit it
to become effective. Upon any such suspension, the Company shall notify the Rights Agent thereof
in writing and shall issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement (with written notice thereof to the
Rights Agent) at such time as the suspension is no longer in effect, stating that the suspension on
the exercisability of the Rights is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction (x) if the
requisite qualification in such jurisdiction shall not have been obtained

20

 

and until a registration statement has been declared effective or (y) if the exercise thereof shall
not be permitted under applicable law.

     (d) The Company shall take such action as may be necessary to ensure that all shares of Series
B Preferred Stock (and, following the occurrence of a Triggering Event, any other securities that
may be delivered upon exercise of Rights) shall be, at the time of delivery of the certificates or
depositary receipts for such securities (subject to payment of the Purchase Price), duly and
validly authorized and issued, fully paid and non-assessable.

     (e) The Company shall pay when due and payable any and all documentary, stamp, or transfer
tax, or other tax or charge, that is payable in respect of the issuance and delivery of the Rights
Certificates or the issuance and delivery of any certificates or depository receipts for Series B
Preferred Stock (or other equity securities of the Company that may be delivered upon exercise of
the Rights) upon the exercise of Rights; provided,however, the Company shall not
be required to pay any such tax or charge that may be payable in connection with the issuance or
delivery of Units of Series B Preferred Stock, or any certificates or depositary receipts or
entries in the Book Entry account system of the transfer agent for such Units of Series B Preferred
Stock (or, following the occurrence of a Triggering Event, any other securities, cash or other
assets, as the case may be) to any Person other than the registered holder of the Rights
Certificates evidencing the Rights surrendered for exercise. The Company shall not be required to
issue or deliver any certificates or depositary receipts or entries in the Book Entry account
system of the transfer agent for Units of Series B Preferred Stock (or, following the occurrence of
a Triggering Event, any other securities, cash or other assets, as the case may be) to, or in a
name other than that of, the registered holder upon the exercise of any Rights until any such tax
or charge shall have been paid (any such tax or charge being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the Company’s
satisfaction that no such tax or charge is due.

     (f) The Company shall use its reasonable best efforts, on or prior to the date that is either
(A) as soon as practicable following the first occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) hereof, if applicable, of the
consideration to be delivered by the Company upon exercise of the Rights, or (B) if so required by
law, as soon as required following the Distribution Date, to obtain any and all regulatory
approvals that may be required with respect to the securities purchasable upon exercise of the
Rights. The Company may temporarily suspend, for a period of time not to exceed 90 days after the
date set forth in the first sentence of this Section 9(f), the exercise of the Rights in order to
permit the Company to obtain the necessary regulatory approvals. Upon any such suspension, the
Company shall notify the Rights Agent thereof in writing and issue a public announcement stating
that the exercise of the Rights has been temporarily suspended, as well as a public announcement
(with written notice thereof to the Rights Agent) at such time as the suspension is no longer in
effect stating that the suspension on the exercise of the Rights is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be
exercisable unless and until all required regulatory approvals have been obtained with respect to
the securities purchasable upon exercise of the Rights.

21

 

     Section 10. Series B Preferred Stock Record Date. Each Person in whose name any
certificate or entry in the Book Entry account system of the transfer agent for Units of Series B
Preferred Stock (or, following the occurrence of a Triggering Event, other securities) is issued
upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of
the Units of Series B Preferred Stock (or, following the occurrence of a Triggering Event, other
securities) represented thereby on, and such certificate or entry in the Book Entry account system
of the transfer agent shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes)
was made; provided, however, that if the date of such surrender and payment is a
date upon which the Series B Preferred Stock (or, following the occurrence of a Triggering Event,
other securities) transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such securities on, and such certificate or entry in the Book Entry
account system of the transfer agent shall be dated, the next succeeding Business Day on which the
Series B Preferred Stock (or, following the occurrence of a Triggering Event, other securities)
transfer books of the Company are open and, provided further, that if delivery of Units of
Series B Preferred Stock is delayed pursuant to Section 9(c) hereof, such Persons shall be deemed
to have become the record holders of such Units of Series B Preferred Stock only when such Units
first become deliverable. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a shareholder of the Company with respect
to securities for which the Rights shall be exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company, except as provided
herein.

     Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. The Purchase Price, the number and kind of securities covered by each Right, and the
number of Rights outstanding are subject to adjustment from time to time as provided in this
Section 11.

     (a) (i) In the event the Company shall at any time after the Rights Dividend Declaration Date
(A) declare a dividend on the Series B Preferred Stock payable in shares of Series B Preferred
Stock, (B) subdivide the outstanding Series B Preferred Stock, (C) combine the outstanding Series B
Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Series B Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares (or fractions thereof) of Series B Preferred
Stock or capital stock, as the case may be, issuable on such date upon exercise of the Rights,
shall be proportionately adjusted so that the holder of any Right exercised after such time shall
be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and
kind of shares (or fractions thereof) of Series B Preferred Stock or capital stock, as the case may
be, which, if such Right had been exercised immediately prior to such date, such holder would have
owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one

22

 

Right be less than the aggregate par value of the shares (or fractions thereof) of capital stock of
the Company issuable upon exercise of one Right. If an event occurs that would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.

          (ii) In the event any Person becomes an Acquiring Person, provision shall be made so that
each holder of a Right (except as provided below in Section 11(a)(iii) and in Sections 7(e), 13,
and 24 hereof) shall thereafter have the right to receive, upon exercise thereof, at a price equal
to the then current Purchase Price multiplied by the number of Units of Series B Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event (such product thereafter being, for all purposes of this Agreement other than Section 13
hereof, the “Purchase Price”), in accordance with the terms of this Agreement, in lieu of
the number of Units of Series B Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event, such number of shares of Common Stock as
shall equal the result obtained by dividing (x) the Purchase Price (as the same has been adjusted
pursuant to the foregoing provisions of this Section 11(a)(ii)), by (y) 50% of the then current
market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of
such first occurrence (such shares of Common Stock being the “Adjustment Shares”).

          (iii) In the event that the number of shares of Common Stock that are authorized by the
Company’s Certificate of Incorporation but are not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is insufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company
shall take all such action as may be necessary to authorize additional shares of Common Stock for
issuance upon exercise of the Rights. In the event that the Company shall, after good faith
effort, be unable to take all such actions as may be necessary to authorize such additional shares
of Common Stock, then the Company shall issue Common Stock to the extent shares thereof are
available in connection with exercise of the Rights and to the extent sufficient shares of Common
Stock are not available therefor shall substitute, for each share of Common Stock that would
otherwise be issuable upon exercise of a Right, a number of Units of Series B Preferred Shares such
that the current per share market price of one Unit of Series B Preferred Stock multiplied by such
number of Units is equal (as nearly as possible) to the current per share market price of one share
of Common Stock as of the date of issuance of such Units of Series B Preferred Stock. In the event
that the number of shares of Common Stock, together with the number of Units of Series B Preferred
Stock, that are authorized by the Company’s Certificate of Incorporation but are not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is insufficient to permit
the exercise in full of the Rights in accordance with the foregoing provisions of this subparagraph
(iii) and subparagraph (ii) of this Section 11(a), then the Company shall take all such action as
may be necessary to authorize additional shares of Series B Preferred Stock for issuance upon
exercise of the Rights. In the event that the Company shall, after good faith effort, be unable to
take all such actions as may be necessary to authorize such additional shares of Common Stock
and/or Units of Series B Preferred Stock, then the Company, by the vote of a majority of the Board
of Directors, shall: (A) determine the excess of (1) the value of the Adjustment Shares

23

 

issuable upon the exercise of each such Right (the “Current Value”) over (2) the Purchase
Price (such excess being the “Spread”), and (B) with respect to each such Right, make
adequate provision to substitute for such Adjustment Shares, upon exercise of such Rights and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock, Units of Series B Preferred Stock, and/or other equity securities of the Company,
each to the extent permitted by the Company’s Certificate of Incorporation (including, without
limitation, shares, or units of shares, of preferred stock that the Board of Directors has deemed
to have the same value as shares of Common Stock (the “Preferred Stock Equivalents”)), (4)
debt securities of the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has been determined by a
majority of the Board of Directors, after receiving advice from a nationally recognized investment
banking firm; provided,however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty days following the first
occurrence of a Section 11(a)(ii) Event (for purposes hereof, the “Section 11(a)(iii) Trigger
Date”), then the Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, Units of Series B Preferred Stock (to the extent available) and
then, if necessary, cash, which shares of Common Stock, Units of Series B Preferred Stock and/or
cash shall have an aggregate value equal to the Spread. To the extent that the Company determines
that some action need be taken pursuant to this Section 11(a)(iii), the Company shall provide,
subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights.
For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock on the
Section 11(a)(iii) Trigger Date, the value of a Unit of Series B Preferred Stock shall be the
current market price (as determined pursuant to Section 11(d) hereof) per Unit of Series B
Preferred Stock on the Section 11(a)(iii) Trigger Date, and the value of a unit or share, as
applicable, of any Preferred Stock Equivalent shall be deemed to have the same value as the Common
Stock on such date.

     (b) If the Company shall fix a record date for the issuance of rights, options, or warrants to
all holders of any Series B Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five calendar days after such record date) shares of Series B
Preferred Stock (or shares having substantially the same rights, privileges, and preferences as
shares of Series B Preferred Stock (“Equivalent Preferred Stock”)) or securities
convertible into Series B Preferred Stock or Equivalent Preferred Stock at a price per share of
Series B Preferred Stock or per share of Equivalent Preferred Stock (or having a conversion price
per share, if a security convertible into Series B Preferred Stock or Equivalent Preferred Stock)
less than the current market price (as determined pursuant to Section 11(d) hereof) per share of
Series B Preferred Stock on such record date, then the Purchase Price with respect to the Series B
Preferred Stock to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the sum of the number of shares of Series B Preferred Stock outstanding on such
record date plus the number of shares of Series B Preferred Stock that the aggregate offering price
of the total number of shares of Series B Preferred Stock and/or Equivalent Preferred Stock so to
be offered (and/or the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price, and the

24

 

denominator of which shall be the number of shares of Series B Preferred Stock outstanding on such
record date plus the number of additional shares of Series B Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such subscription price may be
paid by delivery of consideration all or part of which may be in a form other than cash, the value
of such consideration shall be as determined by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Series B Preferred Stock owned by or held for the account
of the Company or any Subsidiary shall not be deemed outstanding for the purpose of such
computation. Such adjustment shall be made successively whenever such a record date is fixed, and
in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price that would then be in effect if such record date had not been fixed.

     (c) If the Company shall fix a record date for a distribution to all holders of shares of
Series B Preferred Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation), evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in shares of Series B Preferred Stock, but
including any dividend payable in stock other than Series B Preferred Stock), or subscription
rights, options, or warrants (excluding those referred to in Section 11(b) hereof), then, in each
case, the Purchase Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share
of Series B Preferred Stock on such record date minus the fair market value (as determined in good
faith by a majority of the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding and conclusive for all purposes on the
Rights Agent and the holder of the Rights) of the cash, assets, or evidences of indebtedness so to
be distributed or of such subscription rights or warrants distributable in respect of a share of
Series B Preferred Stock and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Series B Preferred Stock on such record
date. Such adjustments shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price that would have been in effect if such record date had not been fixed.

     (d)(i) For the purpose of any computation hereunder, the “current market price” per share of
any security, including the Common Stock or any Common Equity Interest, on any date shall be deemed
to be the average of the daily closing prices per share of such security for the ten consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, if prior to the expiration of such requisite ten Trading Day
period, the issuer announces either (A) a dividend or distribution on such security payable in
shares of such security or securities convertible into such shares (other than the Rights), or (B)
any subdivision, combination, or reclassification of such shares, then, following the ex-dividend
date for such dividend or the record date for such subdivision, as the case may be, the “current
market price” for such security shall be properly adjusted to take into account such

25

 

event. The closing price for each day shall be, if the shares of such security are listed and
admitted to trading on a national securities exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal national securities
exchange on which such shares of such security are listed or admitted to trading or, if such shares
are not listed or admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc. Automated Quotation
System (“NASDAQ”) or such other system then in use, or, if on any such date such shares are
not quoted by any such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in such shares selected by a majority of the Board
of Directors. If on any such date no market maker is making a market in such shares, the fair
value of such shares on such date as determined in good faith by a majority of the Board of
Directors shall be used. If such shares are not publicly held or not so listed or traded, “current
market price” per share shall mean the fair value per share as determined in good faith by a
majority of the Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. The term “Trading Day” shall mean,
if such shares of such security are listed or admitted to trading on any national securities
exchange, a day on which the principal national securities exchange on which such shares are listed
or admitted to trading is open for the transaction of business or, if such shares are not so listed
or admitted, a Business Day.

          (ii) For the purpose of any computation hereunder, the “current market price” per share of
Series B Preferred Stock shall be determined in the same manner as set forth above for Common Stock
in clause (i) of this Section 11(d) (other than the fourth sentence thereof). If the current market
price per share of Series B Preferred Stock cannot be determined in the manner provided above or if
the Series B Preferred Stock is not publicly held or listed or traded in a manner described in
clause (i) of this Section 11(d), the “current market price” per share of Series B Preferred Stock
shall be conclusively deemed to be the “current market price” per share of the Common Stock
multiplied by 1000 (as such amount may be appropriately adjusted to reflect any stock split,
reverse stock split, stock dividend, or any similar transaction with respect to Common Stock
occurring after the date of this Agreement). If neither the Common Stock nor the Series B
Preferred Stock is publicly held or so listed or traded, “current market price” per share of Series
B Preferred Stock shall mean the fair value per share as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights. For all purposes of this
Agreement, the “current market price” of a Unit of Series B Preferred Stock shall be equal to the
“current market price” of one share of Series B Preferred Stock divided by 1000.

     (e) Anything herein to the contrary notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase or decrease of at least one percent in
the Purchase Price; provided,however, that any adjustments that by reason of this
Section 11(e) are not required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or
to the nearest ten-thousandth of a share of Common Stock or Common Equity Interest or other share
or one-millionth of a share of Series B Preferred Stock, as the case may

26

 

be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three years from the date of the
transaction that mandates such adjustment or (ii) the Expiration Date.

     (f) If, as a result of an adjustment made pursuant to Sections 11(a)(ii) or 13(a) hereof, the
holder of any Right thereafter exercised shall become entitled to receive any shares of capital
stock other than Series B Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect
to the Series B Preferred Stock contained in Sections 11(a), (b), (c), (d), (e), (g), (h), (i),
(j), (k), (1), and (m), and the provisions of Sections 7, 9, 10, 13, and 14 hereof with respect to
the Series B Preferred Stock shall apply on like terms to any such other shares.

     (g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of Units of Series B Preferred Stock (or other securities or amount of cash or combination
thereof) that may be acquired from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.

     (h) Unless the Company shall have exercised its election as provided in Section 11(i), upon
each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of Units of Series B
Preferred Stock (calculated to the nearest one ten-thousandth of a Unit) obtained by (i)
multiplying (x) the number of Units of Series B Preferred Stock covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.

     (i) The Company may elect on or after the date of any adjustment of the Purchase Price to
adjust the number of Rights, in lieu of any adjustment in the number of Units of Series B Preferred
Stock that may be acquired upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of Units of Series B
Preferred Stock for which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth of a Right) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a public announcement,
and notify the Rights Agent in writing, of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least ten days later than
the date of such public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly
as practicable, cause to

27

 

be distributed to holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the Rights Certificates
held by such holders prior to the date of adjustment, and upon surrender thereof, if required by
the Company, new Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so distributed shall be issued,
executed, and countersigned in the manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in the names of the holders of record
of Rights Certificates on the record date specified in the public announcement.

     (j) Irrespective of any adjustment or change in the Purchase Price or the number of Units of
Series B Preferred Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per Unit and the
number of Units of Series B Preferred Stock that was expressed in the initial Rights Certificates
issued hereunder.

     (k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then par value of the number of Units of Series B Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue such fully paid and
non-assessable number of Units of Series B Preferred Stock at such adjusted Purchase Price.

     (l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
(and shall notify the Rights Agent in writing of any such election) until the occurrence of such
event the issuance to the holder of any Right exercised after such record date of that number of
Units of Series B Preferred Stock and shares of other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of Units of Series B Preferred Stock
and shares of other capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder’s right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such adjustment.

     (m) Anything in this Section 11 to the contrary notwithstanding, prior to the Distribution
Date, the Company shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 11, as and to the extent that the Board of
Directors shall determine that any (i) consolidation or subdivision of the Series B Preferred
Stock, (ii) issuance wholly for cash of any shares of Series B Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of shares of Series B Preferred Stock or
securities that by their terms are convertible into or exchangeable for shares of Series B
Preferred Stock, (iv) stock dividends, or (v) issuance of rights, options, or warrants referred to
in this Section 11, hereafter made by the Company to holders of its Series B

28

 

Preferred Stock, shall not be taxable to such holders or shall reduce the taxes payable by such
holders.

     (n) The Company shall not, at any time after the Distribution Date, (i) consolidate with any
other Person (other than a direct or indirect, wholly-owned Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), (ii) merge with or into any other Person
(other than a direct or indirect, wholly-owned Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its direct or indirect,
wholly-owned Subsidiaries in one or more transactions, each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such consolidation, merger, or sale there are
any rights, warrants, or other instruments or securities outstanding or agreements in effect that
would substantially diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with, or immediately after such consolidation, merger, or
sale, the Person that constitutes, or would constitute, the “Principal Party” for purposes
of Section 13(a) hereof shall have distributed or otherwise transferred to its shareholders or
other persons holding an equity interest in such Person Rights previously owned by such Person or
any of its Affiliates and Associates; provided, however, this Section 11(n) shall
not affect the ability of any Subsidiary of the Company to consolidate with, merge with or into, or
sell or transfer assets or earning power to, any other Subsidiary of the Company.

     (o) After the Distribution Date and so long as any Rights shall then be outstanding (other
than Rights that have become null and void pursuant to Section 7(e) hereof), the Company shall not,
except as permitted by Sections 23, 24, and 27 hereof, take (or permit any Subsidiary of the
Company to take) any action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.

     (p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company
shall at any time after the Rights Dividend Distribution Date and prior to the Distribution Date
(i) declare a dividend on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide any outstanding shares of Common Stock, (iii) combine any of the outstanding shares
of Common Stock into a smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation), the
number of Rights associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to the occurrence of the event
and the denominator of which shall be the total number of shares of Common Stock outstanding

29

 

immediately following the occurrence of such event. The adjustments provided for in this Section
11(p) shall be made successively whenever such a dividend is declared or paid or such a
subdivision, combination, or reclassification is effected. If an event occurs that would require
an adjustment under Section 11(a)(ii) and this Section 11(p), the adjustments provided for in this
Section 11(p) shall be in addition and prior to any adjustment required pursuant to Section
11(a)(ii).

     Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
adjustment is made as provided in Section 11 or Section 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the facts and
computations accounting for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Series B Preferred Stock and the Common Stock, a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, each registered holder of shares of Common Stock) in accordance with Section 26
hereof. The Rights Agent shall be fully protected in relying on any such certificate and on any
adjustment or statement therein contained and shall have no duty or liability with respect to, and
shall not be deemed to have knowledge of, any adjustment or any such event unless and until it
shall have received such a certificate.

     Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.

