Document:

Exhibit 10.1

PROMISSORY NOTE

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Principal

 	
  

 	
 Loan Date

 	
  

 	
 Maturity

 	
  

 	
 Loan No

 	
  

 	
 Call / Coll

 	
  

 	
 Account

 	
  

 	
 Officer

 	
  

 	
 Initials

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 $8,000,000.00

 	
  

 	
 02-14-2014

 	
  

 	
 02-13-2015

 	
  

 	
  

 	
  

 	
 A5A0 / A0

 	
  

 	
  

 	
  

 	
 027

 	
  

 	
  

 

References in
the boxes above are for Lender’s use only and do not limit the applicability of
this document to any particular loan or item. 

Any item above containing “***” has been omitted due to text length
limitations.

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Borrower:

 	
 Flexsteel Industries, Inc.

 	
  

 	
 Lender:

 	
 American Trust & Savings Bank

 
	
  

 	
 385 Bell St

 	
  

 	
  

 	
 Dubuque - Main

 
	
  

 	
 Dubuque,
 IA     52001-7004

 	
  

 	
  

 	
 895 Main St

 
	
  

 	
  

 	
  

 	
  

 	
 PO Box 938

 
	
  

 	
  

 	
  

 	
  

 	
 Dubuque,
 IA     52004-0938

 

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Principal
 Amount:

 	
 $8,000,000.00

 	
  

 	
 Date of Note:

 	
 February 14,
 2014

 

	
  

 	
  

 
	
  

 	
 PROMISE TO PAY. Flexsteel Industries, Inc. (“Borrower”)
 promises to pay to American Trust & Savings Bank (“Lender”), or order, in
 lawful money of the United States of America, the principal amount of Eight
 Million & 00/100 Dollars ($8,000,000.00) or so much as may be
 outstanding, together with interest on the unpaid outstanding principal
 balance of each advance. Interest shall be calculated from the date of each
 advance until repayment of each advance.

 
	
  

 	
  

 
	
  

 	
 PAYMENT. Borrower will pay this loan in one payment of all
 outstanding principal plus all accrued unpaid interest on February 13, 2015.
 In addition, Borrower will pay regular monthly payments of all accrued unpaid
 interest due as of each payment date, beginning March 14, 2014, with all
 subsequent interest payments to be due on the same day of each month after
 that. Unless otherwise agreed or required by applicable law, payments will be
 applied to accrued unpaid interest first; then to principal; then to escrow;
 then to insurance; then to dealer reserves; then to late charges, and then to
 fee plan. Borrower will pay Lender at Lender’s address shown above or at such
 other place as Lender may designate in writing.

 
	
  

 	
  

 
	
  

 	
 VARIABLE INTEREST RATE. The interest rate on this
 Note is subject to change from time to time based on changes in an
 independent index which is the base rate on corporate loans posted by at
 least 70% of the 10 largest U.S. banks known as Wall Street Journal U.S.
 Prime Rate as published in the Wall Street Journal (the “Index”). The Index
 is not necessarily the lowest rate charged by Lender on its loans. If the Index
 becomes unavailable during the term of this loan, Lender may designate a
 substitute index after notifying Borrower. Lender will tell Borrower the
 current Index rate upon Borrower’s request. The interest rate change will not
 occur more often than each day the Wall Street Journal is published. Borrower
 understands that Lender may make loans based on other rates as well. The Index currently is 3.250% per annum.
 Interest on the unpaid principal balance of this Note will be calculated as
 described in the “INTEREST CALCULATION METHOD” paragraph using a rate of
 2.000 percentage points under the Index, resulting in an initial rate of
 1.250%. NOTICE: Under no circumstances will the interest rate on this Note be
 more than the maximum rate allowed by applicable law.

 
	
  

 	
  

 
	
  

 	
 INTEREST CALCULATION METHOD. Interest on this Note is
 computed on a 365/360 basis; that is, by applying the ratio of the interest
 rate over a year of 360 days, multiplied by the outstanding principal
 balance, multiplied by the actual number of days the principal balance is
 outstanding. All interest payable under this Note is computed using this
 method. This calculation method results in a higher effective interest rate
 than the numeric interest rate stated in this Note.

 
	
  

 	
  

 
	
  

 	
 PREPAYMENT. Borrower may pay without
 penalty all or a portion of the amount owed earlier than it is due. Early
 payments will not, unless agreed to by Lender in writing, relieve Borrower of
 Borrower’s obligation to continue to make payments of accrued unpaid
 interest. Rather, early payments will reduce the principal balance due.
 Borrower agrees not to send Lender payments marked “paid in full”, “without
 recourse”, or similar language. If Borrower sends such a payment, Lender may
 accept it without losing any of Lender’s rights under this Note, and Borrower
 will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed
 amounts, including any check or other payment instrument that indicates that
 the payment constitutes “payment in full” of the amount owed or that is
 tendered with other conditions or limitations or as full satisfaction of a
 disputed amount must be mailed or delivered to: AMERICAN TRUST & SAVINGS
 BANK, ATTN: LOAN OPERATIONS, PO BOX 938 DUBUQUE, IA 52004-0938.

