Document:

exv10w5

Exhibit 10.5

FURNITURE BRANDS INTERNATIONAL, INC.

2008 INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

          Furniture Brands International, Inc., a Delaware corporation (the “Company”), hereby grants to
the individual named below as the “Participant,” Nonqualified Stock Options to purchase all or any
part of the number of shares of Common Stock of the Company, no par value per share (“Common
Stock”), set forth below. This grant is made on the Grant Date set forth below (the “Grant Date”)
and is being made pursuant to the Furniture Brands International, Inc. 2008 Incentive Plan. The
terms and conditions of the grant are set forth in this Agreement and in the Furniture Brands
International, Inc. 2008 Incentive Plan (the “Plan”).

Grant Date:                     , 20___

Name of Participant:                                         

Participant’s Social Security Number:                                         

Number of Options Granted:                     

Option Price per share:                     

          By signing this cover sheet, you agree to all of the terms and conditions described in this
Agreement and in the Plan, a copy of which is being provided with this Agreement. You acknowledge
that you have carefully reviewed the Plan and agree that the Plan will control in the event any
provision of this Agreement should appear to be inconsistent with the terms of the Plan.

PARTICIPANT:

	 	 	 	 	 
	 	 	 
	[Name]	 	 
	 
	 	 	 	 
	COMPANY:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

 

 

FURNITURE BRANDS INTERNATIONAL, INC.

2008 INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

	 	 	 
	Grant of Option

	 	This Agreement evidences the grant by the Company on the
Grant Date to the Participant, of an option to purchase, in
whole or in part, on the terms provided herein and in the
Plan, [___] shares (the “Option”) of Common Stock at
[$___] per share (the “Option Price”). Unless earlier
terminated, this Option shall expire on [this date will be
seven years from the grant date] (the “Expiration Date”).
	 
	 	 
	 

	 	It is intended that the Option evidenced by this Agreement
shall not be an incentive stock option as defined in Section
422 of the Internal Revenue Code of 1986, as amended, and
any regulations promulgated thereunder (the “Code”). Except
as otherwise indicated by the context, the term
“Participant,” as used in this Option, shall be deemed to
include any person who acquires the right to exercise this
Option validly under its terms.
	 
	 	 
	Definitions

	 	“Cause,” “Change in Control,” “Disability,” “Fair Market
Value” and “Retirement” shall have the meaning assigned to
such terms in Appendix A to this Agreement.
	 
	 	 
	Vesting

	 	This Option will vest [Insert Vesting Terms].
	 
	 	 
	Exercise of Option

	 	Each election to exercise this Option shall be in writing,
signed by the Participant, and received by the Company at
its principal office, accompanied by this Agreement, and
payment in full of the Option Price. A Participant may pay
the Option Price:
	 
	 	 
	 

	 	(i) in cash or by check, payable to the order of the Company;
	 
	 	 
	 

	 	(ii) if the Common Stock is registered under the Securities
and Exchange Act of 1934, as amended (the “Exchange Act”),
in Common Stock which, if acquired from the Company, has
been held for at least six months including by deemed or
constructive transfers of shares in lieu of actual transfer
and physical delivery of certificates; or
	 
	 	 
	 

	 	(iii) if the Common Stock is registered under the Exchange
Act, payment in full of the Option Price need not accompany
the written notice of exercise provided that the notice of
exercise directs that the certificate or certificates for
the shares of Common Stock for which the Option is exercised
be delivered to a licensed broker acceptable to the Company
as the agent for the individual exercising the Option and,
at the time such certificate or certificates are delivered,
the broker tenders to the Company cash (or cash equivalents
acceptable to the Company) equal to the Option Price for the
shares of Common Stock purchased pursuant to the exercise of
the Option plus the amount (if any) of required withholding
taxes. Executive Officers and Directors of the

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	 	Company will
not be permitted to use the cashless method of exercise
described in this paragraph without the express prior
consent of the Company.
	 
	 	 
	 

	 	The date of exercise shall be the date the written notice
and the Option Price actually are received by the Company or
its designee, regardless of the means of delivery.
	 
	 	 
	 

	 	The right of exercise shall be cumulative so that to the
extent the Option is not exercised in any period to the
maximum extent permissible it shall continue to be
exercisable, in whole or in part, with respect to all shares
underlying the Option which have vested until the earlier of
the Expiration Date or the termination of this Option under
this Agreement or the Plan.
	 
	 	 
	Change in Control

	 	Notwithstanding the vesting set forth above, upon the
occurrence of a Change in Control of the Company, all of the
Shares that (but for the application of this clause) are not
vested at the time of the occurrence of such Change in
Control event shall vest and shall become immediately
exercisable.
	 
	 	 
	Transferability

	 	This Option may not be sold, assigned, transferred, pledged
or otherwise encumbered by the Participant, either
voluntarily or by operation of law, except by will or the
laws of descent and distribution, and, during the lifetime
of the Participant, this Option shall be exercisable only by
the Participant.
	 