     (a) At any time after a Person has become an Acquiring Person (provided that such Person,
together with all Affiliates or Associates of such Person, shall be the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding), in the event that, directly or indirectly,
either (x) the Company shall consolidate with, or merge with and into, any other Person (other than
a direct or indirect, wholly-owned Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), and the Company shall not be the continuing or surviving entity of such
consolidation or merger, (y) any Person (other than a direct or indirect, wholly-owned Subsidiary
of the Company in a transaction that complies with Section 11(o) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be the continuing or surviving entity of
such consolidation or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be converted into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property or (z) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) to any Person or Persons (other than the Company or any of its direct or indirect,
wholly-owned Subsidiaries in one or more transactions, each of which complies with Section 11(o)
hereof), in one or more transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) (any such event described
in (x), (y), or (z) being herein referred to as a “Section 13 Event”); then, and in each
such case, proper provision shall be made so that:

     (i) each holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current Purchase Price
multiplied by the number of Units of Series B Preferred Stock for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu

30

 

of Units of Series B Preferred Stock, such number of validly authorized and issued, fully
paid, and non-assessable shares of Common Equity Interest of the Principal Party (which
shares shall not be subject to any liens, encumbrances, rights of first refusal, transfer
restrictions, or other adverse claims) as shall be equal to the result obtained by (1)
multiplying such then current Purchase Price by the number of Units of Series B Preferred
Stock for which such Right is exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such Units of Series B Preferred
Stock for which a Right would be exercisable hereunder but for the occurrence of such
Section 11(a)(ii) Event by the Purchase Price that would be in effect hereunder but for such
first occurrence) and (2) dividing that product (which, following the first occurrence of a
Section 13 Event, shall be the “Purchase Price” for all purposes of this Agreement)
by 50% of the then current market price (determined pursuant to Section 11(d) hereof) per
share of the Common Equity Interest of such Principal Party on the date of consummation of
such Section 13 Event.;

     (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant to this
Agreement;

     (iii) the term “Company” shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13 Event;

     (iv) such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Equity Interest) in connection
with the consummation of any such transaction as may be necessary to ensure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may be possible,
to its shares of Common Equity Interest thereafter deliverable upon the exercise of the
Rights; and

     (v) the provisions of Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event, and the Rights that have not theretofore been
exercised shall thereafter become exercisable in the manner described in this Section 13.

     (b) “Principal Party” shall mean:

     (i) in the case of any transaction described in clause (x) or (y) of the first sentence
of Section 13(a), (A) the Person (including the Company as successor thereto or as the
surviving entity) that is the issuer of any securities or other equity interests into which
            shares of Common Stock are converted in such merger or consolidation, or, if there is more
than one such issuer, the issuer of Common Equity Interest that has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof) and (B) if no securities
or other equity interests are so issued, the Person (including the Company as successor
thereto or as the surviving entity) that is the other constituent

31

 

party to such merger or consolidation, or, if there is more than one such Person, the Person
that is a constituent party to such merger or consolidation, the Common Equity Interest of
which has the highest aggregate current market price (determined pursuant to Section 11(d)
hereof); and

     (ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving the largest portion of the assets or
earning power transferred pursuant to such transaction or transactions, or, if each Person
that is a party to such transaction or transactions receives the same portion of the assets
or earning power transferred pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be determined, whichever
Person that has received assets or earning power pursuant to such transaction or
transactions, the Common Equity Interest of which has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof);

provided,however, that in any such case, (1) if the Common Equity Interest of such
Person is not at such time and has not been continuously over the preceding twelve-month period
registered under Section 12 of the Exchange Act (“Registered Common Equity Interest”), and
such Person is a direct or indirect Subsidiary of another Person that has Registered Common Equity
Interest outstanding, “Principal Party” shall refer to such other Person; (2) if the Common Equity
Interest of such Person is not Registered Common Equity Interest, and such Person is a direct or
indirect Subsidiary of another Person (other than an individual), but is not a direct or indirect
Subsidiary of another Person that has Registered Common Equity Interest outstanding, “Principal
Party” shall refer to the ultimate parent entity of such first-mentioned Person; (3) if the Common
Equity Interest of such Person is not Registered Common Equity Interest, and such Person is
directly or indirectly controlled by more than one Person, and one or more of such other Persons
has Registered Common Equity Interest outstanding, “Principal Party” shall refer to whichever of
such other Persons is the issuer of the Registered Common Equity Interest having the highest
aggregate current market price (determined pursuant to Section 11(d) hereof); and (4) if the Common
Equity Interest of such Person is not Registered Common Equity Interest, and such Person is
directly or indirectly controlled by more than one Person (one or more of which is a Person other
than an individual), and none of such other Persons has Registered Common Equity Interest
outstanding, “Principal Party” shall refer to whichever ultimate parent entity is the corporation
having the greatest stockholders’ equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the greatest net assets.

     (c) The Company shall not consummate any Section 13 Event unless the Principal Party shall
have a sufficient number of authorized shares of its Common Equity Interest that have not been
issued (or reserved for issuance) or that are held in its treasury to permit the exercise in full
of the Rights in accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that the Principal Party shall use its best efforts to:

32

 

     (i) (A) prepare and file on an appropriate form, as soon as practicable following the
execution of such agreement, a registration statement under the Securities Act with respect
to the shares of Common Equity Interest that may be acquired upon exercise of the Rights,
(B) cause such registration statement to remain effective (and to include a prospectus at
all times complying with the requirements of the Securities Act) until the Expiration Date,
and (C) take such action as may be required to ensure that any acquisition of such shares of
Common Equity Interest upon the exercise of the Rights complies with any applicable state
security or “Blue Sky” laws as soon as practicable following the execution of such
agreement;

     (ii) as soon as practicable after the execution of such agreement, deliver to holders
of the Rights historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for registration on Form 10 (or
any successor form) under the Exchange Act; and

     (iii) obtain any and all regulatory approvals as may be required with respect to the shares of Common Equity Interest securities that may be acquired upon exercise of the
Rights.

     (d) In case the Principal Party that is to be a party to a transaction referred to in this
Section 13 has at the time of such transaction, or immediately following such transaction will
have, a provision in any of its authorized securities or in its certificate of incorporation or
by-laws or other instrument governing its affairs, or any other agreements or arrangements, which
provision would have the effect of (i) causing such Principal Party to issue, in connection with,
or as a consequence of, the consummation of a transaction referred to in this Section 13, shares of
Common Equity Interest of such Principal Party at less than the then current market price per share
(determined pursuant to Section 11(d) hereof) or securities exercisable for, or convertible into,
Common Equity Interest of such Principal Party at less than such then current market price (other
than to holders of Rights pursuant to this Section 13); (ii) providing for any special payment,
tax, or similar provisions in connection with the issuance of the Common Equity Interest of such
Principal Party pursuant to the provisions of Section 13; or (iii) otherwise eliminating or
substantially diminishing the benefits intended to be afforded by the Rights in connection with, or
as a consequence of, the consummation of a transaction referred to in this Section 13; then, in
such event, the Company shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party shall have been
cancelled, waived, or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.

     (e) The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at
any time after the occurrence of a Section 11(a)(ii) Event, the Rights that have not theretofore
been exercised shall thereafter become exercisable in the manner described in Section 13(a).

33

 

     Section 14. Fractional Rights; Fractional Shares; Waiver. (a) The Company shall not
be required to issue fractions of Rights or to distribute Rights Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to the Persons to which
such fractional Rights would otherwise be issuable, an amount in cash equal to such fraction of the
market value of a whole Right. For purposes of this Section 14(a), the market value of a whole
Right shall be the closing price of the Rights for the Trading Day immediately prior to the date
that such fractional Rights would have been otherwise issuable. The closing price of the Rights
for any day shall be, if the Rights are listed or admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board of Directors. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in good faith by the
Board of Directors shall be used and such determination shall be described in a statement filed
with the Rights Agent and delivered to the holders of the Rights, which shall be conclusive for all
purposes.

     (b) The Company shall not be required to issue fractions of shares of Series B Preferred
Stock (other than fractions that are integral multiples of one one-thousandth of a share of Series
B Preferred Stock) upon exercise of the Rights or to distribute certificates or make any entries in
the Book Entry account system of the transfer agent that evidence such fractional shares of Series
B Preferred Stock (other than fractions that are integral multiples of one one-thousandth of a
share of Series B Preferred Stock). Subject to Section 7(c)(1) hereof, fractions of shares of
Series B Preferred Stock in integral multiples of one one-thousandth of a share of Series B
Preferred Stock may, at the election of the Company, be evidenced by depositary receipts, pursuant
to an appropriate agreement between the Company and a Depositary Agent selected by it;
provided, however, that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges, and preferences to which they are
entitled as Beneficial Owners of the shares of Series B Preferred Stock represented by such
depositary receipts. In lieu of such fractional shares of Series B Preferred Stock that are not
integral multiples of one one-thousandth of a share, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the then current market price of a share of Series B Preferred Stock
on the day of exercise, determined in accordance with Section 11(d) hereof.

     (c) The holder of a Right, by the acceptance of the Right, expressly waives his right to
receive any fractional Rights or any fractional shares upon exercise of a Right, except as
permitted by this Section 14.

     Section 15. Rights of Action. All rights of action in respect of this Agreement,
other than rights of action vested in the Rights Agent pursuant to Section 18 hereof, are vested in
the

34

 

respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of shares of Common Stock); and any registered holder of a Rights Certificate
(or, prior to the Distribution Date, any registered holder of shares of Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, any registered holder of shares of Common Stock), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the
Company or any other Person to enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.

     Section 16. Agreement of Rights Holders. Every holder of a Right, by accepting the
same, consents and agrees with the Company and the Rights Agent and with every other holder of a
Right that:

     (a) prior to the Distribution Date, the Rights will be evidenced by the balances indicated in
the Book Entry account system of the transfer agent for the Common Stock registered in the names of
the holders of Common Stock (which Common Stock shall also be deemed to represent certificates for
Rights) or, in the case of certificated shares, the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for shares of Common Stock shall
also constitute certificates for Rights) and each Right will be transferable only in connection
with the transfer of Common Stock;

     (b) after the Distribution Date, the Rights Certificates are transferable only on the
registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates duly executed;

     (c) subject to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may
deem and treat the Person in whose name a Rights Certificate (or, prior to the Distribution Date,
the associated balance indicated in the Book Entry account system of the transfer agent for the
Common Stock, or in the case of certificated shares, by the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the associated balance indicated in
the Book Entry account system of the transfer agent for the Common Stock, or in the case of
certificated shares, by the associated Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall be affected by any notice to the
contrary; and

     (d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or any other Person as a

35

 

result of its inability to perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree, judgment, or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory, or administrative agency or commission,
or any statute, rule, regulation, or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree, judgment, or
ruling lifted or otherwise overturned as promptly as practicable.

     Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of
any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares of Series B Preferred Stock or any other securities of the Company that may at
any time be issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or, except as provided in Section 25 hereof,
to receive notice of meetings or other actions affecting shareholders, or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.

     Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to the Rights
Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses, including reasonable fees and disbursements of
counsel and other reasonable disbursements, incurred in the preparation, delivery, amendment,
administration, or execution of this Agreement and the acceptance, administration, exercise and
performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost, or expense (including, without limitation, the reasonable fees and disbursements
of counsel), incurred without negligence, bad faith, or willful misconduct on the part of the
Rights Agent, for any action taken, suffered, or omitted by the Rights Agent in connection with the
acceptance, administration, exercise, and performance of its duties under this Agreement, including
the costs and expenses of defending against any claim of liability hereunder.

     (b) The Rights Agent shall be authorized and protected and shall incur no liability for, or
in respect of any action taken, suffered, or omitted by it in connection with, its acceptance and
administration of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Rights Certificate or certificate for shares of Series B Preferred Stock or any
balance indicated in the Book Entry account system of the transfer agent or for other capital stock
or securities of the Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.

36

 

     (c) The provisions of this Section 18 and Section 20 below shall survive the termination of
this Agreement, the exercise or expiration of the Rights, and the resignation, replacement, or
removal of the Rights Agent.

     Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a) Any Person
into which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to the corporate trust or
shareholder services businesses of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties hereto; provided, however,
that such Person would be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.

     (b) In case at any time the name of the Rights Agent shall be changed and at such time any of
the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.

     Section 20. Duties of Rights Agent. The Rights Agent undertakes to perform only the
duties and obligations imposed by this Agreement, upon the following terms and conditions, by all
of which the Company and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:

     (a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company
or an employee of the Rights Agent), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to, and the Rights Agent shall incur
no liability for or in respect of, any action taken, suffered, or omitted by the Rights Agent in
good faith and in accordance with such advice or opinion.

     (b) Whenever in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without limitation, the identity
of an Acquiring Person and the determination of “current market price”) be proved or established by
the Company prior to the Rights Agent taking, suffering, or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be specified

37

 

herein) may be deemed to be conclusively proved and established by a certificate signed by any one
of the Chairman of the Board, the Chief Executive Officer, the Treasurer, any Assistant Treasurer,
the Secretary, or any Assistant Secretary of the Company and delivered to the Rights Agent, and
such certificate shall be full and complete authorization and protection to the Rights Agent, and
the Rights Agent shall incur no liability, for or in respect of any action taken, suffered, or
omitted in good faith by it under the provisions of this Agreement in reliance upon such
certificate.

     (c) The Rights Agent shall be liable hereunder to the Company or any other Person only for
its own negligence, bad faith, or willful misconduct. Anything herein to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special, punitive, indirect,
consequential, or incidental loss or damage of any kind whatsoever (including but not limited to
lost profits).

     (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.

     (e) The Rights Agent shall not have any responsibility for the validity of this Agreement or
the execution and delivery hereof (except the due execution and delivery hereof by the Rights
Agent) or for the validity or execution of any Rights Certificate (except its countersignature
thereon); nor shall it be responsible for any breach by the Company of any covenant or failure by
the Company to satisfy conditions contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any change in the exercisability of the Rights (including Rights
becoming void pursuant to Section 7(e) hereof) or any adjustment in the terms of the Rights
required under the provisions of Sections 11, 13, 23, or 24 hereof or for the manner, method, or
amount of any such change or adjustment or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt by the Rights Agent of the certificate describing any such
adjustment contemplated by Section 12); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares of Series B
Preferred Stock or any other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Series B Preferred Stock or any other securities will,
when so issued, be validly authorized and issued, fully paid and non-assessable.

     (f) The Company shall perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further acts, instruments, and assurances as may
reasonably be required by the Rights Agent for the performance by the Rights Agent of its duties
under this Agreement.

     (g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the Secretary, any Assistant Secretary, the Treasurer, or any Assistant
Treasurer of the Company, and to apply to such officers for advice or instructions in

38

 

connection with its duties, and such instructions shall be full authorization and protection to the
Rights Agent, and the Rights Agent shall not be liable for or in respect of any action taken,
suffered, or omitted by it in good faith in accordance with instructions of any such officer.

     (h) The Rights Agent and any shareholder, affiliate, director, officer, or employee of the
Rights Agent may buy, sell, or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though the
Rights Agent were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such stockholder, affiliate, director, officer, or employee from acting in any other
capacity for the Company or for any other Person.

     (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself (through its directors, officers, and employees) or by
or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for
any act, default, neglect, or misconduct of any such attorneys or agents or for any loss to the
Company or any other Person resulting from any such act, default, neglect, or misconduct, absent
gross negligence, bad faith, or willful misconduct of the Rights Agent in the selection and
continued employment thereof.

     (j) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights hereunder if the Rights Agent shall have reasonable grounds for
believing that repayment of such funds or adequate indemnification against such risk or liability
is not reasonably assured to it.

     (k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has not been completed, has not been signed, or indicates an affirmative response
to clause 1 and/or 2 thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company. If such certificate
has been completed and signed and shows a negative response to clauses 1 and 2 of such certificate,
unless previously instructed otherwise in writing by the Company (which instructions may impose on
the Rights Agent additional ministerial responsibilities, but no discretionary responsibilities),
the Rights Agent may assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) hereof and shall not be charged with any knowledge
to the contrary.

     Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Agreement upon thirty days’ prior notice in
writing mailed to the Company, and to each transfer agent of the Series B Preferred Stock and the
Common Stock, by registered or certified mail, in which case the Company shall give or cause to be
given written notice to the registered holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty days’ prior notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Series B Preferred Stock

39

 

and the Common Stock, by registered or certified mail, and to the registered holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty days after giving notice of
such removal or after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate (who shall, with
such notice, submit his Rights Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (a) a Person organized and doing business under the laws of the United
States or any state of the United States, in good standing, shall be authorized under such laws to
exercise corporate trust, stock transfer, or shareholder services powers, shall be subject to
supervision or examination by federal or state authorities, and shall have at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a Person described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Series B
Preferred Stock and the Common Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates by first-class mail. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor Rights Agent.

     Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or the Rights Certificates to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be approved by a
majority of the Board of Directors to reflect any adjustment or change made in accordance with the
provisions of this Agreement in the Purchase Price or the number or kind or class of shares or
other securities or property that may be acquired under the Rights Certificates. In addition, in
connection with the issuance or sale of shares of Common Stock following the Distribution Date and
prior to the Expiration Date, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board of Directors, issue
Rights Certificates representing the appropriate number of Rights in connection with such issuance
or sale; provided,however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.

40

 

     Section 23. Redemption. (a) The Board of Directors may, within its sole discretion,
at any time prior to the earlier of (i) such time as any Person becomes an Acquiring Person and
(ii) the Final Expiration Date, redeem all, but not less than all, of the then outstanding Rights
at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split,
reverse stock split, stock dividend, or similar transaction occurring after the date hereof (such
redemption price, as adjusted, being hereinafter referred to as the “Redemption Price”).
The redemption of the Rights by the Board of Directors pursuant to this paragraph (a) may be made
effective at such time, on such basis, and with such conditions as the Board of Directors in its
sole discretion may establish. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the current market price (determined pursuant to Section 11(d)
hereof) of the Common Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.

     (b) If the Company receives a Qualified Offer and the Board of Directors of the Company has
not redeemed the outstanding Rights or exempted such Qualified Offer from the terms of this
Agreement or called a special meeting of stockholders for the purpose of voting on whether or not
to exempt such Qualified Offer from the terms of this Agreement, in each case by the end of the
ninetieth (90th) Business Day following the commencement of such Qualified Offer within
the meaning of Rule 14d-2(a) of the Exchange Act Regulations, and if the Company receives, not
earlier than ninety (90) Business Days nor later than one hundred twenty (120) Business Days
following the commencement of such Qualified Offer within the meaning of Rule 14d-2(a) of the
Exchange Act Regulations, a written notice complying with the terms of this Section 23(b) (the
“Special Meeting Notice”), properly executed by the holders of record of outstanding shares
of Common Stock having ten percent (10%) or more of the total voting power of all shares of Common
Stock then outstanding (or their duly authorized proxy) (excluding shares of Common Stock
beneficially owned by the Person making the Qualified Offer and such Person’s Affiliates and
Associates), directing the Board of Directors of the Company to submit to a vote of stockholders at
a special meeting of the stockholders of the Company (a “Special Meeting”) a resolution
authorizing the redemption of all, but not less than all, of the then outstanding Rights at the
Redemption Price (the “Redemption Resolution”), then the Board of Directors of the Company
shall take such actions as are necessary or desirable to cause the Redemption Resolution to be
submitted to a vote of stockholders within ninety (90) Business Days following receipt by the
Company of the Special Meeting Notice (the “Special Meeting Period”), including by
including a proposal relating to adoption of the Redemption Resolution in the proxy materials of
the Company for the Special Meeting; provided, however, that in any twelve-month
period the Company shall not be required to submit more than one Redemption Resolution to a vote of
stockholders with respect to Qualified Offers from any given potential Acquiring Person (including
any Affiliates or Associates thereof); provided, further, however, that if
the Company, at any time during the Special Meeting Period and prior to a vote on the Redemption
Resolution, enters into a Definitive Acquisition Agreement, the Special Meeting Period may be
extended (and any Special Meeting called in connection therewith may be cancelled) if the
Redemption Resolution will be separately submitted to a vote at the same meeting as the Definitive
Acquisition Agreement or if the Board of Directors has irrevocably determined to redeem the Rights
or terminate this Agreement in connection with the closing of the transaction contemplated by the
Definitive Acquisition Agreement. For purposes of a Special Meeting

41

 

Notice, to the full extent permitted by applicable law, the record date for determining eligible
holders of record shall be the ninetieth (90th) Business Day following the commencement
of a Qualified Offer. Any Special Meeting Notice must be delivered to the Secretary of the Company
at the principal executive offices of the Company and must set forth as to the stockholders of
record executing the request (x) the name and address of such stockholders, as they appear on the
Company’s books and records, (y) the class and number of shares of Common Stock which are owned of
record by each of such stockholders, and (z) in the case of Common Stock that is owned beneficially
by another Person, an executed certification by the holder of record that such holder has executed
such Special Meeting Notice only after obtaining instructions to do so from such beneficial owner
and attaching evidence thereof. Subject to the requirements of applicable law, the Board of
Directors of the Company may take a position in favor of or opposed to the adoption of the
Redemption Resolution, or no position with respect to the Redemption Resolution, as it determines
to be appropriate in the exercise of its fiduciary duties. In the event that (A) no Person has
become an Acquiring Person prior to the effective date of redemption referred to below in this
sentence, (B) the Qualified Offer continues to be a Qualified Offer prior to the last day of the
Special Meeting Period (the “Outside Meeting Date”) and (C) either (1) the Special Meeting
is not held on or prior to the ninetieth (90th) Business Day following receipt of the
Special Meeting Notice or (2) at the Special Meeting at which a quorum is present, the holders of
shares of Common Stock outstanding as of the record date for the Special Meeting (excluding shares
of Common Stock beneficially owned by the Person making the Qualified Offer and such Person’s
Affiliates and Associates) having a majority of the total voting power of all such shares of Common
Stock, shall vote in favor of the Redemption Resolution, then all of the Rights shall automatically
be redeemed at the Redemption Price (unless the Board of Directors of the Company shall have first
taken such other irrevocable action as may be necessary to prevent the existence of the Rights from
interfering with the consummation of the Qualified Offer), such redemption to be effective, as the
case may be, (x) as of the close of business on the Outside Meeting Date if a Special Meeting is
not held on or prior to such date, or (y) if a Special Meeting is held on or prior to the Outside
Meeting Date, as of the date on which the results of the vote adopting the Redemption Resolution at
the Special Meeting are certified as official by the appointed inspectors of election for the
Special Meeting.