 
	
  

 	
  

 
	
  

 	
 LATE CHARGE. If a payment is 15 days
 or more late, Borrower will be charged 5.000%
 of the regularly scheduled payment.

 
	
  

 	
  

 
	
  

 	
 INTEREST AFTER DEFAULT. Upon default, including
 failure to pay upon final maturity, the interest rate on this Note shall be
 increased by adding an additional 5.000 percentage point margin (“Default
 Rate Margin”). The Default Rate Margin shall also apply to each succeeding
 interest rate change that would have applied had there been no default.
 However, in no event will the interest rate exceed the maximum interest rate
 limitations under applicable law.

 
	
  

 	
  

 
	
  

 	
 DEFAULT. Each of the following
 shall constitute an event of default (“Event of Default”) under this Note:

 

	
  

 	
  

 
	
  

 	
 Payment Default. Borrower fails to make
 any payment when due under this Note.

 
	
  

 	
  

 
	
  

 	
 Other Defaults. Borrower fails to comply
 with or to perform any other term, obligation, covenant or condition
 contained in this Note or in any of the related documents or to comply with
 or to perform any term, obligation, covenant or condition contained in any
 other agreement between Lender and Borrower.

 
	
  

 	
  

 
	
  

 	
 Default in Favor of Third Parties. Borrower
 or any Grantor defaults under any loan, extension of credit, security
 agreement, purchase or sales agreement, or any other agreement, in favor of
 any other creditor or person that may materially affect any of Borrower’s
 property or Borrower’s ability to repay this Note or perform Borrower’s
 obligations under this Note or any of the related documents.

 
	
  

 	
  

 
	
  

 	
 False Statements. Any warranty,
 representation or statement made or furnished to Lender by Borrower or on
 Borrower’s behalf under this Note or the related documents is false or
 misleading in any material respect, either now or at the time made or
 furnished or becomes false or misleading at any time thereafter.

 
	
  

 	
  

 
	
  

 	
 Insolvency. The dissolution or
 termination of Borrower’s existence as a going business, the insolvency of
 Borrower, the appointment of a receiver for any part of Borrower’s property,
 any assignment for the benefit of creditors, any type of creditor workout, or
 the commencement of any proceeding under any bankruptcy or insolvency laws by
 or against Borrower.

 
	
  

 	
  

 
	
  

 	
 Creditor or Forfeiture Proceedings.
 Commencement of foreclosure or forfeiture proceedings, whether by judicial
 proceeding, self-help, repossession or any other method, by any creditor of
 Borrower or by any governmental agency against any collateral securing the
 loan. This includes a garnishment of any of Borrower’s accounts, including
 deposit accounts, with Lender. However, this Event of Default shall not apply
 if there is a good faith dispute by Borrower as to the validity or
 reasonableness of the claim which is the basis of the creditor or forfeiture
 proceeding and if Borrower gives Lender written notice of the creditor or
 forfeiture proceeding and deposits with Lender monies or a surety bond for
 the creditor or forfeiture proceeding, in an amount determined by Lender, in
 its sole discretion, as being an adequate reserve or bond for the dispute.

 
	
  

 	
  

 
	
  

 	
 Events Affecting Guarantor. Any of
 the preceding events occurs with respect to any guarantor, endorser, surety,
 or accommodation party of any of the indebtedness or any guarantor, endorser,
 surety, or accommodation party dies or becomes incompetent, or revokes or
 disputes the validity of, or liability under, any guaranty of the
 indebtedness evidenced by this Note.

 
	
  

 	
  

 
	
  

 	
 Change In Ownership. Any change in ownership
 of twenty-five percent (25%) or more of the common stock of Borrower.

 
	
  

 	
  

 
	
  

 	
 Adverse Change. A material adverse change
 occurs in Borrower’s financial condition, or Lender believes the prospect of
 payment or performance of this Note is impaired.

 
	
  

 	
  

 
	
  

 	
 Insecurity. Lender in good faith
 believes itself insecure.

 

	
  

 	
  

 
	
  

 	
 LENDER’S RIGHTS. Upon default, Lender may
 declare the entire unpaid principal balance under this Note and all accrued
 unpaid interest immediately due, and then Borrower will pay that amount. 