     (c) Immediately upon the action of the Board of Directors ordering the redemption of Rights
pursuant to paragraph (a) of this Section 23 or the effectiveness of such redemption pursuant to
Section 23(b), and without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights shall be to receive
the Redemption Price for each Right held. The Company shall promptly give (i) written notice to
the Rights Agent of any such redemption and (ii) public notice of any such redemption;
provided, however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights or the effectiveness of such redemption pursuant to
Section 23(b), the Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption will state

42

 

the method by which the payment of the Redemption Price will be made. Neither the Company nor any
of its Affiliates or Associates may redeem, acquire, or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, or
other than in connection with the purchase of shares of Common Stock or the conversion or
redemption of shares of Common Stock in accordance with the applicable provisions of the
Certificate of Incorporation prior to the Distribution Date.

     Section 24. Exchange. (a) The Board of Directors may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and void pursuant to the
provisions of Section 7(e) hereof) for Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as
the “Exchange Ratio”). Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Acquiring Person, together with all
Affiliates and Associates of such Acquiring Person, becomes the Beneficial Owner of shares of
Common Stock representing 50% or more of the shares of Common Stock then outstanding. From and
after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore
have not been exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in
accordance with Section 13 and may not be exchanged pursuant to this Section 24(a).

     (b) Immediately upon the action of the Board of Directors ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly give (i) written
notice to the Rights Agent of any such exchange and (ii) public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice that is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights that will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other than Rights that
have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of Rights.

          (c) If there are not sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights. If the Company, after good faith
effort, is unable to take all such action as may be necessary to authorize such additional shares
of Common Stock, the Company shall substitute Units of Series B Preferred Stock (or Equivalent
Preferred Stock) for Common Stock exchangeable for

43

 

Rights, at the initial rate of one Unit of Series B Preferred Stock (or Equivalent Preferred Stock)
for each share of Common Stock, as appropriately adjusted to reflect stock splits, stock dividends,
and other similar transactions after the date hereof.

          (d) Upon declaring an exchange pursuant to this Section 24, or as promptly as reasonably
practicable thereafter, the Board may direct the Company to enter into a Trust Agreement (the
“Trust Agreement”) in substantially the form attached hereto as Exhibit D. If the Board so
directs the Company to enter into the Trust Agreement, at the Exchange Effective Time (as defined
in the Trust Agreement), the Company shall issue to the trust created by the Trust Agreement (the
“Trust”) all of the shares of Common Stock and other securities, if any, distributable
pursuant to the Exchange (which, for the avoidance of doubt, shall not include any shares or other
securities distributed pursuant to the Initial Distribution (as defined in the Trust Agreement)),
along with any dividends or distributions made on such shares or other securities after the
Exchange Effective Time (as defined in the Trust Agreement), and all stockholders entitled to
distribution of such shares or other securities (and any dividends or distributions made thereon
after the Exchange Effective Time (as defined in the Trust Agreement)) shall be entitled to receive
a distribution of such shares or other securities (and any dividends or distributions made thereon
after the Exchange Effective Time (as defined in the Trust Agreement)) from the Trust solely upon
compliance with all relevant terms and provisions of the Trust Agreement.

     Section 25. Notice of Certain Events. (a) If the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock of any class or series to
the holders of Series B Preferred Stock or to make any other distribution to the holders of Series
B Preferred Stock (other than a regular quarterly cash dividend out of earnings or retained
earnings of the Company); (ii) to offer to the holders of Series B Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Series B Preferred Stock or
shares of stock of any class or any other securities, rights or options; (iii) to effect any
reclassification of Series B Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Series B Preferred Stock); (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof); or (v) to effect the
liquidation, dissolution or winding up of the Company; then, in each such case, the Company shall
give to each registered holder of a Rights Certificate, to the extent feasible, and to the Rights
Agent in accordance with Section 26 hereof, a written notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of participation therein by
the holders of the shares of Series B Preferred Stock if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or (ii) above at least ten
(10) days prior to the record date for determining holders of the shares of Series B Preferred
Stock for purposes of such action, and in the case of any such

44

 

other action, at least ten (10) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Series B Preferred Stock whichever
shall be the earlier; provided, however, that no such action shall be taken
pursuant to this Section 25(a) that will or would conflict with any provision of the Certificate of
Incorporation; provided further, that no such notice shall be required pursuant to
this Section 25, if any Subsidiary of the Company effects a consolidation or merger with or into,
or effects a sale or other transfer of assets or earnings power to, any other Subsidiary of the
Company.

     (b) If any of the events set forth in Section 11(a)(ii) hereof shall occur, then, in any such
case, (i) the Company shall, as soon as practicable thereafter, give to each holder of a Rights
Certificate, to the extent feasible, and to the Rights Agent in accordance with Section 26 hereof,
a written notice of the occurrence of such event, which notice shall describe such event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof, and (ii) all
references in the preceding Section 25(a) to Series B Preferred Stock shall be deemed to refer, if
appropriate, to any other securities that may be acquired upon exercise of a Right.

     (c) If any Section 13 Event shall occur, then the Company shall, as soon as practicable
thereafter, give to each registered holder of a Rights Certificate, to the extent feasible, and to
the Rights Agent in accordance with Section 26 hereof, a written notice of the occurrence of such
event, which notice shall describe such event and the consequences of such event to holders of
Rights under Section 13(a) hereof.

     Section 26. Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing (including by facsimile, telegram or cable)
and mailed or sent or delivered, if to the Company, at its address at:

Furniture Brands International, Inc.

1 N. Brentwood Boulevard

St. Louis, Missouri 63105

Attention: General Counsel

And if to the Rights Agent, at its address at:

American Stock Transfer and Trust Company, LLC

59 Maiden Lane

New York, New York 10038

Attention: Corporate Trust Department

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, the
registered holder of any shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company or the Rights Agent, as the case may be.

     Section 27. Supplements and Amendments. Except as otherwise provided in this Section
27, the Company, by action of the Board of Directors, may from time to time and in its

45

 

sole and absolute discretion, and the Rights Agent shall if the Company so directs, supplement or
amend this Agreement in any respect without the approval of any holders of Rights, including,
without limitation, in order to (a) cure any ambiguity, (b) correct or supplement any provision
contained herein that may be defective or inconsistent with any other provisions herein, (c)
shorten or lengthen any time period hereunder, or (d) otherwise change, amend, or supplement any
provisions hereunder in any manner that the Company may deem necessary or desirable;
provided, however, that (A) the adoption by the Board of Directors of any amendment
to this Agreement that extends the Final Expiration Date shall be submitted for ratification by the
Company’s stockholders within one year of the date of the adoption of such an amendment (and no
such amendment shall be effective beyond such one-year period unless ratified by the Company’s
stockholders), and (B) without approval of the Company’s stockholders, the Board of Directors may
not supplement or amend this Agreement to (1) remove or modify Section 23(b) or (2) remove or
modify any provision hereof with respect to a Qualified Offer; and provided further
that from and after such time as any Person becomes an Acquiring Person, this Agreement shall not
be supplemented or amended in any manner that would adversely affect the interests of the holders
of Rights (other than Rights that have become null and void pursuant to Section 7(e) hereof) as
such or cause this Agreement to become amendable other than in accordance with this Section 27.
Without limiting the foregoing, (i) the Company, by action of the Board of Directors, may at any
time before any Person becomes an Acquiring Person amend this Agreement to make the provisions of
this Agreement inapplicable to a particular transaction by which a Person might otherwise become an
Acquiring Person or to otherwise alter the terms and conditions of this Agreement as they may apply
with respect to any such transaction and (ii) the Company, by action of the Board of Directors,
shall amend this Agreement, as appropriate, to remove provisions intended only to protect the
Company’s NOLs if at any time (x) Section 382 or any successor thereof is repealed and the Board of
Directors determines that this Agreement is no longer necessary for the preservation of NOLs or (b)
the Board of Directors determines that no NOLs may be carried forward. Upon the delivery of a
certificate from an appropriate officer of the Company that states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment; provided that any supplement or amendment that does not amend Section 18,
Section 19, Section 20, Section 21, or this Section 27 in a manner adverse to the Rights Agent
shall become effective immediately upon execution by the Company, whether or not also executed by
the Rights Agent.

Notwithstanding anything contained in this Agreement to the contrary, the Rights Agent may, but
shall not be obligated to, enter into any supplement or amendment that affects the Rights Agent’s
own rights, duties, obligations or immunities under this Agreement.

Prior to the Distribution Date, the interests of the holders of Rights shall be deemed coincident
with the interests of the holders of Common Stock.

     Section 28. Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

46

 

     Section 29. Determinations and Actions by the Board of Directors. Except as otherwise
specifically provided herein, the Board of Directors shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically granted to the
Board of Directors or to the Company hereunder, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and power (i) to
interpret the provisions of this Agreement, and (ii) to make all determinations deemed necessary or
advisable for the administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights in accordance with Section 23, to exchange or not exchange the
rights in accordance with Section 24, to amend or not amend this Agreement in accordance with
Section 27, and to determine whether a Person should or should not be an Exempt Person or whether a
transaction should or should not be an Exempt Transaction). All such actions, calculations,
interpretations, and determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) that are done or made by the Board of Directors shall (x) be final,
conclusive, and binding on the Company, the Rights Agent, the holders of the Rights, and all other
parties, and (y) not subject the Board of Directors or any member thereof to any liability to the
holders of the Rights.

     Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered holders of shares of Common
Stock) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders
of the Rights Certificates (and, prior to the Distribution Date, registered holders of shares of
Common Stock).

     Section 31. Severability. If any term, provision, covenant, or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     Section 32. Governing Law. This Agreement, each Right, and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and
for all purposes shall be governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.

     Section 33. Counterparts. This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one and the same
instrument.

     Section 34. Descriptive Headings. The headings contained in this Agreement are for
descriptive purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.

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[Signature Page To Follow On Next Page]

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

	 	 	 	 	 	 	 	 	 	 	 
	ATTEST: 	 	 	 	FURNITURE BRANDS INTERNATIONAL, INC. 	 
	 
	By

	 	/s/ Meredith M. Graham
 

	 	 	 	By
	 	/s/ Ralph P. Scozzafava
 

	 	 
	 

	 	Name: Meredith M. Graham
	 	 	 	 	 	Name: Ralph P. Scozzafava	 	 
	 

	 	Title: Assistant Secretary
	 	 	 	 	 	Title: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	AMERICAN STOCK TRANSFER AND
	 	 	 	 	 	 	TRUST COMPANY, LLC
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	/s/ Susan
Silber
 

	 	 	 	By
	 	/s/ Herbert J. Lemmer
 

	 	 
	 

	 	Name: Susan
Silber
	 	 	 	 	 	Name: Herbert J. Lemmer	 	 
	 

	 	Title: Assistant Secretary
	 	 	 	 	 	Title: Vice President	 	 

926626

49

 

EXHIBIT A

RIGHTS CERTIFICATE

			
	Certificate No. ___
	 	___ Rights

NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE STOCKHOLDERS RIGHTS AGREEMENT REFERRED
TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT),
RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE RIGHTS
AGREEMENT) OR BY THEIR AFFILIATES OR ASSOCIATES (AS DEFINED IN THE RIGHTS AGREEMENT) OR, IN CERTAIN
CIRCUMSTANCES, BY TRANSFEREES OF SUCH ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES MAY
BECOME NULL AND VOID.

RIGHTS CERTIFICATE 

FURNITURE BRANDS INTERNATIONAL, INC.

          This certifies that                     , or registered assigns, is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder thereof, subject to
the terms and conditions of the Amended and Restated Stockholders
Rights Agreement dated as of February 26, 2010 (the
"Rights Agreement”) between Furniture Brands International, Inc., a Delaware corporation
(the “Company”), and American Stock Transfer and Trust Company, LLC, a New York limited
liability trust company, as Rights Agent (which term shall include any successor Rights Agent under
the Rights Agreement), to purchase from the Company at any time after the Distribution Date and
prior to the Expiration Date at the office of the Rights Agent, one one-thousandth of a fully paid
and non-assessable share of Series B Junior Participating Preferred Stock, no par value, of the
Company (the “Series B Preferred Stock”), at the Purchase Price initially of $20.00 per one
one-thousandth share (each such one one-thousandth of a share being a “Unit”) of Series B
Preferred Stock, upon presentation and surrender of this Rights Certificate with the Election to
Purchase and related certificate duly executed. The number of Rights evidenced by this Rights
Certificate as set forth above, the number of Units that may be purchased upon exercise thereof as
set forth above, and the Purchase Price per Unit as set forth above shall be subject to adjustment
in certain events as provided in the Rights Agreement. Terms defined in the Rights Agreement are
used herein with the same meaning unless otherwise defined herein.

50

 

          Upon the occurrence of a Section 11(a)(ii) Event or Section 13 Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person or, under certain circumstances described in the Rights
Agreement, a transferee of any such Acquiring Person, Associate or Affiliate, such Rights shall
become null and void and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event or Section 13 Event.

          In certain circumstances described in the Rights Agreement, the Rights evidenced hereby may
entitle the registered holder thereof to purchase capital stock of an entity other than the Company
or receive common stock, cash or other assets of an entity other than the Company, all as provided
in the Rights Agreement.

          This Rights Certificate is subject to all of the terms and conditions of the Rights Agreement
applicable to a Right, which terms and conditions are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Rights Certificates. Copies of the Rights Agreement are
on file at the principal office of the Company and are available from the Company upon written
request.

          This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office of the Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.

          Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company under certain circumstances at its option at a redemption price of
$0.001 per Right, payable at the Company’s option in cash or other securities or property of the
Company, subject to adjustment for certain events as provided in the Rights Agreement.

          The Company is not required to issue fractional shares of Series B Preferred Stock upon the
exercise of any Right or Rights evidenced hereby (other than fractions that are integral multiples
of one one-thousandth of a share of Series B Preferred Stock), but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.

          No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of Series B Preferred Stock or of any other securities that
may at any time be issuable upon the exercise hereof; nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or

51

 

withhold consent to any corporate
action, or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights Agreement.

          This Rights Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.

          WITNESS the signature of the proper officers of the Company and its corporate seal.

Dated as of                                         

	 	 	 	 	 	 	 	 	 	 	 
	ATTEST:	 	FURNITURE BRANDS INTERNATIONAL, INC.
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By

	 	 	 	 	 	By	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:	 	 
	 

	 	Title:
	 	 	 	 	 	Title:	 	 

Countersigned:

AMERICAN STOCK TRANSFER AND TRUST COMPANY, LLC

as Rights Agent

	 	 	 	 	 
	By

	 	 
 

	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 

52

 

[Reverse Side of Rights Certificate]

FORM OF ASSIGNMENT

(To be executed by the registered

holder if such holder desires

to transfer the Rights Certificate.)

FOR VALUE RECEIVED                                                            

hereby sells, assigns and transfers unto                                        

(Please print name and address of transferee)

 

this Rights Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint                      Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of substitution.

Dated:                                        

	 	 	 	 	 
	 	                                                             

Signature

 	 

Signature Guaranteed:

53

 

CERTIFICATE

          The undersigned hereby certifies by checking the appropriate boxes that:

          (1) this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement); and

	 	 	 	 	 	 	 
	 

	 	 	(2	)	 	after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.

	 	 	 
	Dated:                                        

	 	                                                            
	 

	 	               Signature

Signature Guaranteed:

 

NOTICE

          The signature to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.

          Signatures must be guaranteed by an approved eligible financial institution acceptable to the
Rights Agent in its sole discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Program.

          In the event the certification set forth above is not completed, the Company will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.

54

 

FORM OF ELECTION TO PURCHASE

(To be executed if the registered

holder desires to exercise

Rights represented by the Rights Certificate)

To: FURNITURE BRANDS INTERNATIONAL, INC.

          The undersigned hereby irrevocably elects to exercise                      Rights represented by
this Rights Certificate to purchase the Units of Series B Preferred Stock issuable upon the
exercise of the Rights (or such other securities of the Company or of any other person or such
other property as may be issuable upon the exercise of the Rights) and requests that certificates
for such Units of Series B Preferred Stock (or such other securities of the Company or of any other
person or such other property as may be issuable upon the exercise of the Rights) be issued in the
name of and delivered to:

 

(Please print name and address)

 

Please insert social security

or other identifying number:                                        

          If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance of such Rights shall be registered in the name of and
delivered to:

 

(Please print name and address)

 

Please insert social security

or other identifying number:                                        

Dated:                                        

	 	 	 	 	 
	 	

                                                            

Signature
 	 

Signature Guaranteed:

55

 

CERTIFICATE

          The undersigned hereby certifies by checking the appropriate boxes that:

          (1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not beneficially owned
by an Acquiring Person or an Affiliate or an Associate thereof (as defined in the Rights
Agreement); and

          (2) after due inquiry and to the best knowledge of the undersigned, the undersigned [ ] did
[ ] did not acquire the Rights evidenced by this Rights Certificate from any person who is, was
or subsequently became an Acquiring Person or an Affiliate or Associate thereof.

	 	 	 
	Dated:                                        

	 	                                                            
	 

	 	Signature

Signature Guaranteed:

 

NOTICE

          The signature in the foregoing Election to Purchase and Certificate must conform to the name
as written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.

          Signatures must be guaranteed by an approved eligible financial institution acceptable to the
Rights Agent in its sole discretion or by a participant in the Securities Transfer Agents Medallion
Program, the Stock Exchange Medallion Program or the New York Stock Exchange Medallion Program.

          In the event the certification set forth above is not completed, the Company will deem the
beneficial owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates issued in exchange for
this Rights Certificate.

56

 

EXHIBIT B

SUMMARY OF RIGHTS TO PURCHASE

SERIES B JUNIOR PARTICIPATING PREFERRED STOCK

          Effective August 3, 2009, the Board of Directors of Furniture Brands International, Inc. (the
"Company”) declared a distribution of one Right (a “Right”) for each outstanding
share of Common Stock, no par value (the “Common Stock”), to stockholders of record at the
close of business on August 13, 2009, (the “Record Date”) and for each share of Common
Stock issued (including shares distributed from Treasury) by the Company thereafter and prior to
the Distribution Date (as described below and defined in the Rights Agreement). Each Right
entitles the registered holder, subject to the terms of the Rights Agreement (as defined below), to
purchase from the Company one one-thousandth of a share (a “Unit”) of Series B Junior
Participating Preferred Stock, no par value (the “Series B Preferred Stock”), at a Purchase
Price of $20.00 per Unit, subject to adjustment (the “Purchase Price”). The description
and terms of the Rights are set forth in a Rights Agreement between the Company and American Stock
Transfer and Trust Company, LLC, as Rights Agent (the “Rights Agreement”).

          Copies of the Rights Agreement and the Certificate of Designation for the Series B Preferred
Stock (the “Certificate of Designation”) have been filed with the Securities and Exchange
Commission as exhibits to a Registration Statement on Form 8-A dated August 4, 2009 and a Current
Report on Form 8-K dated August 4, 2009 (respectively, the “Form 8-A” and “Form
8-K”). Copies of the Rights Agreement and the Certificate of Designation are available free of
charge from the Company. This summary description of the Rights and of the Series B Preferred
Stock does not purport to be complete and is qualified in its entirety by reference to all of the
provisions of the Rights Agreement and the Certificate of Designation, including the definitions
therein of certain terms, which Rights Agreement and Certificate of Designation are incorporated
herein by reference. Capitalized terms herein and defined in the Rights Agreement and not
otherwise defined herein shall have the meaning set forth in the Rights Agreement.

The Rights Agreement

          Initially, no separate Rights Certificates will be distributed and instead the Rights will
attach to all certificates representing shares of outstanding Common Stock, or, with respect to
Common Stock in book entry form, to the outstanding shares of Common Stock evidenced by the
balances indicated in the book entry account system of the transfer agent for the Common Stock.
The Rights will separate from the Common Stock and the “Distribution Date” will occur upon
the earlier of (i) ten Business Days following a public announcement that a person or group of
affiliated or associated persons has become an “Acquiring Person,” or (ii) ten Business Days (or
such later date as may be determined by the Board of Directors prior to such time as any person
becomes an Acquiring Person) following the commencement of a tender offer or exchange offer that
would result in a person or group of affiliated and associated persons beneficially owning 4.75% or
more of the shares of Common Stock then outstanding. Until the Distribution Date, (i) the Rights
will be evidenced by the balances indicated in the book entry

57

 

account system of the transfer agent
for the Common Stock registered in the names of the holders thereof or, in the case of certificated
shares, by Common Stock certificates, and will be transferred with and only with such underlying
shares of Common Stock, (ii) confirmation and account statements sent to holders of Common Stock in
book entry form or, in the case of certificated shares, certificates, representing such shares of
Common Stock, issued after the Record Date (including shares distributed from Treasury) will
contain a notation incorporating the Rights Agreement by reference, and (iii) the transfer of any
shares of outstanding Common Stock will also constitute the transfer of the Rights associated with
such shares of Common Stock.

          As used in the Rights Agreement, an “Acquiring Person” means a person or group of
affiliated or associated persons that has acquired, obtained the right to acquire, or otherwise
obtained beneficial ownership of 4.75% or more of the shares of Common Stock then outstanding. The
following, however, are not Acquiring Persons: (A) the Company, its subsidiaries, any employee
benefit plan of the Company or any of its subsidiaries, or any entity holding shares of Common
Stock pursuant to the terms of any such plan; or (B) an “Exempt Person” (as described below and
defined in the Rights Agreement). Moreover, no person or affiliated persons will be deemed to be
an Acquiring Person as a result of the following: (1) an acquisition of Common Stock by the
Company, which, by reducing the number of shares of Common Stock outstanding, increases the
percentage of the shares of Common Stock that such person, or group of affiliated or associated
persons, beneficially owns to 4.75% or more of the shares of Common Stock then outstanding, (2) the
grant of any equity compensation award to such person if such person is a director, officer,
employee, or agent of the Company, or any adjustment to the number of shares of Common Stock
represented by such equity compensation award pursuant to the terms thereof, (3) any unilateral
grant of any security by the Company to such person, or (4) an “Exempt Transaction” (as described
below and defined in the Rights Agreement). Notwithstanding the foregoing, a person, or group of
affiliated or associated persons or group of affiliated or associated persons, who would be
considered an Acquiring Person but for the exceptions in (1) through (4) in the foregoing sentence,
will nonetheless be considered an Acquiring Person if such person, or group of affiliated or
associated persons, continues to hold 4.75% or more of the shares of Common Stock outstanding and
becomes the beneficial owner of additional shares of Common Stock, subject to certain exceptions
described in the Rights Agreement. Moreover, if the Board of Directors of the Company determines
that a person, or group of affiliated persons, who would otherwise be an Acquiring Person, has
become so inadvertently (either because such person, or group of persons, was unaware that it
beneficially owned the requisite percentage of outstanding Common Stock or because it had no actual
knowledge of the consequences of such beneficial ownership under the Rights Agreement), and such
person, or group of affiliated or associated persons, promptly divests a sufficient number of
shares of Common Stock so that it would no longer be an Acquiring Person, then such person or group
of affiliated or associated persons shall not be deemed to be or to have become an Acquiring Person
for any purposes of the Rights Agreement.

          An “Exempt Person” is a person, or group of affiliated or associated persons, who (1)
beneficially owns 4.75% or more of the shares of Common Stock outstanding on the date the Board of
Directors of the Company declares the distribution of Rights to holders of the Common Stock,
provided, however, that such person or persons will no longer be an Exempt Person if

58

 

such person or
persons (a) acquires beneficial ownership of additional securities representing 0.5% or more of the
shares of Common Stock then outstanding, or (b) acquires beneficial ownership of additional
securities, and upon such acquisition, becomes, together with all affiliated or associated persons,
the beneficial owner of 15% or more of the shares of Common Stock then outstanding, subject to
certain exceptions described in the Rights Agreement; or (2) beneficially owns 4.75% or more, but
less than 15%, of the shares of Common Stock outstanding, and whose beneficial ownership of 4.75%
or more of shares of the Common Stock then outstanding the Board of Directors of the Company
determines would not endanger the availability of the Company’s NOLs, subject to certain exceptions
described in the Rights Agreement.

          An “Exempt Transaction” is a transaction that the Board of Directors of the Company
determines should not cause a person or group of affiliated or associated persons to become an
Acquiring Person, except that the Board of Directors of the Company may not
determine that any transaction that results in a person or group of affiliated or associated
persons beneficially owning 15% or more of the shares of Common Stock is an Exempt Transaction.

          The Rights are not exercisable until the Distribution Date and will expire at the Close of
Business on July 30, 2011 unless earlier redeemed or exchanged by the Company as described below.

          As soon as practicable after the Distribution Date, Rights Certificates will be mailed to
holders of record of Common Stock as of the Close of Business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will represent the Rights.

          In the event that a person or group of affiliated or associated persons becomes an Acquiring
Person, then each holder of a Right will thereafter have the right to receive, upon exercise,
shares of Common Stock (or, in certain circumstances, Units of Series B Preferred Stock, other
securities, cash, property, or a combination thereof) having a value equal to two times the
exercise price of the Right. The exercise price is the Purchase Price multiplied by the number of
Units of Series B Preferred Stock issuable upon exercise of a Right prior to the events described
in this paragraph.

          Notwithstanding any of the foregoing, following the time any person or group becomes an
Acquiring Person, all Rights that are, or under certain circumstances specified in the Rights
Agreement were, beneficially owned by any Acquiring Person or its Affiliates or Associates will be
null and void.

          In the event that, at any time after a person or group becomes an “Acquiring Person,” (i) the
Company is acquired in a merger or other business combination with another company and the Company
is not the surviving corporation, (ii) another company consolidates or merges with the Company and
all or part of the Common Stock is converted or exchanged for other securities, cash, or property,
or (iii) 50% or more of the consolidated assets or earning power of the Company and its
subsidiaries is sold or transferred to another company, then each holder of a Right (except Rights
that previously have been voided as described above) shall thereafter have the right to receive,
upon exercise, common stock or other equity interest of the

59

 

ultimate parent of such other company
having a value equal to two times the exercise price of the Right.

          The Purchase Price payable, and the number of Units of Series B Preferred Stock (or other
securities, as applicable) issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Series B Preferred Stock, (ii) if holders of the Series B
Preferred Stock are granted certain rights or warrants to subscribe for Series B Preferred Stock or
convertible securities at less than the current market price of the Series B Preferred Stock, or
(iii) upon the distribution to the holders of the Series B Preferred Stock of evidences of
indebtedness, cash or assets (excluding regular quarterly cash dividends or dividends payable in
the Series B Preferred Stock) or of subscription rights or warrants (other than those referred to
above).

          With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. The Company is not required to issue
fractional shares of Series B Preferred Stock (other than fractional shares that are integral
multiples of one one-thousandth of a share). In lieu thereof, an adjustment in cash may be made
based on the market price of the Series B Preferred Stock prior to the date of exercise.

          At any time prior to such time as any person or group or affiliated or associated persons
becomes an Acquiring Person, the Company’s Board of Directors may redeem the Rights in whole, but
not in part, at a price of $0.001 per Right (subject to adjustment in certain events) (the
"Redemption Price”). Immediately upon the action of the Company’s Board of Directors
ordering the redemption of the Rights, the Rights will terminate and the only right of the holders
of such Rights will be to receive the Redemption Price for each Right held.

          At any time after any person or group of affiliated or associated persons becomes an Acquiring
Person and before any such Acquiring Person shall become the beneficial owner of 50% or more of the
total voting power of the aggregate of all shares of Voting Securities then outstanding, the Board
of Directors, at its option, may exchange each Right (other than Rights that previously have become
void as described above) in whole or in part, at an exchange ratio of one share of Common Stock (or
under certain circumstances one Unit of Series B Preferred Stock or equivalent preferred stock) per
Right (subject to adjustment in certain events).

          In the event the Board elects to exchange Rights for shares as described above, it may also
direct the Company to enter into a Trust Agreement, and shares issuable upon the exchange would be
issued to the trust created pursuant to the Trust Agreement. Under the terms of the Trust
Agreement, a form of which is attached as an Exhibit to the Rights Agreement, holders of
exercisable Rights would become beneficiaries of the trust created pursuant thereto, and would be
entitled to receive from the trust a distribution of the shares issued on exchange of their Rights
upon certifying that they owned the Rights on the record date for the exchange and that they are
not an Acquiring Person or any affiliate or associate of an Acquiring Person or holding shares on
behalf of an Acquiring Person.

60

 

          Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Series B Preferred Stock (or other consideration).

          Any of the provisions of the Rights Agreement may be amended without the approval of the
holders of Rights in order to cure any ambiguity, defect, inconsistency or to make any other
changes that the Board may deem necessary or desirable. After any person or group of affiliated or
associated persons becomes an Acquiring Person, the provisions of the Rights Agreement may not be
amended in any manner that would adversely affect the interests of the holders of Rights excluding
the interests of any Acquiring Person.

Description of Series B Preferred Stock

          The Units of Series B Preferred Stock that may be acquired upon exercise of the Rights will
not be redeemable and will rank junior to any other shares of preferred stock that may be issued by
the Company with respect to the payment of dividends and as to distribution of assets in
liquidation.

          Each Share of Series B Preferred Stock will have a minimum preferential quarterly dividend of
the greater of $1.00 per share or 1000 times the aggregate per share amount of any cash dividend
declared on the Common Stock since the immediately preceding quarterly dividend, subject to certain
adjustments.

          In the event of liquidation, the holder of Series B Preferred Stock will be entitled to
receive a preferred liquidation payment per share equal to the greater of $1.00 (plus
accrued and unpaid dividends thereon) or 1000 times the amount paid in respect of a share of Common
Stock, subject to certain adjustments.

          Generally, each share of Series B Preferred Stock will vote together with the Common Stock and
any other class or series of capital stock entitled to vote in such a manner, and will be entitled
to 1000 votes per share, subject to certain adjustments. The holders of the Series B Preferred
Stock, voting as a separate class, shall be entitled to elect two directors if dividends on the
Series B Preferred Stock are in arrears in an amount equal to six quarterly dividends thereon.

          Because of the nature of the Series B Preferred Stock’s dividend, liquidation and voting
rights, the economic value of one Unit of Series B Preferred Stock is expected to approximate the
economic value of one share of Common Stock.

61

 

EXHIBIT C

CERTIFICATE OF DESIGNATION

OF

SERIES B PREFERRED STOCK

OF

FURNITURE BRANDS INTERNATIONAL, INC.

 

Pursuant to Section 151 of the

General Corporation Law of

the State of Delaware

 

          Furniture Brands International, Inc., a corporation duly organized and existing under the
General Corporation Law of the State of Delaware (the “Corporation”), DOES HEREBY CERTIFY:

          That, pursuant to authority conferred by the Corporation’s Certificate of Incorporation and by
the provisions of Section 151 of the General Corporation Law of the State of Delaware, the Board of
Directors of the Corporation (the “Board”), at a duly called meeting held on August 2, 2009, at
which a quorum was present and acted throughout, adopted the following resolutions, which
resolutions remain in full force and effect on the date hereof, creating a series of one million
(1,000,000) shares of Preferred Stock having a no par value, designated as Series B Junior
Participating Preferred Stock:

          RESOLVED, that pursuant to the authority vested in the Board in accordance with the provisions
of the Certificate of Incorporation of the Corporation and Section 151(g) of the General
Corporation Law of the State of Delaware, the Board does hereby create, authorize and provide for
the issuance of a series of Preferred Stock, no par value, of the Corporation, designated as
“Series B Junior Participating Preferred Stock,” having the voting powers, designation, preferences
and relative, participating, optional and other special rights, and qualifications, limitations and
restrictions thereof that are set forth as follows:

          Section 1. Designation and Amount. The shares of such class shall be designated as
“Series B Junior Participating Preferred Stock” (the “Series B Preferred Stock”) and the number of
shares constituting such class shall be one million (1,000,000). Such number of

62

 

shares may be
increased or decreased by resolution of the Board of Directors, provided, however
that no such decrease shall reduce the number of shares of the Series B Preferred Stock to a number
less than the number of shares then outstanding, plus the number reserved for issuance upon the
exercise of options, rights or warrants, or upon conversion of any outstanding securities issued by
the Corporation convertible into Series B Preferred Stock.

          Section 2. Dividends and Distributions. (A) Subject to the prior and superior rights
of the holders of any shares of any other class or series of Preferred Stock of the Corporation
ranking prior and superior to the shares of Series B Preferred Stock with respect to dividends,
each holder of a share (a “Share”) of Series B Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for that purpose, (i)
quarterly dividends payable in cash on the last day of March, June, September, and December in each
year (each such date being a “Quarterly Dividend Payment Date”), commencing on the first Quarterly
Dividend Payment Date after the first issuance of such Share of Series B Preferred Stock, in an
amount per Share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to
the provision for adjustment hereinafter set forth, 1000 times the aggregate per share amount of
all cash dividends declared on shares of the Common Stock since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of a Share of Series B Preferred Stock, and (ii) subject to the provision for
adjustment hereinafter set forth, quarterly distributions (payable in kind) on each Quarterly
Dividend Payment Date in an amount per Share equal to 1000 times the aggregate per share amount of
all non-cash dividends or other distributions (other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock, by reclassification or otherwise)
declared on shares of Common Stock since the immediately preceding Quarterly Dividend Payment Date,
or with respect to the first Quarterly Dividend Payment Date, since the first issuance of a Share
of Series B Preferred Stock. In the event that the Corporation shall at any time after the Rights
Dividend Declaration Date (as that term is defined in the Stockholders Rights Agreement dated
August 3, 2009 by and between the Corporation and American Stock Transfer and Trust Company) (i)
declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock or (iii) combine outstanding shares of Common Stock
into a smaller number of shares, then in each such case the amount to which the holder of a Share
of Series B Preferred Stock was entitled immediately prior to such event pursuant to the preceding
sentence shall be adjusted by multiplying such amount by a fraction the numerator of which shall be
the number of shares of Common Stock that are outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.

          (B) The Corporation shall declare a dividend or distribution on Shares of Series B Preferred
Stock as provided in paragraph (A) above immediately after it declares a dividend or distribution
on the shares of Common Stock (other than a dividend or distribution payable in shares of Common
Stock); provided, however, that in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Date, a dividend of $1.00 per Share on the Series B
Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

63

 

          (C) Dividends shall begin to accrue and shall be cumulative on each outstanding Share of
Series B Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of
issuance of such Share of Series B Preferred Stock, unless the date of issuance of such Share is
prior to the record date for the first Quarterly Dividend Payment Date, in which case, dividends on
such Share shall begin to accrue from the date of issuance of such Share, or unless the date of
issuance is a Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of Shares of Series B Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on Shares of Series B Preferred Stock in
an amount less than the aggregate amount of all such dividends at the time accrued and payable on
such Shares shall be allocated pro rata on a share-by-share basis among all Shares of Series B
Preferred Stock at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of Shares of Series B Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more than 30 days prior to
the date fixed for the payment thereof.

          Section 3. Voting Rights. The holders of Shares of Series B Preferred Stock shall
have the following voting rights:

          (A) Subject to the provision for adjustment hereinafter set forth, each Share of Series B
Preferred Stock shall entitle the holder thereof to 1000 votes on all matters submitted to a vote
of the holders of Common Stock of the Corporation. In the event the Corporation shall at any time
after the Rights Dividend Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or (iii)
combine the outstanding shares of Common Stock into a small number of shares, then in each such
case the number of votes per Share to which holders of Shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which shall be the number of shares of Common Stock outstanding
immediately after such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.

          (B) Except as otherwise provided herein or in any other Certificate of Designation creating a
series of preferred stock, or any similar stock, or by law, the holders of Shares of Series B
Preferred Stock, the holders of shares of Common Stock, and the holders of any other class or
series of capital stock of the Corporation entitled to vote generally, together with the Common
Stock, shall vote together as one class on all matters submitted to a vote of the holders of such
stock.

          (C) (i) If at any time dividends on any Shares of Series B Preferred Stock shall be in arrears
in an amount equal to six quarterly dividends thereon, then during the period (a “default period”)
from the occurrence of such event until such time as all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly dividend period on all Shares of
Series B Preferred Stock then outstanding shall have been declared and paid or set apart for
payment, the holders of the outstanding Shares of Series B Preferred Stock,

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together with the
holders of outstanding shares of any one or more other classes or series of stock
of the Corporation upon which like voting rights have been conferred and are exercisable (voting
together as a class), shall have the right to elect two Directors to the Board of Directors of the
Corporation at the Corporation’s next annual meeting of stockholders, and so long as such default
period continues, shall have the right to elect a successor to each of the two Directors so elected
upon the expiration of their respective terms, such right to be exercised at the subsequent annual
meeting or meetings at which the respective terms of such Directors expire. Any Director who shall
have been so elected pursuant to this paragraph may be removed only for cause. If the office of
any Director elected by the holders of Shares of Series B Preferred Stock pursuant to this
paragraph becomes vacant for any reason, the remaining Director elected pursuant to this paragraph
may choose a successor who shall hold office for the unexpired term in respect of which such
vacancy occurred, and if the offices of both such Directors elected by the holders of Shares of
Series B Preferred Stock pursuant to this paragraph become vacant for any reason, such vacancies
may be filled for the unexpired term in respect of which such vacancy occurred only by the
affirmative vote of the holders of the outstanding Shares of Series B Preferred Stock, together
with the holders of the outstanding shares of any other class or series of stock upon which like
voting rights have been conferred and are exercisable (voting together as a class).