 
	
  

 	
  

 
	
  

 	
 ATTORNEYS’ FEES; EXPENSES. Lender
 may hire or pay someone else to help collect this Note if Borrower does not
 pay. Borrower will pay Lender that amount. This includes, subject to any
 limits under applicable law, Lender’s attorneys’ fees and Lender’s legal
 expenses, whether or not there is a lawsuit, including without limitation all
 attorneys’ fees and legal expenses for bankruptcy proceedings (including
 efforts to modify or vacate any automatic stay or injunction), and appeals.
 If not prohibited by applicable law, Borrower also will pay any court costs,
 in addition to all other sums provided by law.

 

	
  

 	
  

 
	
  

 	
 JURY WAIVER. Lender and Borrower hereby waive the right to
 any jury trial in any action, proceeding, or counterclaim brought by either
 Lender or Borrower against the other.

 
	
  

 	
  

 
	
  

 	
 GOVERNING LAW. This Note will be governed by federal law
 applicable to Lender and, to the extent not preempted by federal law, the
 laws of the State of Iowa without regard to its conflicts of law provisions.
 This Note has been accepted by Lender in the State of Iowa.

 
	
  

 	
  

 
	
  

 	
 CHOICE OF VENUE. If there is a lawsuit,
 Borrower agrees upon Lender’s request to submit to the jurisdiction of the
 courts of Dubuque County, State of Iowa.

 
	
  

 	
  

 
	
  

 	
 DISHONORED ITEM FEE. Borrower will pay a fee
 to Lender of $15.00 if Borrower makes a payment on Borrower’s loan and the
 check or preauthorized charge with which Borrower pays is later dishonored.

 
	
  

 	
  

 
	
  

 	
 RIGHT OF SETOFF. To the extent permitted
 by applicable law, Lender reserves a right of setoff in all Borrower’s
 accounts with Lender (whether checking, savings, or some other account). This
 includes all accounts Borrower holds jointly with someone else and all
 accounts Borrower may open in the future. However, this does not include any
 IRA or Keogh accounts, or any trust accounts for which setoff would be
 prohibited by law. Borrower authorizes Lender, to the extent permitted by applicable
 law, to charge or setoff all sums owing on the debt against any and all such
 accounts, and, at Lender’s option, to administratively freeze all such
 accounts to allow Lender to protect Lender’s charge and setoff rights
 provided in this paragraph.

 
	
  

 	
  

 
	
  

 	
 COLLATERAL. This loan is unsecured.

 
	
  

 	
  

 
	
  

 	
 LINE OF CREDIT. This Note evidences a
 revolving line of credit. Advances under this Note, as well as directions for
 payment from Borrower’s accounts, may be requested orally or in writing by
 Borrower or by an authorized person. Lender may, but need not, require that
 all oral requests be confirmed in writing. Borrower agrees to be liable for
 all sums either: (A) advanced in accordance with the instructions of an
 authorized person or (B) credited to any of Borrower’s accounts with Lender.
 The unpaid principal balance owing on this Note at any time may be evidenced
 by endorsements on this Note or by Lender’s internal records, including daily
 computer print-outs. Lender will have no obligation to advance funds under this
 Note if: (A) Borrower or any guarantor is in default under the terms of this
 Note or any agreement that Borrower or any guarantor has with Lender,
 including any agreement made in connection with the signing of this Note; (B)
 Borrower or any guarantor ceases doing business or is insolvent; (C) any
 guarantor seeks, claims or otherwise attempts to limit, modify or revoke such
 guarantor’s guarantee of this Note or any other loan with Lender; (D)
 Borrower has applied funds provided pursuant to this Note for purposes other
 than those authorized by Lender; or (E) Lender in good faith believes itself
 insecure.

 
	
  

 	
  

 
	
  

 	
 PURPOSE OF THE LOAN. The specific business
 purpose of this loan is to renew operating line of credit used to fund
 accounts receivable and inventory.

 
	
  

 	
  

 
	
  

 	
 PRIOR PROMISSORY NOTE. Borrower acknowledges and
 agrees that: (i) this Note constitutes a renewal and extension of that
 certain Promissory Note dated February 14, 2013, in the original principal
 amount of $8,000,000.00 issued by Borrower and made payable to Lender (as
 amended, modified, supplemented, renewed, extended and/or restated prior to
 the date hereof, the “Prior Promissory Note”); (ii) the issuance of this Note
 shall not constitute a novation, extinguishment, repayment, payment and
 reborrowing, or termination of the indebtedness evidenced by, or Borrower’s
 obligations under, the Prior Promissory Note; and (iii) the indebtedness
 evidenced by, and Borrower’s obligations under, the Prior Promissory Note are
 in all respects continuing with only the terms thereof being modified,
 amended and restated as provided in this Note.