               (ii) The voting rights vested pursuant to paragraph (C)(i) hereof in the holders of the
outstanding Shares of Series B Preferred Stock, together with the holders of outstanding shares of
any one or more other classes or series of stock of the Corporation upon which like voting rights
have been conferred and are exercisable (voting together as a class), may not be exercised at any
annual meeting unless one-third of the outstanding shares of stock of the corporation upon which
such voting rights have been conferred shall be present at such meeting in person or by proxy. The
absence of a quorum of the holders of Common shall not affect the exercise by the holders of Shares
of Series B Preferred Stock of such rights. In connection with the election of Directors pursuant
to paragraph (C)(i) hereof, each holder of Shares of Series B Preferred Stock shall be entitled to
one vote for each one one-thousandth of a Share held (the holders of shares of any other class or
series of preferred stock having like voting rights being entitled to such number of votes, if any,
for each share of such stock held as may be granted to them).

               (iii) During any default period, the holders of shares of Common Stock and Shares of Series B
Preferred Stock, and other classes or series of stock of the Corporation, if applicable, shall
continue to be entitled to elect (voting together as a class) all the Directors other than the two
Directors to be elected pursuant to paragraph (C)(i) hereof by the holders of the outstanding
shares of Series B Preferred Stock, together with the holders of outstanding shares of any one or
more other classes or series of stock of the Corporation upon which like voting rights have been
conferred and are exercisable (voting together as a class).

               (iv) Immediately upon the expiration of a default period, (x) the right of the holders of
Shares of Series B Preferred Stock to elect Directors pursuant to paragraph (C)(i) hereof shall
cease (subject to re-vesting in the event of each and every subsequent default of the character
mentioned in paragraph (C)(i) above), and (y) the term of any Directors elected by the holders of
Shares of Series B Preferred Stock pursuant to paragraph (C)(i) hereof shall terminate.

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          (D) Except as set forth herein, holders of Shares of Series B Preferred Stock shall have no
special voting rights and their consents shall not be required (except to the extent they are
entitled to vote with holders of share of Common Stock as set forth herein) for taking any
corporate action.

          Section 4. Certain Restrictions. (A) Whenever quarterly dividends or other
dividends or distributions payable on Shares of Series B Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or
not declared, on outstanding Shares of Series B Preferred Stock shall have been paid in full, the
Corporation shall not

     (i) declare or pay dividends on, or make any other distributions on, any shares
of Junior Stock;

     (ii) declare or pay dividends on or make any other distributions on any shares
of Parity Stock, except dividends paid ratably on Shares of Series B Preferred Stock
and shares of all such Parity Stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of such Shares and all such
shares are then entitled;

     (iii) redeem or purchase or otherwise acquire for consideration shares of any
Junior Stock, provided, however, that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such Junior Stock in
exchange for shares of any Junior Stock;

     (iv) redeem or purchase or otherwise acquire for consideration any Shares of
Series B Preferred Stock, or any Parity Stock except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates, and other relative rights and
preferences of the respective series and classes, shall determine in good faith,
will result in fair an equitable treatment among the respective series or classes.

          (B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.

          Section 5. Reacquired Shares. Any Shares of Series B Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock, no par value, and may be reissued as part of a
new series of Preferred Stock, subject to the conditions and restrictions on issuance set forth
herein, in the Certificate, or in any other Certificate of Designation creating series of Preferred
Stock, no par value, or any similar stock, or as otherwise restricted by law.

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          Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation no distribution shall be made
(i) to the holders of shares of Junior Stock unless the holders of Shares of Series B Preferred
Stock shall have received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $1.00 per Share plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not earned or declared, to the date of such payment, or (b) the
amount equal to 1000 times the aggregate per share amount to be distributed to holders of shares of
Common Stock, or (ii) to the holders of shares of Parity Stock, unless simultaneously therewith
distributions are made ratably on Shares of Series B Preferred Stock and all other shares of such
Parity Stock in proportion to the total amounts to which the holders of Shares of Series B
Preferred Stock are entitled under clause (i)(a) of this sentence and to which the holders of
shares of such Parity Stock are entitled, in each case upon such liquidation, dissolution or
winding up.

          (B) In the event the Corporation shall at any time after the Rights Dividend Declaration Date
(i) declare any dividend on outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide outstanding shares of Common Stock, or (iii) combine outstanding shares of Common
Stock into a smaller number of shares, then in each such case the aggregate amount to which holders
of Shares of Series B Preferred Stock were entitled immediately prior to such event pursuant to
clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.

          Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into any
consolidation, merger, combination, or other transaction in which the shares of Common Stock are
exchanged for or converted into other stock, securities, cash, and/or any other property, then in
any such case Shares of Series B Preferred Stock shall at the same time be similarly exchanged for
or converted into an amount per Share (subject to the provision for adjustment hereinafter set
forth) equal to 1000 times the aggregate amount of stock, securities, cash, and/or other property
(payable in kind), as the case may be, into which or for which each share of Common Stock is
converted or exchanged. In the event the Corporation shall at any time after the Rights Dividend
Declaration Date (i) declare any dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine outstanding
Common Stock into a smaller number of shares, then in each such case the amount set forth in the
immediately preceding sentence with respect to the exchange or conversion of Shares of Series B
Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which
shall be the number of shares of Common Stock that are outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.

          Section 8. Redemption. The Shares of Series B Preferred Stock shall not be
redeemable.

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          Section 9. Ranking. Except as provided below, the Series B Preferred Stock shall
rank junior to all other series of Preferred Stock, no par value, and to any other class of
preferred stock that hereafter may be issued by the Corporation as to the payment of dividends and
the distribution of assets, unless the terms of any such series or class shall provide otherwise.
The Series B Preferred Stock shall rank prior, as to dividends and upon liquidation, dissolution,
or winding up, to the Common Stock.

          Section 10. Amendment. Except as set forth in Section 1 hereof, the Certificate,
including, without limitation, this Certificate of Designation shall not hereafter be amended,
either directly or indirectly, or through merger or consolidation with another corporation in any
manner that would alter or change the powers, preferences or special rights of the Series B
Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at
least two thirds of the outstanding Shares of Series B Preferred Stock, voting separately as a
class.

          Section 11. Fractional Shares. The Series B Preferred Stock may be issued in
fractions of one one-thousandth of a Share or other fractions of a share, which fractions shall
entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights,
receive dividends, participate in distributions, and to have the benefit of all other rights of
holders of Series B Preferred Stock.

          Section 12. Definitions. All capitalized terms used herein have the meanings ascribed
to them in the Certificate of Incorporation of the Corporation, as amended (the “Certificate”),
unless otherwise defined herein. In addition, for purposes hereof, the following terms shall have
the meanings set forth below:

          (A) The term “Common Stock” shall mean the class of stock designated as the Common
Stock, no par value, of the Corporation at the date hereof or any other class of stock resulting
from successive changes or reclassification of such Common Stock.

          (B) The term “Junior Stock” (i) as used in Section 4, shall mean the Common Stock and
any other class or series of capital stock of the Corporation hereafter authorized or issued over
which the Series B Preferred Stock has preference or priority as to the payment of dividends and
(ii) as used in Section 6, shall mean the Common Stock and any other class or series of capital
stock of the Corporation over which the Series B Preferred Stock has preference or priority in the
distribution of assets on any liquidation, dissolution or winding up of the Corporation.

          (C) The term “Parity Stock” (i) as used in Section 4, shall mean any class or series
of stock of the Corporation hereafter authorized or issued ranking pari passu with
the Series B Preferred Stock as to the payment of dividends and (ii) as used in Section 6, shall
mean any class or series of stock of the Corporation hereinafter authorized or issued and ranking
pari passu with the Series B Preferred Stock as to the distribution of assets on
any liquidation, dissolution, or winding up of the Corporation.

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          IN WITNESS WHEREOF, Furniture Brands International, Inc. has caused this Certificate of
Designation to be signed by its authorized officer this 3rd day of August, 2009.

	 	 	 	 	 
	 	FURNITURE BRANDS INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

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EXHIBIT D

TRUST AGREEMENT

     TRUST AGREEMENT dated as of [___] [___], 20[___] (this “Trust Agreement” or this “Agreement”)
between Furniture Brands International, Inc., a Delaware corporation, as depositor (the
“Depositor”), and [                    ], as trustee (the “Trustee”).

W I T N E S S E T H :

     WHEREAS, the Depositor is a party to that certain Amended and Restated Rights Agreement between the Depositor and
American Stock Transfer and Trust Company, LLC, as Rights Agent, dated as of February 26, 2010 (the
“Rights Agreement”);

     WHEREAS, pursuant to Section 24 of the Rights Agreement, the board of directors of the
Depositor (the “Board of Directors”) may, at its option, at any time after any Person becomes an
Acquiring Person (as defined in the Rights Agreement), exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become null and void pursuant to
the provisions of Section 7(e) of the Rights Agreement) for shares of common stock of the
Depositor, no par value (the “Common Stock”) at the exchange ratio set forth in the Rights
Agreement , appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof (the “Exchange”);

     WHEREAS, on [                    ] [___], 20[___], the Board of Directors declared an exchange of all
Rights held of record as of [                    ] [___], 20[___] (the “Exchange Record Date”) (other than any
Rights that became void pursuant to Section 11(a)(ii) of the Rights Agreement); provided, however,
that the Board of Directors resolved that any “Person” (as defined in the Rights Agreement) (other
than [Acquiring Person] and any Affiliates and Associates thereof) who had purchased or received a
transfer of shares of Common Stock prior to the Exchange Record Date (and has not subsequently
sold, transferred or otherwise disposed of such shares), but who had not become the record holder
of such shares as of [                    ] [___], 20[___] due to the settlement of such purchase not having
become effective as of the Exchange Record Date was entitled to receive, upon such settlement, the
shares issuable upon the exchange for the rights associated with the shares subject to the
purchase; provided, further, that the Board of Directors further resolved that any Person who had
sold shares of Common Stock prior to the Exchange Record Date but who continued to be reflected on
the books and records of the Company as the record holder of such shares due to the settlement of
such sale not having become effective as of the Exchange Record Date was not entitled to receive
the shares issuable upon the exchange for the rights associated with the shares subject to the sale
(the Persons entitled to participate in the Exchange being hereinafter referred to as “Exchange
Participants”);

     WHEREAS, the Depositor has previously arranged for the accounts of all Exchange Participants
who hold their shares in “street name” and who have submitted (or who have had submitted on their
behalf) proper instructions to [Transfer Agent], in its capacity as transfer agent and exchange
agent, and/or the Depository Trust Company on or before [                    ] [___], 20[___], to be credited
with the Exchange Shares distributable thereto;

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     WHEREAS, the Depositor has previously arranged for [Transfer Agent] to distribute to the
Exchange Participants who are stockholders of record and who have been identified by the Depositor
as a non-Acquiring Person the Exchange Shares distributable to such Exchange Participants via
book-entry;

     WHEREAS, following the distribution of Exchange Shares on [                    ] [___], 20[___], as
described in the two immediately preceding paragraphs (the “Initial Distribution”), there remained
a number of Exchange Shares distributable to Exchange Participants pursuant to the Exchange;

     WHEREAS, to provide for an orderly and efficient completion of the Exchange, and to ensure
that only those entitled to distribution of shares of Common Stock pursuant to the Exchange receive
distribution of such shares, the Depositor desires to form a trust to hold and distribute the
remaining shares of Common Stock distributable pursuant to the Exchange in accordance with the
terms of this Agreement; and

     WHEREAS, the Trustee is willing to accept the duties and obligations imposed hereby on the
terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

ARTICLE I

ORGANIZATION

     SECTION 1.1 Creation of Trust. The Depositor and the Trustee hereby create a trust
(the “Trust”) on the terms and conditions set forth herein for the benefit of the Depositor. The
Trust shall be known as “Furniture Brands International, Inc. 2009 Rights Exchange Trust,” in which
name the Trustee may conduct the business of the Trust, make and execute contracts, and sue and be
sued. It is the intention of the parties hereto that the Trust created hereby constitute a
statutory trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. § 3801 et seq. (the
“Delaware Statutory Trust Act”) and that this Agreement constitute the governing instrument of the
Trust. The Trustee is hereby authorized and directed to execute and file a certificate of trust
with the Secretary of State of the State of Delaware in the form attached hereto as Exhibit
A.

     SECTION 1.2 Situs of Trust. The Trust will be located and administered in the State of
Delaware. The only office of the Trust will be at the Corporate Trust Office of the Trustee within
the State of Delaware.

     SECTION 1.3 Appointment of Trustee. The Depositor hereby appoints the Trustee as
trustee of the Trust, effective immediately following the Initial Distribution (the “Exchange
Effective Time”), to have all the rights, powers, and duties set forth herein. The Trustee hereby
accepts such appointment and declares that it will hold the Trust Estate (as defined herein) upon
the trusts set forth herein and for the use and benefit of the Beneficiaries (as defined herein).

     SECTION 1.4 Purposes and Powers of the Trust. The purposes of the Trust are, and the

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Trust shall have the power and authority, to engage in the following activities:

	 	(a)	 	to accept and hold the Trust Estate;
	 
	 	(b)	 	to distribute the Trust Estate to the Beneficiaries pursuant to the terms
hereof; and
	 
	 	(c)	 	to engage in those activities that are necessary, suitable, or convenient to
accomplish the foregoing or are incidental thereto or connected therewith.

     SECTION 1.5 Transfer to Trust. At the Exchange Effective Time, the Depositor shall
transfer and deposit into the Trust, for the purposes set forth herein, that number of shares of
Common Stock equal to (a) the total number of shares of Common Stock issued pursuant to the
Exchange less (b) that number of shares of Common Stock distributed in connection with the Initial
Distribution. Such deposit, together with any dividends or distributions thereon made after the
Exchange Effective Time and all other assets or rights held from time to time by the Trust, shall
constitute the “Trust Estate.” In connection with such initial deposit, at the Exchange Effective
Time, the Depositor shall deliver, or cause to be delivered, to the Trustee written confirmation of
the number of shares of Common Stock that have been issued in the name of the Trust. In connection
with each deposit made after the Exchange Effective Time, the Depositor shall deliver, or cause to
be delivered, to the Trustee a written notice describing the assets so deposited and the rights of
the Beneficiaries with respect thereto.

     SECTION 1.6 Title to Trust Property. Legal title to the Trust Estate shall be vested
at all times in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Trust Estate to be vested in a trustee or trustees,
in which case title shall be deemed to be vested in the Trustee, a co-trustee and/or a separate
trustee, as the case may be.

ARTICLE II

BENEFICIARIES

     SECTION 2.1 Beneficiaries. The Exchange Participants who have not received Exchange
Shares pursuant to the Initial Distribution shall automatically, and without any action being
required of such Persons, be the beneficial owners (each, a “Beneficiary” and collectively, the
“Beneficiaries”) of the Trust, each owning the same number of Beneficial Interest Units as shares
of Common Stock distributable to such Beneficiary pursuant to the Exchange (together with any
dividends and distributions thereon made after the Exchange Effective Time). For purposes of this
Trust Agreement, “Beneficial Interest Units” shall mean equal units of the undivided beneficial
interest (as provided in this Trust Agreement) of the Beneficiaries in the Trust Estate. The
Beneficial Interest Units shall be uncertificated. For the avoidance of doubt, [Name of Acquiring
Person] and any Affiliates or Associates thereof shall not be Beneficiaries of the Trust.

     SECTION 2.2 Transfer of Beneficial Interest Units. Beneficial Interest Units may not
be transferred in any manner whatsoever (including, without limitation, by sale, exchange, gift,
pledge or creation of a security interest) except (a) by bequest or inheritance in the case of an
individual Beneficiary, or (b) by operation of law.

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ARTICLE III

DECLARATION OF TRUST

     SECTION 3.1 Declaration of Trust. The Trustee hereby declares that it will hold the
Trust Estate and all other assets and documents delivered to it pursuant to this Trust Agreement,
in trust upon and subject to the conditions set forth herein for the use and benefit of the
Beneficiaries. The Trust is being established by the Depositor for the protection and conservation
of the Trust Estate.

ARTICLE IV

DISTRIBUTIONS OF TRUST ESTATE

     SECTION 4.1 Distributions. Each Beneficial Interest Unit shall entitle the holder
thereof to distribution of a like number of shares of Common Stock from the Trust upon the terms
and conditions provided herein, plus any dividends or distributions on the underlying shares of
Common Stock made after the Exchange Effective Time. The Trustee shall distribute shares of Common
Stock (plus any dividends or distributions on the underlying shares of Common Stock made after the
Exchange Effective Time) to a Beneficiary that has complied with Section 4.2 hereof as promptly as
practicable following the date on which such Beneficiary has provided the Trustee with the
certification required by Section 4.2 hereof. Upon receipt of the certification of a Beneficiary
required by Section 4.2 hereof, the Trustee shall (i) notify [Transfer Agent] (or any successor
transfer agent) and the Depositor of the name of such Beneficiary and the number of shares of
Common Stock requested by such certifying Beneficiary and (ii) submit a transfer instruction, in
the form attached hereto as Exhibit B, to [Transfer Agent] or such successor transfer
agent, directing the transfer of the requested number of shares of Common Stock held by the Trust
to the certifying Beneficiary. Upon the distribution of shares of Common Stock (plus any dividends
or distributions on the underlying shares of Common Stock made after the Exchange Effective Time)
to a Beneficiary, such Beneficiary’s Beneficial Interest Units shall be automatically terminated
and such Beneficiary will cease to be a Beneficiary of the Trust thereupon. If there are
insufficient shares of Common Stock or other assets held by the Trust to honor all requests for
distribution made in compliance with this Agreement and received by the Trustee, the Trustee shall
notify the Depositor of such deficiency, and the Depositor shall use its best efforts to cause to
be issued or delivered to the Trust such number of shares and such other assets as shall be
necessary to satisfy such deficiency.

     SECTION 4.2 Certification of Beneficiary Status. As a condition to its receipt of any
distribution from the Trust, each Beneficiary that is or was a registered owner of Common Stock on
the books and records of the Depositor must provide the Trustee with the certification as to
Beneficiary status in the form attached hereto as Exhibit C, and each Beneficiary that
holds or held its shares beneficially in “street name” must provide the Trustee with the
certification as to Beneficiary status in the form attached hereto as Exhibit D. The
Trustee shall be fully protected in relying upon such certification and shall have no duty or
obligation to verify the status of a Beneficiary or the accuracy of such Beneficiary’s claim to its
respective portion of the Trust Estate. Notwithstanding anything to the contrary set forth herein,
the Depositor, in its absolute discretion, may exempt any Beneficiary from the requirement to
provide any such certification

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by furnishing to the Trustee written notice specifying the identity of the Beneficiary and the
number of Beneficial Interest Units held thereby and representing that the Depositor has declared
such Beneficiary to be exempt from such requirement (and the Trustee, in making a distribution to
any such Beneficiary, shall be fully protected in relying on the Depositor’s representation that
such Beneficiary is exempt from such requirement). Upon receipt of any such notice, the Trustee
shall distribute to the relevant Beneficiary that portion of the Trust Estate represented by such
Beneficiary’s Beneficial Interest Units and, upon such distribution, such Beneficiary’s Beneficial
Interest Units shall be automatically terminated and such Beneficiary shall cease to be a
Beneficiary of the Trust.

     SECTION 4.3 Dividends.

          4.3.1 Cash Dividends. The Trustee shall receive and hold, subject to the terms of this
Agreement, any dividends or distributions declared and paid on the shares included in the Trust
Estate (which dividends or distributions shall become part of the Trust Estate) and shall
distribute such dividends or distributions to the Beneficiaries in proportion to their respective
interests therein in accordance with the terms of this Agreement, such distribution to be
equivalent to the dividends or distribution which each respective holder would have otherwise been
entitled to receive had such shares not then been included in the Trust Estate at the time of the
payment of the dividend or distribution. [Payment of any such dividends or distributions shall be
made by check or wire transfer as a one-time disbursement at the time of the distribution to such
Beneficiary of its respective portion of the Trust Estate.]

          4.3.2 Trust Account; Money Need Not Be Segregated. (a) If the Trustee shall receive
any dividends or distributions on the Trust Estate, the Trustee shall establish and maintain with
itself a non-interest bearing trust account (the “Trust Account”), into which it shall deposit , on
the same day as received, such dividends or distributions and any future dividends or distributions
received by it, for disbursement to the Beneficiaries in accordance with Section 4.3.1 above. No
monies received by the Trustee need be segregated in any manner except to the extent required by
law, and the Trustee shall not be liable for any interest thereon.

          4.3.3 Stock Dividends. The Trustee shall receive and hold, subject to the terms of
this Agreement, any securities of the Company issued in respect of the shares included in the Trust
Estate by reason of any capital reorganization, stock split, combination, stock dividend, or other
distribution, including through any exchange of rights (which securities shall become part of the
Trust Estate), and shall deliver such securities to the Beneficiaries in proportion to their
respective interests therein in accordance with the terms of this Agreement.

          4.3.4 Merger, Consolidation and Dissolution. In connection with any merger,
consolidation, or dissolution involving the Company or any shares of Common Stock of the Company or
other voting securities held in the Trust immediately prior to the effective time of such merger,
consolidation, or dissolution, such shares of Common Stock and other voting securities, if any,
shall be converted at the effective time of such merger or consolidation into shares of stock or
other equity interests of the surviving or resulting entity of such merger or consolidation on the
same terms as are provided for all other shares of Common Stock of the Company or voting securities
under the agreement of merger or consolidation, as the case may be, or shall be converted at the
effective time of such merger or dissolution into the right to

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receive the consideration payable in connection with such merger or dissolution on the same terms
as are provided for all other shares of Common Stock of the Company or voting securities under the
agreement of merger or plan of dissolution, as the case may be, and the Trustee shall hold all
shares or other equity interests of the surviving or resulting entity into which the shares of
Common Stock or other voting securities were directly converted (which shares or other equity
interests shall become part of the Trust Estate), or shall take all actions necessary to receive
and hold the consideration payable in connection with any merger or dissolution (which
consideration shall become part of the Trust Estate), in each case for the benefit of the
Beneficiaries, and shall deliver such shares or other equity interests or such consideration, as
the case may be, to the Beneficiaries in proportion to their respective interests therein in
accordance with the terms of this Agreement. If the Trustee shall receive cash as consideration in
connection with any transaction described in this Section 4.3.4, the Trustee shall establish and
maintain with itself a non-interest bearing Trust Account into which it shall deposit, on the same
day as received, the amount received by it, for disbursement to the Beneficiaries in accordance
with this Agreement.

ARTICLE V

DEPOSITOR’S AGREEMENTS

     The Depositor acknowledges and agrees as follows:

     SECTION 5.1 Compensation and Indemnification of the Trustee. The Depositor hereby
agrees to (i) compensate the Trustee in accordance with a separate fee agreement with the Trustee,
(ii) reimburse the Trustee for all reasonable expenses (including reasonable fees and expenses of
counsel and other experts) and (iii) indemnify, defend, and hold harmless the Trustee and any of
the officers, directors, employees, and agents of the Trustee (the “Indemnified Persons”) from and
against any and all losses, damages, liabilities, claims, actions, suits, costs, expenses,
disbursements (including the reasonable fees and expenses of counsel), taxes, and penalties of any
kind and nature whatsoever (collectively, “Liabilities”), to the extent that such Expenses arise
out of or are imposed upon or asserted at any time against such Indemnified Persons with respect to
the performance of this Trust Agreement, the creation, operation, or termination of the Trust or
the transactions contemplated hereby; provided, however, that the Depositor shall not be required
to indemnify any Indemnified Person for any Liabilities that are a result of the willful
misconduct of such Indemnified Person or the bad faith violation by such Indemnified Person of the
implied contractual covenant of good faith and fair dealing. To the fullest extent permitted by
law, Liabilities to be incurred by an Indemnified Person shall, from time to time, be advanced by,
or on behalf of, the Depositor prior to the final disposition of any matter upon receipt by the
Depositor of an undertaking by, or on behalf of, such Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be indemnified under this Trust
Agreement. This Section shall survive the termination of the Trust and the Trust Agreement.

ARTICLE VI

CONCERNING THE TRUSTEE

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     SECTION 6.1 Authority of Trustee; Voting

          6.1.1 General Authority. The Trustee is hereby authorized to take all actions required
of it pursuant to this Trust Agreement, including, without limitation, executing and delivering, on
behalf of the Trust, each certificate or other document attached to this Trust Agreement as an
exhibit and any other amendment or other agreement or instrument described herein, all as approved
by the Depositor, as evidenced conclusively by the Trustee’s execution thereof. In addition to the
foregoing, the Trustee is authorized, but shall not be obligated, to take such actions as the
Depositor may from time to time direct in writing.

          6.1.2 Voting.The Trustee shall hold any and all shares of Common Stock and any other
voting securities of the Depositor (the “voting securities”) included in the Trust Estate under the
terms and conditions of this Agreement. The Trustee shall, on behalf of the Trust, have full power
and authority, and is hereby fully and exclusively empowered, authorized, and obligated: (i) to
vote in person or by proxy all such voting securities at all meetings of the stockholders of the
Depositor, or (ii) to give written consents in lieu of voting such shares at a meeting of the
stockholders of the Depositor, in either case in respect of any and all matters on which such
shares are entitled to vote under the certificate of incorporation of the Company or applicable
law, including, but not limited to, the election of directors, any merger or consolidation, the
sale of all or substantially all of the Depositor’s assets, a dissolution of the Depositor and any
amendments to the Depositor’s certificate of incorporation. The Trustee shall have no authority or
obligation to exercise discretion in respect of the vote to be cast, but instead shall vote (in
person or by proxy or by written consent) such voting securities on any matter on which such shares
are so entitled to vote in the same proportion as all voting securities of the Depositor (other
than the voting securities included in the Trust Estate) are voted on such matter. The Trustee’s
power and obligation to vote such voting securities held under this Agreement and to give written
consents in respect thereof pursuant to this Agreement shall be irrevocable for the term of this
Agreement. The Trustee (i) shall have the right to waive notice of any meeting of stockholders of
the Depositor in respect of such shares and (ii) may exercise any power or perform any act
hereunder by an agent or attorney duly authorized and appointed by him. In furtherance of the
foregoing, the Trustee shall execute and deliver an irrevocable proxy in the form attached hereto
as Exhibit E, granting the proxy or proxies named therein to cause the voting securities of
the Trust to be voted in accordance with this Section 6.1.2.

     SECTION 6.2 Not Acting in Individual Capacity. Except as expressly provided herein, in
accepting the trusts hereby created, the Trustee acts solely as trustee hereunder and not in its
individual capacity; and all Persons, having any claim against the Trustee by reason of the
transactions contemplated hereunder shall have recourse solely to the Trust Estate (or a part
thereof, as the case may be) for payment or satisfaction thereof. The Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this Trust Agreement and no
implied covenants or obligations shall be read into this Trust Agreement against the Trustee.

     SECTION 6.3 Interpretation of Trust Agreement. If the Trustee is uncertain as to the
application of any provision of this Trust Agreement or any other agreement relating to the
transactions contemplated hereby, or such provision is ambiguous as to its application or is, or
appears to be, in conflict with any other applicable provision hereof, or in the event that this
Trust Agreement permits any determination by the Trustee or is silent or incomplete as to the

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course of action which the Trustee is required to take with respect to a particular set of facts,
the Trustee may seek instructions from the Depositor and shall not be liable to any Person to the
extent that it acts in good faith in accordance with the instructions of the Depositor;
provided, that if the Trustee shall not have received written instructions from the
Depositor pursuant to its request within 10 days after the date of such request (or within such
shorter period as may be requested and required under the circumstances), until instructed
otherwise by the Depositor, the Trustee may, but shall be under no duty to, take or refrain from
taking such action as it shall deem advisable in the best interests of the Depositor and/or the
Trustee.

     SECTION 6.4 Standard of Care. The Trustee accepts the trusts hereby created and agrees
to perform the same but only upon the terms of this Trust Agreement. To the fullest extent
permitted by law, including Section 3806 of the Delaware Statutory Trust Act, the Trustee shall
only have the express duties (including fiduciary duties) provided herein and to the extent the
express provisions of this Trust Agreement restrict or eliminate such duties (including fiduciary
duties) the terms of this Trust Agreement shall prevail. The Trustee shall have no liability to the
Depositor or the Beneficiaries under any circumstances except that the Trustee shall be liable (i)
for its own willful misconduct or bad faith violation of the implied contractual covenant of good
faith and fair dealing, (ii) for liabilities that may result from any representation or warranty of
the Trustee hereunder being untrue or inaccurate and (iii) for any taxes based on or measured by
any fees, commissions or compensation received by the Trustee for acting as trustee or for services
rendered in connection with the transactions contemplated hereby. In particular, but not by way of
limitation:

          (i) The Trustee shall not be personally liable for any error of judgment made in good faith;

          (ii) The Trustee shall not be required to take any action that is inconsistent with the
purposes of the Trust set forth in Section 1.4;

          (iii) No provision of this Trust Agreement shall require the Trustee to expend or risk its
personal funds, or otherwise incur any financial liability in the performance of its rights or
powers hereunder, if the Trustee shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured or provided to
it;

          (iv) Under no circumstances shall the Trustee be personally liable for any indebtedness or
obligation of the Trust;

          (v) The Trustee shall not be liable for the default or misconduct of the Depositor, [Transfer
Agent] (or any successor transfer agent or exchange agent), the Depository Trust Company, any
Beneficiary or any other Person and shall not be liable for any act or omission taken at the
direction of the Depositor;

          (vi) The Trustee shall incur no liability if, by reason of any provision of any present or
future law or regulation thereunder, or by any force majeure event, including but not limited to
natural disaster, war or other circumstances beyond its control, the Trustee shall be prevented or
forbidden from doing or performing any act or thing which the Terms of this Trust

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Agreement provide shall or may be done or performed;

          (vii) In no event whatsoever shall the Trustee be liable for any representation, warranty,
covenant, agreement, indebtedness or other obligation of the Trust;

          (ix) The Trustee shall not be liable for any action it takes or omits to take in good faith
reliance on the certification of a Beneficiary, or the written instruction of the Depositor; and

          (x) Every provision of this Trust Agreement relating to the Trustee shall be subject to the
provisions of this Section 6.4.

     SECTION 6.5 Reliance on Writings, Use of Agents, Etc. The Trustee shall not incur any
liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent,
telegram, order, certificate, report, opinion, bond, or other document or paper (including
deliveries contemplated by Section 4.2 hereof) reasonably believed by it to be genuine and
reasonably believed by it to be signed or sent by the proper party or parties. Unless other
evidence in respect thereof is specifically prescribed herein, any request, direction, order, or
demand of the Depositor or a Beneficiary mentioned herein, shall be sufficiently evidenced by
written instruments signed by the Depositor or a Beneficiary. The Trustee may accept a copy of a
resolution of the Board of Directors of the Depositor, certified by the Secretary or an Assistant
Secretary of the Depositor as duly adopted and in full force and effect, as conclusive evidence
that such resolution has been duly adopted by such Person and that the same is in full force and
effect. As to any fact or matter the manner of ascertainment of which is not specifically described
herein, the Trustee may for all purposes hereof rely on a certificate, signed by the Depositor or a
Beneficiary, as to such fact or matter, and such certificate shall constitute full protection to
the Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. In
the performance of its duties hereunder, the Trustee may execute any of the trusts or powers hereof
and perform its powers and duties hereunder directly or, at the expense of the Depositor, through
agents or attorneys and may, at the reasonable expense of the Depositor, consult with counsel,
accountants, and other skilled Persons to be selected and employed by it or them, and the Trustee
shall not be liable for anything done, suffered or omitted by it, in good faith and in accordance
with the advice or opinion of any such counsel, accountants, or other skilled Persons appointed
with due care and the Trustee shall not be liable for the negligence of any such agent, attorney,
counsel, accountant, or other skilled Person appointed by it or them, as applicable, with due care
hereunder. Notwithstanding any other provision contained herein, the Trustee shall not be required
to confirm or verify that a person purporting to be a Beneficiary is in fact a Beneficiary and
shall not be required confirm or verify that such person is entitled to the shares of Common Stock
it requests.

     SECTION 6.6 No Action Except Under Specified Documents or Instructions. The Trustee
shall not manage, control, use, operate, lease, sell, dispose of, or otherwise deal with the Trust
Estate except (i) in accordance with the terms of this Trust Agreement, (ii) in accordance with the
powers granted to, or the authority conferred upon, the Trustee pursuant to this Trust Agreement or
(iii) in accordance with written instructions from the Depositor pursuant to Section 6.1.1 or 6.3
hereof. The Trustee shall not be required to take any action under this Trust Agreement unless the
Trustee shall have been indemnified by the Depositor, in manner and form satisfactory to the
Trustee, against any liability, cost, or expense (including counsel fees and

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disbursements) which may be incurred in connection therewith; and if the Depositor shall have
directed the Trustee to take any such action or refrain from taking any action, the Depositor
agrees to furnish such indemnity as shall be required and, in addition, to pay the reasonable
compensation of the Trustee for the services performed or to be performed by it pursuant to such
direction. The Trustee shall not be required to take any action under this Trust Agreement if the
Trustee shall reasonably determine or shall have been advised by counsel that such action is
contrary to the terms of this Agreement or is otherwise contrary to law. The Trustee shall be under
no obligation to institute, conduct, or defend any litigation, at the request, order, or direction
of the Beneficiaries or any other Person, unless such Beneficial Owners have offered to the Trustee
security or indemnity satisfactory to it against the costs, expenses, and liabilities that may be
incurred by the Trustee (including, without limitation, the reasonable fees and expenses of its
counsel) therein or thereby, including such advances as the Trustee shall request.

     SECTION 6.7 Exculpatory Provisions. Any and all exculpatory provisions, immunities,
and indemnities in favor of the Trustee under this Trust Agreement shall inure to the benefit of
the Trustee in its individual capacity or as a party to any agreement referred to herein or
therein.

     SECTION 6.8 Trustee Not Liable for Trust Estate. The recitals contained herein shall
be taken as the statements of the Depositor, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this
Trust Agreement or of any related documents. The Trustee shall at no time have any responsibility
or liability for or with respect to the genuineness, sufficiency, or validity of the Trust Estate.

     SECTION 6.9 Trustee May Own Beneficial Unit Interests or Common Stock .The Trustee in
its individual or any other capacity may become the owner or pledgee of Beneficial Unit Interests
or Common Stock of the Depositor and may deal with the Beneficiaries and the Depositor in banking
transactions with the same rights as it would have if it were not the Trustee.

     SECTION 6.10 Certain Rights of the Trustee. Notwithstanding anything contained herein
to the contrary, the Trustee shall not be responsible for ascertaining whether any transfer
complies with the registration provisions or exemptions from the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, applicable state securities law, the
Employee Retirement Income Security Act, the Investment Company Act of 1940, any other applicable
law, or the provisions of this Agreement. The Trustee shall have no duty or obligation to prepare
or file any tax returns or other filings on behalf of the Trust, all of which shall be prepared or
filed or be caused to be prepared or filed by the Depositor on behalf of the Trust. Except as
expressly provided herein, the Trustee shall have no duty to (i) see to any recording or filing of
any document, (ii) see to the payment or discharge of any tax, assessment or other governmental
charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against any
part of the Trust, (iii) to confirm or verify any financial statements or to inspect the
Depositor’s books and records at any time.

ARTICLE VII

RESIGNATION AND REMOVAL OF TRUSTEE;

APPOINTMENT OF SUCCESSORS; CO-TRUSTEE

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     SECTION 7.1 Resignation; Successor Trustee. The Trustee or any successor thereto may,
with respect to the Trust, resign at any time without cause by giving at least 30 days’ prior
written notice to the Depositor, such resignation to be effective upon the acceptance of
appointment of a successor trustee as hereinafter provided. In addition, the Depositor may at any
time with respect to the Trust Estate remove the Trustee without cause by an instrument in writing,
delivered to the Trustee, such removal to be effective upon the acceptance of appointment by the
successor trustee as hereinafter provided. In the case of the resignation or removal of the
Trustee, the Depositor shall appoint, subject to Section 7.3 hereof, a successor Trustee or
Trustees by an instrument signed by the Depositor. If the Depositor shall not have appointed a
successor Trustee or Trustees within 30 days after such resignation or removal, the Trustee shall
continue as Trustee and may apply to any court of competent jurisdiction to appoint a successor
Trustee to act until such time, if any, as a successor or successors shall have been appointed by
the Depositor as above provided; any successor Trustee so appointed by such court shall immediately
and without further act be superseded by any successor Trustee thereafter appointed by the
Depositor.

     A successor Trustee hereunder shall be deemed a Trustee for all purposes hereof, and each
reference herein to the Trustee shall thereafter be deemed to include such successor.

     SECTION 7.2 Acceptance of Appointment. Any successor Trustee, whether appointed by a
court, the Depositor, or the Trustee, shall execute and deliver to its predecessor Trustee an
instrument reasonably satisfactory to such predecessor Trustee accepting such appointment, and
thereupon such successor Trustee, without further act, shall with respect to the Trust become
vested with all the estates, properties, rights, powers, duties, and trusts of the predecessor
Trustee in the trusts hereunder with like effect as if originally named as an Trustee herein; but
nevertheless upon the written request of such successor Trustee such predecessor Trustee shall
execute and deliver an instrument reasonably satisfactory to such successor Trustee transferring to
such successor Trustee, upon the trusts herein expressed, all the estates, properties, rights,
powers, and trusts of such predecessor Trustee, and such predecessor Trustee shall duly assign,
transfer, deliver, and pay over to such successor Trustee any property or monies then held by such
predecessor Trustee upon the trusts herein expressed. Any successor Trustee shall execute and file
an amendment to the certificate of trust of the Trust with the Delaware Secretary of State changing
the name and business address in the State of Delaware of the Trustee.

     SECTION 7.3 Qualification of Successor Trustee. Any successor to the Trustee, however
appointed, shall be a bank or trust company organized under the laws of the United States or any
jurisdiction thereof having a combined capital and surplus of at least $50,000,000 and shall
satisfy the requirements of Section 3807 of the Delaware Statutory Trust Act, provided,
that there exists such an institution willing, able and legally qualified to perform the duties of
the Trustee hereunder upon reasonable or customary terms.

     SECTION 7.4 Merger of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting from or surviving any
merger, conversion, or consolidation to which the Trustee shall be a party, or any corporation to
which all or substantially all the corporate trust business of the Trustee may be transferred,
shall, subject to the terms of this Article, succeed to the Trustee’s position as Trustee

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under this Trust Agreement without any further act.

     SECTION 7.5 Status of Successor Trustee. A successor Trustee shall have the same
duties, powers, and discretion conferred herein on the Trustee. A successor Trustee may accept the
assets of the Trust Estate delivered to it by its predecessor Trustee as constituting the entire
assets of the Trust Estate and shall not be required to take any action to determine what
constitutes the Trust Estate or to obtain possession of any assets thereof or to investigate any
acts, omissions or misconduct of its predecessor Trustee.