 
	
  

 	
  

 
	
  

 	
 GUARANTOR. The term “guarantor”
 and/or “Guarantor” as used in this Note means each and every person or entity
 that guaranties the obligations of Borrower under this Note. This Note is
 supported by each and every guaranty of Borrower’s obligations under this
 Note from time to time executed by a guarantor in favor of Lender, as each
 may be amended, modified, supplemented, renewed, extended and/or restated
 from time to time.

 
	
  

 	
  

 
	
  

 	
 REQUIRED REPORTING INFORMATION. 

 
	
  

 	
 Annual Statements. As soon as available, but
 in no event later than one hundred twenty (120) days after the end of each
 fiscal year, Borrower agrees to provide a copy of Borrower’s balance sheet
 and incomer statement for the year ended , audited by a certified public
 accountant satisfactory to Lender. 

 
	
  

 	
  

 
	
  

 	
 Interim Financial Statement. As soon
 as available, but in no event later than sixty (60) days after the end of
 each fiscal quarter, Borrower agrees to provide a copy of Borrower’s balance
 sheet and profit and loss statement for the period ended, prepared by
 Borrower in form and substance satisfactory to Lender.

 
	
  

 	
  

 
	
  

 	
 SUCCESSOR INTERESTS. The terms of this Note
 shall be binding upon Borrower, and upon Borrower’s heirs, personal
 representatives, successors and assigns, and shall inure to the benefit of
 Lender and its successors and assigns.

 
	
  

 	
  

 
	
  

 	
 GENERAL PROVISIONS. If any part of this Note
 cannot be enforced, this fact will not affect the rest of the Note. Lender may
 delay or forgo enforcing any of its rights or remedies under this Note
 without losing them. Borrower and any other person who signs, guarantees or
 endorses this Note, to the extent allowed by law, waive presentment, demand
 for payment, and notice of dishonor. Upon any change in the terms of this
 Note, and unless otherwise expressly stated in writing, no party who signs
 this Note, whether as maker, guarantor, accommodation maker or endorser,
 shall be released from liability. All such parties agree that Lender may
 renew or extend (repeatedly and for any length of time) this loan or release
 any party or guarantor or collateral; or impair, fail to realize upon or
 perfect Lender’s security interest in the collateral; and take any other
 action deemed necessary by Lender without the consent of or notice to anyone.
 All such parties also agree that Lender may modify this loan without the
 consent of or notice to anyone other than the party with whom the
 modification is made. The obligations under this Note are joint and several.

 
	
  

 	
  

 
	
  

 	
 PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD
 ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
 PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE.

 
	
  

 	
  

 
	
  

 	
 BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
 PROMISSORY NOTE AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.

 

	
  

 	
  

 	
  

 	
  

 
	
 BORROWER:

 
	
  

 
	
 FLEXSTEEL
 INDUSTRIES, INC.

 
	
  

 
	
 By: 

 	
  

 	
 /s/ Timothy E. Hall

 	
  

 
	
 Timothy E. Hall,
 Senior V. P., CFO, Treasurer and

 
	
 Secretary of
 Flexsteel Industries, Inc.

 

	
  

 	
  

 	
  

 	
  

 
	
 LENDER:

 
	
  

 
	
 AMERICAN TRUST
 & SAVINGS BANK

 
	
  

 
	
 X 

 	
  

 	
 /s/ Daniel E.
 Walsh

 	
  

 
	
 Daniel E. Walsh,
 Senior Vice President

 

LASER PRO Lending, Ver. 14.1.0.009   Copr.
Harland Financial Solutions, Inc. 1997, 2014.   All Rights Reserved.   - IA
p:\CFI\LPL\D20.FC   TR-3233   PR-9 (M)Exhibit 10.40 - 2013

Exhibit 10.40

SECOND AMENDMENT TO THE
EQUITY RESIDENTIAL SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The undersigned, does hereby approve, for and on behalf of Equity Residential (the "Company"), the following amendments to the Equity Residential Supplemental Executive Retirement Plan (the “SERP”):
Premises

a.    The Company maintains the SERP.

b.    Section 10.1 of the SERP provides that the SERP may be amended in the sole discretion of the Company.

c.    The Company wishes to amend the SERP to clarify the employees who are eligible for the SERP.

Amendment

Section 2.5 of the Equity Residential Supplemental Executive Retirement Plan is amended, effective December 1, 2013, to add the following at the end of the existing Section:
"Notwithstanding the foregoing, an employee shall not be considered an Eligible Employee if such employee is employed in a property level position or a corporate position below the management level."
The foregoing actions are taken with the understanding that such actions are consistent with the intentions of the Company.

	
		
	Date:   November 30th, 2013
	/s/ Catherine Carraway________  
Catherine Carraway, First Vice President 
HR Operations

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