     SECTION 7.6 Co-Trustee. At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any part of the Trust Estate hereunder may at the time be
located, the Trustee shall have power to appoint one or more Persons (who may be officers or
affiliates of the Trustee) or institutions to act as co-Trustee, jointly with the Trustee or
separately from the Trustee at the direct written instruction of the Depositor, in either case as
required by applicable state law, of all or any part of the Trust Estate hereunder, or of any
property constituting part thereof, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity as aforesaid, any
property, title, right, or power deemed necessary or desirable. All provisions of this Trust
Agreement which are for the benefit of the Trustee shall extend to and apply to each co-Trustee
appointed pursuant to the foregoing provisions of this Section.

ARTICLE VIII

DISSOLUTION AND TERMINATION OF AND AMENDMENT TO TRUST

     SECTION 8.1 Dissolution of Trust; Termination of Trust Agreement. The Trust will
dissolve upon the earlier of (i) the final disposition by the Trustee of all property constituting
part of the Trust Estate or (ii) the time at which all property constituting part of the Trust
Estate would otherwise escheat to any applicable governing body under any escheat laws that would
otherwise apply to such property. Promptly upon dissolution of the Trust, and after the payment or
the making of reasonable provision for the payment of any claims or obligations of the Trust in
accordance with Section 3808 of the Delaware Statutory Trust Act, the Trustee shall file, at the
direction and expense of the Depositor, a certificate of cancellation with the Delaware Secretary
of State and thereupon this Agreement (except for those provisions that expressly survive) and the
Trust shall terminate.

     SECTION 8.2 Supplements and Amendments to this Trust Agreement. (a) At any time and
from time to time (i) the Trustee, together with the Depositor, may execute and deliver an
amendment or a supplement to this Trust Agreement to the extent, but only to the extent, that it
relates to the Trust for the purpose of adding provisions to or changing or eliminating provisions
of this Trust Agreement and the Trust as specified in a written request of the Depositor and (ii)
upon the written request of the Depositor, the Trustee shall enter into such written amendment of
or supplement to any of the other documents referred to herein as the Depositor may agree to (to
the extent such agreement is required) and as may be specified in such request, or execute and

81

 

deliver such written waiver or modification of the terms of any such other document as may be
specified in such request.

     (b) Prior to executing any document required to be executed by it pursuant to the terms of
Section 8.2(a), the Trustee shall be entitled to receive (i) an opinion of counsel to the effect
that the execution of such document is authorized hereunder and (ii) an Officer’s Certificate of
the Depositor to the effect that all conditions precedent to the execution of the amendment or
supplement have been met. If, in the reasonable opinion of the Trustee, any such document adversely
affects any right, duty, immunity, or indemnity in favor of the Trustee hereunder, the Trustee may
in its discretion decline to execute such document, unless the Trustee shall have been indemnified
therefor by the Depositor in manner and form satisfactory to the Trustee.

     SECTION 8.3 Limitations on Rights of Others. Nothing in this Trust Agreement, whether
express or implied, shall be construed to give to any Person other than the Trustee, the
Beneficiaries, and the Depositor any legal or equitable right, remedy, or claim under or in respect
of this Trust Agreement, any covenants, conditions or provisions contained herein or in the Trust
Estate, all of which are and shall be construed to be for the sole and exclusive benefit of the
Trustee, the Depositor and the Beneficiaries.

ARTICLE IX

MISCELLANEOUS

     SECTION 9.1 Entire Agreement. This Trust Agreement embodies the entire agreement and
understanding between the Depositor and the Trustee relating to the subject matter hereof and of
the Trust created pursuant hereto, and upon execution and delivery hereof, this Trust Agreement
will supersede any prior agreements and understandings relating to the Trust created hereby.

     SECTION 9.2 Notices. Except as otherwise set forth herein, all notices, consents, and
other communications relating to this Trust Agreement shall be given as follows:

	 	(i)	 	if to the Depositor, at
	 
	 	 	 	Furniture Brands International, Inc.

1 N. Brentwood Blvd.

St. Louis, Missouri 63105

Attention: General Counsel
	 
	 	(ii)	 	if to the Trustee, at
	 
	 	 	 	[TRUSTEE ADDRESS]

or such other address, telephone, or telecopy number or other destination as the Depositor or the
Trustee may from time to time designate by notice given in accordance with the provisions of this
Section 9.2.

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     SECTION 9.3 Governing Law. This Trust Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to principles of conflict of
laws.

     SECTION 9.4 Benefit of Parties, Successors and Assigns. This instrument shall be
binding upon, and shall inure solely to the benefit of, the Beneficiaries and the parties hereto
and their respective successors and assigns.

     SECTION 9.5 Survival of Representations and Warranties. All representations and
warranties contained herein shall survive the execution and delivery of this Trust Agreement and
the establishment of the Trust.

     SECTION 9.6 Severability of Invalid Provisions. Any provision of this Trust Agreement
which is prohibited or unenforceable in any jurisdiction as to the Trust shall, as to the Trust and
such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
To the extent permitted by applicable law, the parties hereto hereby waive with respect to the
Trust any provision of law which renders any provision hereof prohibited or unenforceable in any
respect.

     SECTION 9.7 Effect of Waiver; Remedies Not Exclusive. Waiver of the breach of any
provision hereunder shall not be deemed a waiver of any prior or subsequent breach of the same or
any other provision hereof. Pursuit of any remedy with respect to the Trust shall not be deemed the
waiver of any other remedy hereunder or at law or in equity.

     SECTION 9.8 Representations and Warranties. The Depositor hereby represents and
warrants to the Trustee, as of the date hereof, that:

     (a) Due Organization. The Depositor is a corporation duly organized and validly
existing in good standing under the laws of Delaware, and has the power and authority to enter into
and perform its obligations under this Trust Agreement.

     (b) Due Authorization. The execution, delivery, and performance by the Depositor of
this Trust Agreement has been duly authorized by all necessary action on the part of the Depositor
and does not require the consent or approval of its stockholders or any trustee or holder of any of
its indebtedness or other obligations, except such as have been duly obtained, given, or
accomplished.

     (c) Execution; Enforceability. This Trust Agreement has been duly executed and
delivered by the Depositor and (assuming the due authorization, execution and delivery by the
Trustee of this Trust Agreement) this Trust Agreement constitutes the Depositor’s legal, valid, and
binding obligation, enforceable against it in accordance with the terms hereof, subject to
applicable bankruptcy laws and laws affecting the rights of creditors generally.

     (d) No Violation; No Consent. Neither the Depositor nor the Trust is an “Investment
Company” or a company controlled by an “Investment Company” required to register as such under the
Investment Company Act of 1940, as amended and that the execution, delivery and

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performance of this
Trust Agreement does not and will not violate or require any consent or
approval of, the withholding of objection on the part of, the giving of notice to, the filing,
registration or qualification with, or the taking of any other action under, any agreement,
license, indenture, or instrument to which it is a party or by which it is bound or any provision
of any law, rule, regulation, judgment, order, writ, injunction, or decree of any court or
governmental authority applicable to it or any of its property.

     SECTION 9.9 References to Agreements and Instruments. Except as otherwise indicated,
all the agreements and instruments herein defined shall mean such agreements or instruments as the
same may from time to time be supplemented or amended or the terms thereof waived or modified to
the extent permitted by, and in accordance with, the terms hereof and thereof.

     SECTION 9.10 Headings. The division of this Trust Agreement into articles and sections
and the insertion of headings are for the convenience of reference only and shall not affect the
construction or interpretation of this Trust Agreement.

     SECTION 9.11 Counterpart Execution and Dating. This Trust Agreement and any amendment
or supplement to this Trust Agreement may be executed in any number of counterparts and by the
different parties hereto and thereto on separate counterparts, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together constitute but one and
the same instrument. Fully executed sets of counterparts shall be delivered to, and retained by,
the parties hereto.

     SECTION 9.12 Limitation on the Depositor’s and the Beneficiaries’ Liability. The
Depositor shall not have any liability for the performance of this Trust Agreement except as
expressly set forth herein. The Beneficiaries shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized under the general
corporation law of the State of Delaware.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the parties hereto have each caused this Trust Agreement to be duly
executed by their respective officers thereunto duly authorized as of the date first above set
forth.

	 	 	 	 	 
	 	FURNITURE BRANDS INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	[TRUSTEE]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

85

 

	 	 	 	 	 

EXECUTION COPY

Exhibit A

CERTIFICATE OF TRUST OF

FURNITURE BRANDS INTERNATIONAL, INC 2009 RIGHTS EXCHANGE TRUST

     THIS Certificate of Trust of Furniture Brands International, Inc. 2009 Rights Exchange Trust
(the “Trust”), is being duly executed and filed by the undersigned, as trustee, to form a statutory
trust under the Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.) (the “Act”).

	1.	 	Name. The name of the statutory trust formed hereby is Furniture Brands International, Inc.
2009 Rights Exchange Trust.
	 
	2.	 	Delaware Trustee. The name and business address of the trustee of the Trust in the State of
Delaware is [                                                            ].
	 
	3.	 	Effective Date. This Certificate of Trust shall be effective upon filing.

     IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of Trust in accordance
with Section 3811(a) of the Act.

	 	 	 	 	 
	 	[TRUSTEE]

not in its individual capacity, but solely as Trustee

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

	 	 	 	 	 

Exhibit B

CERTIFICATION FOR TRANSFER OF RECORD OWNERSHIP OF

SHARES OF FURNITURE BRANDS INTERNATIONAL, INC. COMMON STOCK ISSUED

IN EXCHANGE FOR PREVIOUSLY OUTSTANDING RIGHTS

     On [                    ], each right previously outstanding under the Rights Agreement between
Furniture Brands International, Inc. (the “Company”) and American Stock Transfer and Trust Company,
LLC, as Rights Agent, dated as of February 26, 2010 (the “Rights Agreement”) was exchanged (the
“Exchange”) at the close of business on that date for one share of the Company’s Common Stock, no
par value (the “Common Stock”). The Exchange does not apply to rights formerly held by any
Acquiring Person (defined below) at the time of the Exchange.

     On [                    ], the Company’s Board of Directors determined that [Name of Acquiring Person]
became an “Acquiring Person” as of [                    ]. As a result, rights held by such Acquiring Person
became void on that date and such Acquiring Person is not eligible to participate in the Exchange.
No other person or group has been determined to be an Acquiring Person. In order to receive shares
of Common Stock in the Exchange, an eligible stockholder is required to certify that it is not an
Acquiring Person.

     Prior to [                    ] eligible stockholder certifications were to be provided to the
Company’s Exchange Agent, [Exchange Agent], for processing. On [                    ], [Exchange Agent]
transferred all shares that were not credited to the accounts of certifying stockholders to
[Trustee]. The Company has appointed [Trustee] to serve as Trustee under a Trust Agreement dated
[                    ], to hold these shares on behalf of eligible stockholders who did not received shares
of Common Stock in the Exchange pursuant to the initial distribution by [Exchange Agent] (each, a
“Beneficiary” and collectively, the “Beneficiaries”), pending receipt of the required
certification. For the avoidance of doubt, [the Acquiring Person] not a Beneficiary under the Trust
Agreement.

     To receive shares of Common Stock from the Trustee, an eligible stockholder must certify that
it is not an Acquiring Person by completing this certification form in the space provided below.

2

 

* * To receive a distribution of shares to which your clients may be entitled,

please certify the representation set forth below * * 

     The undersigned hereby represents, warrants, and certifies to [Trustee], as Trustee, that
he/she/it (a) was the holder of record of the number of shares specified below as of the Close of
Business (as defined in the Rights Agreement) on [                    ] and is entitled to distribution of
such number of shares pursuant to the Exchange, (b) is NOT, and does NOT hold shares on behalf of
any beneficial owner that is, and was NOT, and does NOT hold shares on behalf of any beneficial
owner that was, immediately prior to the declaration of the Exchange, an Acquiring Person (c) is a
Beneficiary under the Trust Agreement and understands and acknowledges that upon distribution of
the shares specified below he/she/it shall cease to be a Beneficiary under the Trust Agreement.

Number of Furniture Brand International, Inc. Shares Held by Beneficiary:                     

Name, address, telephone, and email of Beneficiary

	 	 	 	 	 	 	 
	Name:
	 	 	 	 	 	 
	 

	 	 

	 	 	 	 
	 
	 	 	 	 	 	 
	Address:
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	Telephone:

	 	 	 	Email:	 	 
	 

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Address for Delivery of Shares (if different from above):	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 

Tax ID Number/SSN:                                         

Form of Shares (circle one):            Physical Certificate           Book Entry

	 	 	 	 	 
	 	

 	 
	 	Signature:  	 	 
	
	 	 	Printed Name:  	 
	 	 	Date: 	 

3

 

Exhibit C

CERTIFICATE OF EXCHANGE

To Furniture Brands International, Inc. 2009 Rights Exchange Trust (the “Trust”):

     The undersigned hereby requests distribution of                      shares of common
stock, no par value (the “Common Stock”), of Furniture Brands International, Inc. (the “Company”),
distributable to the undersigned pursuant to the exchange declared on [_________] (the “Exchange”)
pursuant to the terms of the Rights Agreement between the Company and American Stock Transfer and
Trust Company, LLC (as amended and restated, the “Rights Agreement”). The undersigned further
requests that certificates representing such shares of Common Stock be issued in the name of:

	 	 	 
	(Please print name and address)
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     The undersigned hereby certifies as of the date hereof that he/she/it (a) was the holder of
record of that number of shares indicated above as of the Close of Business (as defined in the
Rights Agreement) on [_________] and is entitled to distribution of such number of shares pursuant
to the Exchange, (b) is a “Beneficiary” under the Trust Agreement, dated as of [_________],
between the Company and [Trustee], as Trustee (the “Trust Agreement”), (c) is not, and immediately
prior to the declaration of the Exchange was not, an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in the Rights Agreement) and (d) shall cease to
be a Beneficiary of the Trust upon distribution of the shares identified herein.

	 	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 

	 	 	 	Dated:

4

 

Exhibit D

CERTIFICATE OF EXCHANGE

To Furniture Brands International, Inc. 2009 Rights Exchange Trust (the “Trust”):

     The undersigned hereby requests distribution of                      shares of common
stock, no par value (the “Common Stock”), of Furniture Brands International, Inc. (the “Company”),
distributable to the undersigned pursuant to the exchange declared on [_________] (the “Exchange”)
pursuant to the terms of the Rights Agreement between the Company and American Stock Transfer and
Trust Company, LLC (as amended and restated, the “Rights Agreement”). The undersigned further
requests that certificates representing such shares of Common Stock be issued in the name of:

	 	 	 
	(Please print name and address)
	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

     The undersigned hereby certifies as of the date hereof that he/she/it (a) was the beneficial
owner of that number of shares indicated above as of the Close of Business (as defined in the
Rights Agreement) on [_________] and is entitled to distribution of such number of shares pursuant
to the Exchange, (b) is a “Beneficiary” under the Trust Agreement, dated as of [_________],
between the Company and [Trustee], as Trustee (the “Trust Agreement”), (c) is not, and immediately
prior to the declaration of the Exchange was not, an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in the Rights Agreement) and (d) shall cease to
be a Beneficiary of the Trust upon distribution of the shares identified herein.

	 	 	 	 	 
	 

	 	Signature:	 	 
	 

	 	 	 	 
	 

	 	 	 	Dated:

5

 

Exhibit E

IRREVOCABLE PROXY

     The undersigned, acting solely in its capacity as trustee of the Furniture Brand
International, Inc. 2009 Rights Exchange Trust (the “Trust”), which holds shares of common stock of
Furniture Brands International, Inc., a Delaware corporation (the “Company”), as of the date
hereof, hereby irrevocably appoints the Secretary of the Company, any other designee of the
Company’s Board of Directors, or any other person duly authorized to serve as proxy, as the sole
and exclusive attorney-in-fact and proxies of the undersigned, with full power of substitution and
re-substitution, to vote and exercise all voting and related rights (to the full extent that the
undersigned is entitled to do so) with respect to all of the shares of common stock of the Company
that now are or hereafter may be owned of record by the Trust, and any and all other shares or
securities of the Company issued or issuable, or exchanged or exchangeable, in respect thereof on
or after the date hereof (collectively, the “Shares”) in accordance with the terms of the Trust
Agreement, dated as of [_________] (as the same may be amended from time to time, the “Trust
Agreement”), between the Company and [Trustee], as trustee. This proxy is irrevocable and is
coupled with an interest.

The attorneys-in-fact and proxies named above, and each of them, are hereby authorized and
empowered by the undersigned to act as the undersigned’s attorney-in-fact and irrevocable proxy,
and to exercise all voting, consent, and similar rights of the undersigned with respect to the
Shares (including, without limitation, the power to execute and deliver written consents), subject
to and in accordance with the terms of the Trust Agreement.

Any obligation of the undersigned hereunder shall be binding upon the successors and assigns of the
undersigned.

	 	 	 	 	 
	 	[TRUSTEE]

as Trustee of the Furniture Brands International,

Inc. 2009 Rights Exchange Trust

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Date:  	 	 
	 

6exv10w1

Exhibit 10.1

FURNITURE BRANDS INTERNATIONAL, INC.

EXECUTIVE SEVERANCE PLAN

(Amended and Restated Effective July 1, 2010)

	1.	 	Purpose.
	 
	 	 	The Furniture Brands International, Inc. Executive Severance Plan (the “Plan”) is a top hat welfare
plan under the Employee Retirement Income Security Act of 1974 and is intended to provide severance
benefits to certain key employees of Furniture Brands International, Inc. (the “Company”) in the
event of their termination of employment. The provisions herein are being offered and provided at
the sole discretion of the Company. This Plan was originally effective May 3, 2007 and is amended
and restated effective July 1, 2010.
	 
	2.	 	Definitions.
	 
	 	 	As used herein, the terms identified below shall have the meanings indicated:
	 
		 	(a) “Administrator” means the Human Resources Committee of the Board of Directors of
the Company (unless and until the Board appoints another committee to administer this Plan).
	 
		 	(b) “Board” means the Board of Directors of the Company.
	 
		 	(c) “Cause” means the Company’s termination of an Eligible Executive’s employment
with the Company as a result of: (i) engaging by the Eligible Executive in willful
misconduct that is materially injurious to Company; (ii) conviction of the Eligible
Executive by a court of competent jurisdiction of, or entry of a plea of nolo
contendere with respect to a felony; (iii) engaging by the Eligible Executive in
fraud, material dishonesty or gross misconduct in connection with the business of Company;
(iv) engaging by the Eligible Executive in any act of moral turpitude reasonably likely to
materially and adversely affect Company or its business; or (v) the Eligible Executive’s
current chronic abuse of or dependency on alcohol or drugs (illicit or otherwise). No act
or omission of the Eligible Executive shall be “willful” if conducted in good faith or with
a reasonable belief that such conduct was in the best interests of the Company. No
termination shall be for “Cause” unless approved by a resolution of a majority of the
members of the Board after reasonable prior notice to the Eligible Executive and an opportunity to
appear (with the assistance of counsel) before the Board.
	 
		 	(d) “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985.
	 
		 	(e) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations
and other guidance promulgated by the Treasury Department and the Internal Revenue Service
thereunder.

 

 

		 	(f) “Constructive Termination” means the Eligible Executive’s voluntary termination
of employment with the Company as a result of:

	 	(i)	 	a material diminution in the Eligible Executive’s title,
authority, duties or responsibilities, or a change in the Eligible Executive’s
supervisory reporting relationship within the Company;
	 
	 	(ii)	 	a change, caused by the Company, in geographic location of
greater than fifty (50) miles of the location at which the Eligible Executive
primarily performs services for the Company; or
	 
	 	(iii)	 	a material reduction in the Eligible Executive’s base pay,
incentive compensation or benefits.

     No voluntary termination by the Eligible Executive shall constitute a “Constructive
Termination” unless he shall have given (x) notice of the proposed termination due to
Constructive Termination, with particulars, to the Company not later than ninety (90) days
following the initial occurrence of the condition above forming the basis for such
termination and (y) the Company an opportunity for 30 days after such notice within which to
remedy such condition, in which such condition is not remedied.

(g) “Disability” means any medically determinable physical or mental impairment
resulting in the Eligible Executive’s inability to perform the duties of his or her position
or any substantially similar position, where such impairment is expected to result in death
or is expected to last for a continuous period of not less than six (6) months.

(h) “Eligible Executive” means a key employee of the Company who:

	 	(i)	 	is expressly designated as an “Eligible Executive” by the
Company for the purposes of this Plan pursuant to resolutions duly adopted by
the Board; and
	 
	 	(ii)	 	receives written notice of his or her status as an Eligible
Executive.

(i) “Operating Unit” shall mean any subsidiary, division or other business unit of
Company.

(j) “Qualifying Termination” means either:

	 	(i)	 	an involuntary termination of an Eligible Executive’s
employment by the Company without Cause; or
	 
	 	(ii)	 	a voluntary termination of an Eligible Executive’s employment
by the Eligible Executive as a result of a Constructive Termination.

(k) “Severance Payment” means the aggregate gross amount of severance payments
determined in accordance with Section 4 of this Plan to be paid to an Eligible Executive who
is entitled to receive such severance benefits under this Plan.

2

 

(l) “Specified Employee” means any employee of the Company and its Affiliates that
the Company determines is a Specified Employee within the meaning of Section 409A of the
Code. The Company shall determine whether an employee is a Specified Employee by applying
reasonable, objectively determinable identification procedures established by the Board (or
a committee thereof) from time to time in accordance with Section 409A of the Code. For
this purpose, an “Affiliate” is any person or entity with whom the Company would be
considered a single employer under Sections 414(b) or 414(c) of the Code.

(m) “Termination Date” means the date on which an Eligible Executive has a
“separation from service,” within the meaning of Section 409A of the Code, from the Company.

	3.	 	Eligibility.

(a) Eligible Executives. Only Eligible Executives shall be eligible to receive
benefits under this Plan.

(b) Qualifying Termination. Subject to the conditions described herein, including
without limitation, the requirements of Section 10(a) of this Plan, the Company will pay
severance benefits under Section 4 of this Plan solely to an Eligible Executive who incurs a
Qualifying Termination.

(c) Non-Qualifying Termination. Notwithstanding any other provision of this Plan to
the contrary, nothing in this Plan shall be construed to require the Company to pay any of
the severance benefits under this Plan to an Eligible Executive if the Eligible Executive
terminates employment with the Company under any circumstances that do not constitute a
Qualifying Termination, including, without limitation:

	 	(i)	 	a voluntary termination by the Eligible Executive
(i.e., a termination, including retirement, initiated by the Eligible
Executive), other than a Constructive Termination;
	 
	 	(ii)	 	the Company having terminated such Eligible Executive’s
employment for Cause;
	 
	 	(iii)	 	death; or
	 
	 	(iv)	 	Disability.

	4.	 	Amount and Payment of Benefits.

          Subject to Section 10(a) of this Plan, an Eligible Executive who incurs a Qualifying
Termination shall be entitled to receive the severance benefits described in this Section 4.

3

 

(a) Severance Payment. Unless otherwise provided herein, an Eligible Executive who
incurs a Qualifying Termination shall receive a Severance Payment in an amount equal to the
sum of:

	 	(i)	 	one times the Eligible Executive’s annual base salary as of the
Eligible Executive’s Termination Date; and
	 
	 	(ii)	 	one times the Eligible Executive’s target annual bonus under the Company’s Short-Term Incentive Plan with respect to the year
in which the Termination Date occurs.

(b) Method of Payment. Any Severance Payment made under this Plan shall be paid in
a single lump-sum cash payment, less all applicable withholding taxes, thirty (30) days
following the Eligible Executive’s Termination Date or as soon as administratively
practicable thereafter but in no event later than the latest date permitted under Section
409A of the Code. Notwithstanding the foregoing, if the Eligible Executive is a Specified
Employee on his or her Termination Date, the Severance Payment shall be paid on the first
day of the seventh month following the Eligible Executive’s Termination Date or, if earlier,
the date the Eligible Executive dies following such Termination Date.

(c) Equity Award Vesting. An Eligible Executive who incurs a Qualifying Termination
shall vest in any and all non-qualified stock options, incentive stock options, stock
appreciation rights, restricted stock, performance shares, performance units, and restricted
stock units (collectively, “Equity Awards”) previously granted to the Eligible Executive by
the Company that are outstanding on the Eligible Executive’s Termination Date in accordance
with the terms of the plan(s) under which such Equity Awards were granted and,
notwithstanding the terms of the applicable plan or Equity Award, such Eligible Executive
shall be entitled to exercise each vested stock option and stock appreciation right until
the earlier of (i) the one (1) year anniversary of the Termination Date and (ii) the last
day of its original term.

(d) Short-Term Incentive Plan. An Eligible Executive who incurs a Qualifying
Termination shall be entitled to receive a prorated annual incentive bonus under the
Company’s Short-Term Incentive Plan (or successor plan) in respect of the fiscal year during
which the Termination Date occurs, the amount of which shall be equal to the amount of the
annual incentive bonus, if any, that would be due under such Company’s Short-Term Incentive
Plan (or successor plan) had the Eligible Executive remained employed through the end of
such fiscal year, multiplied by a fraction, the numerator of which is the number of days in
such fiscal year prior to the Termination Date and the denominator of which is three hundred
sixty five (365), payable at the time such annual incentive bonus would have been paid had
the Eligible Executive remained employed through the date of such payment.

(e) Long-Term Cash Plans. In the event that the Termination Date of an Eligible
Executive who incurs a Qualifying Termination occurs eighteen (18) months or more after the
commencement of a three-year performance cycle under the Company’s Long-Term Incentive Plan,
the Eligible Executive shall be entitled to receive a payment equal

4

 

to the pro-rata portion (determined as of the Termination Date) of the cash payment otherwise payable under the
terms of the Company’s Long-Term Incentive Plan to that Eligible Executive. Such Payment
will be paid at the same time that the payment would have been paid under the Company’s
Long-Term Incentive Plan had the Eligible Executive continued employment through end of the
performance period during which the Termination Date occurred.

(f) Benefits Continuation. The Company (at its expense) shall, for a period of
twelve (12) months following the Eligible Executive’s Termination Date, provide the
following benefits to an Eligible Executive who incurs a Qualifying Termination:

	 	(i)	 	reimburse the Eligible Executive for the reasonable costs of
outplacement services, reasonable job hunting expenses, travel costs, and
financial counseling costs associated with employment transition not to exceed
$40,000; provided that, a reimbursement shall be made as soon
as practicable after submission of appropriate expense reports but in no event
later than the end of the Eligible Executive’s taxable year following the year
in which expense was incurred; and
	 
	 	(ii)	 	allow the Eligible Executive to participate in the welfare
plans the Company generally makes available to its key employees on
substantially the same terms as an actively employed key employee (except that
the Eligible Executive may not continue to participate in the Company’s
Short-Term Disability and Long-Term Disability Plans); provided
that health, dental and vision benefit plan coverage shall be provided
on an after-tax basis, meaning that the Company shall report to the appropriate
tax authorities the cost of such coverage as taxable income to Eligible Executive.

	5.	 	Sale of an Operating Unit.
	 
	 	 	Notwithstanding anything to the contrary set forth herein, and subject to Section 10(a) of
this Plan, an Eligible Executive who incurs a Qualifying Termination in connection with the
sale, divestiture or other disposition of any Operating Unit shall be entitled to receive
the severance benefits described in Section 4 including an increase in the multiplier set
forth in Section 4(a) above from one times to one and one half (1.5) times the results of
the formulas set forth in such Section 4(a); provided that the Eligible Executive is not
offered continued employment, or continues in employment, with the divested Operating Unit
or the purchaser of the assets of the Operating Unit, as the case may be, or their
respective affiliates on terms and conditions that would not constitute a Constructive
Termination.
	 
	6.	 	Non-Disclosure of Confidential Information.
	 
	 	 	Each Eligible Executive expressly recognizes and acknowledges that during the Eligible Executive’s
employment with the Company, the Eligible Executive became entrusted with, had access to, or gained
possession of confidential and proprietary information,

5

 

	 	 	data, documents, records, materials, and other trade secrets and/or other proprietary business information of the Company that is not
readily available to competitors, outside third parties and/or the public, including without
limitation, information about (i) current or prospective customers and/or suppliers, (ii)
employees, research, goodwill, production, and prices, (iii) business methods, processes, practices
or procedures, (iv) computer software and technology development, and (v) business strategy,
including acquisition, merger and/or divestiture strategies (collectively or with respect to any of
the foregoing, the “Confidential Information”). The Eligible Executive agrees, by acceptance of
the benefits under this Plan, to protect and maintain as confidential all Confidential Information
concerning the business activities of the Company that were acquired in connection with or as a
result of the performance of service for the Company for a period of twelve(12) months from the
Termination Date.

	7.	 	Non-Compete.
	 
	 	 	For a period of twelve (12) months following termination of the Eligible Executive’s employment
hereunder, or for a period of eighteen (18) months in the event of a termination of the Eligible
Executive’s employment pursuant to Section 5 above, the Eligible Executive shall not engage, or
attempt to engage, on his or her own behalf or on behalf of a third-party in any “Competitive
Activity”. The term “Competitive Activity” shall mean participation by the Eligible Executive,
without written consent of the Company, in the part-time or full-time management or consulting of
or for any business operation of any enterprise if such operation engages in the design,
manufacture, marketing or retail of furniture.
	 
	8.	 	Administration/Amendment/Termination.

	 	(a)	 	Administrator. The Administrator has the sole discretionary authority to
construe and interpret this Plan and to make any and all determinations related to
administration of this Plan, including all questions of eligibility for participation and
benefits, to the maximum extent permitted by law. The decisions, actions and
interpretations of the Administrator are final and binding on all parties.
	 
	 	(b)	 	Amendment/Termination. The Company reserves the right to amend or terminate
this Plan, in whole or in part, at any time. No such amendment may impair the rights of an
Eligible Employee who has terminated employment pursuant to Section 3(b) of this Plan unless
such amendment is agreed to in a writing signed by the Eligible Executive and the Company.

	9.	 	Claims for Benefits.
	 
	 	 	In the event an Eligible Executive disputes or otherwise disagrees with the Company’s determination
of the severance benefits payable to him or her and desires to make a claim (the “claimant”) with
respect to any of the benefits provided hereunder, the claimant shall

6

 

	 	 	so notify, in writing, the Administrator by actual receipt or registered mail (addressed to the “Human Resources Committee,
Furniture Brands International, Inc., 1 N. Brentwood Blvd., St. Louis, MO 63105”) and shall submit
evidence of events constituting a termination of employment with the Company. Any claim with
respect to any of the benefits provided under this Plan shall be made in writing within one hundred
eighty (180) days of the later of his or her becoming aware of the event which the claimant asserts entitles him or her to severance benefits or
the Company notifying him or her of its determination of the severance benefits payable to him or
her under this Plan as a result of the occurrence of that event. Failure by the claimant to submit
his or her claim within such one hundred eighty (180) day period shall bar the claimant from
disputing the Company’s notification to him or her of its determination of the severance benefits
payable to him or her under this Plan as a result of the occurrence of that event.

Upon receipt of a claim, the Administrator shall advise the claimant that a reply will be
forthcoming within a reasonable period of time, but ordinarily not later than ninety (90) days, and
shall, in fact, deliver such reply within such period. However, the Administrator may extend the
reply period for an additional ninety (90) days for reasonable cause. If the reply period will be
extended, the Administrator shall advise the claimant in writing during the initial ninety (90) day
period indicating the special circumstances requiring an extension and the date by which the
Administrator expects to render the benefit determination. The Administrator will inform the
claimant in writing of its determination and the reasons therefor in terms calculated to be
understood by the claimant. The notice shall set forth the specific reasons for the denial, make
specific reference to the pertinent Plan provisions on which the denial is based, and describe any
additional material or information necessary for the claimant to perfect the claim and explain why
such material or such information is necessary. Such notice shall, in addition, inform the
claimant what procedure the claimant should follow to take advantage of the review procedures set
forth below in the event the claimant desires to contest the denial of the claim.

The claimant or his or her duly authorized representative may appeal the denial of the claim to the
Administrator at any time within sixty (60) days after the receipt by the claimant of written
notice from the Administrator of the denial of the claim. In connection therewith, the claimant or
his or her duly authorized representative may request a review of the denied claim, may review
pertinent documents, and may submit issues and comments in writing. Upon receipt of a request for
review of a denied claim, the Administrator shall make a decision with respect thereto and, not
later than sixty (60) days after receipt of a request for review, shall furnish the claimant with a
decision on the review in writing, including the specific reasons for the decision written in a
manner reasonably calculated to be understandable by the claimant or the claimant’s attorney or accountant, as well as specific reference to the pertinent provisions of
this Plan upon which the decision is based. If special circumstances require that the sixty (60)
day time period be extended, the Administrator will so notify the claimant within the initial sixty
(60) day period indicating the special circumstances requiring an extension and the date by which
the Administrator expects to render its decision on review, which will be as soon as possible but
not later than one hundred twenty (120) days after receipt of the request for review. In reaching
its decision, the Administrator shall have the

7

 

discretionary authority in good faith to determine on behalf of the Company all questions arising under this Plan.

	10.	 	Miscellaneous Provisions.

(a) Release. In consideration of the covenants under this Plan and as a condition
precedent to receiving any payments under this Plan, an Eligible Executive shall (i) execute
and deliver to the Company a release of all claims in such form as requested by the Company
within twenty-two (22) days following the Eligible Executive’s Termination Date and (ii) not
revoke the release during the seven (7) day period following the date that the Eligible
Executive executed the release. The Company shall supply a form of such release to the
Eligible Executive no later than the Termination Date.

(b) Waiver. The failure of the Company to enforce at any time any of the provisions
of this Plan, or to require at any time performance of any of the provisions of this Plan,
shall in no way be construed to be a waiver of these provisions, nor in any way to affect
the validity of this Plan or any part thereof, or the right of the Company thereafter to
enforce every provision.

(c) Benefits Not Transferable. Except as may be required by law, no benefit that
shall be payable under this Plan to any Eligible Executive shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any
attempt to alienate, sell, transfer, assign, pledge, encumber or charge all or any part of
the benefit shall be void; provided, however, that, in the event of the
death of a terminated Eligible Executive prior to the end of the period over which such
Eligible Executive is entitled to receive severance benefits under this Plan, the severance
benefits payable hereunder shall be paid to the estate of such Eligible Executive or to the person who acquired the rights to such benefits by bequest or
inheritance. Except as may be provided by law, no benefit shall in any manner be liable
for, or subject to, the debts, contracts, liabilities, engagements or torts of any Eligible
Executive, nor shall it be subject to attachment or legal process for, or against, the
Eligible Executive and the same shall not be recognized under this Plan.

(d) Successors of the Company. The rights and obligations of the Company under this
Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of
the Company.

(e) No Contract of Employment. The definitions and criteria set forth herein are
solely for the purpose of defining Plan eligibility. No legal rights to employment are
created or implied by this Plan, nor are any conditions or restrictions hereby placed on
termination of employment. Unless the employee has a written employment agreement binding
on the Company that provides otherwise, employment with the Company is employment-at-will.
As such, termination of employment may be initiated by the Eligible Executive or by the
Company at any time for any reason that is not unlawful, with or without Cause.

8

 

(f) Governing Law. To the extent not pre-empted by federal law, this Plan shall be
construed, administered and governed in accordance with and governed by the laws of the
State of Missouri, without regard for any conflict of law principles. Any action concerning
this Plan shall be brought in a court of competent jurisdiction in Saint Louis County,
Missouri and each party consents to the venue and jurisdiction of such courts.

(g) Entire Plan. This Plan constitutes the Company’s entire Executive Severance
Plan for the Eligible Executive and, except as provided in Section 10(h) of this Plan,
supersedes any and all previous representations, understandings and plans with respect to
general severance for the Eligible Executives, and any such representations, understandings
and plans with respect to officer severance are hereby canceled and terminated in all
respects.

(h) Severability and Interpretation; No Duplication of Benefits. As to each
Eligible Executive who is a party to a Change in Control Agreement with the Company, in the
event of a conflict between the terms of this Plan and any of the definitions or provisions in such Change in Control Agreement, the terms of the
Change in Control Agreement shall prevail. Whenever possible, each provision of this Plan
and any portion hereof shall be interpreted in such a manner as to be effective and valid
under applicable law, rules and regulations. If any covenant or other provision of this
Plan (or portion thereof) shall be held to be invalid, illegal, or incapable of being
enforced, by reason of any rule of law, rule, regulation, administrative order, judicial
decision or public policy, all other conditions and provisions of this Plan shall,
nevertheless, remain in full force and effect, and no covenant or provision shall be deemed
dependent upon any other covenant or provision (or portion) unless so expressed herein. The
parties hereto desire and consent that the court or other body making such determination
shall, to the extent necessary to avoid any unenforceability, so reform such covenant or
other provision or portion of this Plan to the minimum extent necessary so as to render the
same enforceable in accordance with the intent herein expressed. Under no circumstances
shall an Eligible Executive be entitled to any benefits under this Plan if the Eligible
Executive has already been provided with, or will be provided with, benefits under a Change
of Control Agreement between the Company and the Eligible Executive.

(i) No Mitigation Required. The Eligible Executive shall not be required to
mitigate the amount provided for in Section 4 of this Plan by seeking other employment or
otherwise, nor shall the amount of any payment provided for in Section 4 of this Plan be
reduced by any compensation earned by the Eligible Executive as the result of employment by
another employer after the date of termination, or otherwise.

(j) Validity. In the event any provision of this Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the validity of any
other provisions of this Plan.

(k) Captions and Titles. Captions and titles have been used in this Plan only for
convenience, and in no way define, limit or describe the meaning of this Plan or any part
thereof.

9

 

(l) Section 409A Savings Clause. This Plan is intended to comply with the
provisions of Section 409A of the Code and shall be administered and interpreted in
accordance with Section 409A of the Code. Without limiting the generality of the foregoing, any term or
provision that is determined by the Administrator to have an ambiguous definition shall be
interpreted, to the extent reasonable, to comply with Section 409A of the Code. Each
payment under this Plan shall be treated as a separate payment for purposes of Section 409A
of the Code. In no event may an Eligible Executive, directly or indirectly, designate the
calendar year of any payment to be made under this Plan. All reimbursements and in-kind
benefits, including any taxable health, dental and vision benefits provided under this Plan
that constitute deferred compensation within the meaning of Section 409A of the Code shall
be made or provided in accordance with the requirements of Section 409A of the Code,
including, without limitation, that (i) in no event shall reimbursements by Company under
this Plan be made later than the end of the calendar year next following the calendar year
in which the applicable fees and expenses were incurred, provided, that the Eligible
Executive shall have submitted an invoice for such fees and expenses at least ten (10) days
before the end of the calendar year next following the calendar year in which such fees and
expenses were incurred; (ii) the amount of in-kind benefits that Company is obligated to pay
or provide in any given calendar year (other than medical reimbursements described in Treas.
Reg. Section 1.409A-3(i)(1)(iv)(B)) shall not affect the in-kind benefits that Company is
obligated to pay or provide in any other calendar year; (iii) the Eligible Executive’s right
to have the Company pay or provide such reimbursements and in-kind benefits may not be
liquidated or exchanged for any other benefit; and (iv) in no event shall Company’s
obligations to make such reimbursements or to provide such in-kind benefits apply later than
the end of the third year following the year in which Eligible Executive’s Termination Date
occurred.

	 	 	 	 	 
	 	FURNITURE BRANDS INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Beth Sweetman
 	 
	 	Title: Senior Vice President- Human Resources 	 
	 	Date:  2/24/10 	 
	 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}]]