	 	 
	Termination of
Employment

	 	(a)  In the event that the Participant’s employment
terminates due to the Participant’s death, Disability or
Retirement, the unvested portion of the Option will
terminate and be forfeited, and the vested portion may be
exercised until the earlier of (i) the third anniversary of
the Participant’s death, Disability or Retirement, and
(ii) the Expiration Date.

	 
	 	 
	 

	 	(b)  In the event that the Company terminates the
Participant’s employment for Cause at any time, this Option
will automatically terminate and all unexercised vested and
unvested shares underlying the Option will be forfeited and
will not be exercisable as of the date of such termination.

	 
	 	 
	 

	 	(c)  If the Participant’s employment with the Company is
terminated for any other reason, this Option will
automatically terminate, any unvested shares underlying the
Option will be forfeited and any vested shares may be
exercised no later than the earlier of (i) the 90 days after
the date of termination of the Participant’s employment, and
(ii) the Expiration Date.

	 
	 	 
	Right of Recapture

	 	If, at any time, within one year after the Participant
exercises the Option (the “Realization Event”), the
Committee (as defined in the Plan) determines in its
discretion that the Company has been materially harmed by
the Participant, whether such harm (a) results in the
Participant’s termination or deemed termination of
employment for

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	 	Cause or (b) results from any activity of the
Participant determined by the Committee to be in competition
with any activity of the Company, or otherwise prejudicial,
contrary or harmful to the interests of the Company
(including, but not limited to, accepting employment with or
serving as a consultant, adviser or in any other capacity to
an entity that is in competition with or acting against the
interests of the Company), then any gain realized by the
Participant from the exercise of the Options pursuant to
this Agreement shall be paid by the Participant to the
Company upon notice from the Company. Such gain shall be
determined as of the date of the Realization Event, without
regard to any subsequent change in the Fair Market Value of
shares of the Company’s Common Stock. To the extent allowed
by applicable law, the Company shall have the right to
offset such gain against any amounts otherwise owed to the
Participant by the Company (whether as wages, vacation pay,
or pursuant to any benefit plan or other compensatory
arrangement).
	 
	 	 
	No Rights as 

Stockholder

	 	The Participant does not have any of the rights of a
stockholder with respect to shares of Common Stock covered
by the Option until shares of Common Stock are issued to him
or her upon exercise of the Option.
	 
	 	 
	Withholding

	 	No shares will be issued pursuant to the exercise of this
Option unless and until the Participant pays to the Company,
or makes provision satisfactory to the Company for payment
of, any federal, state or local withholding taxes required
by law to be withheld in respect of this option.
	 
	 	 
	Retention Rights

	 	This Agreement does not give the Participant the right to be
retained or employed by the Company or any subsidiaries in
any capacity.
	 
	 	 
	Adjustments

	 	In the event of any stock dividend, stock split, combination
or exchange of shares, reorganization, partial or complete
liquidation or other distribution of assets (other than a
normal cash dividend), recapitalization or other change in
the capital structure of the Company, or other corporate
transaction, the number of shares covered by this Option
will be adjusted by the Committee in accordance with the
terms of the Plan.
	 
	 	 
	 

	 	Notwithstanding the foregoing, any adjustment, substitution
or assumption pursuant to this section shall be made in such
a manner as to ensure that the Options will not be subject
to Section 409A of the Code.
	 
	 	 
	Beneficiaries

	 	The Participant may designate one or more beneficiaries to
receive all or part of this Option in case of the
Participant’s death, and the Participant may change or
revoke such designation at any time. In the event of the
Participant’s death, any portion of this Option that is
subject to such a designation will be distributed to such
beneficiary or beneficiaries in accordance with this
Agreement. Any other portion of this Option not designated
by the Participant shall be distributable to the
Participant’s estate. If there is any question as to the
legal right of any

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	 	beneficiary to receive a distribution
hereunder, the Option shares in question may be purchased by
and distributed to the Participant’s estate, in which event
the Company shall have no further liability to anyone with
respect to such Option.
	 
	 	 
	Amendments

	 	This Agreement may be amended in writing by the Company and
the Participant, provided that the Company may amend this
Agreement unilaterally if the amendment does not adversely
affect or impair the rights of the Participant. The Company
shall give notice to the Participant of any such unilateral
amendment either before or promptly after the effective date
of such amendment.
	 
	 	 
	Applicable Law

	 	This Agreement will be interpreted and enforced under the
laws of the State of Delaware, other than any conflicts or
choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the
substantive law of another jurisdiction.
	 
	 	 
	Consent to Electronic
Delivery

	 	The Company may choose to deliver certain statutory
materials relating to the Plan in electronic form. By
accepting this grant the Participant agrees that the Company
may deliver the Plan prospectus and the Company’s annual
report to the Participant in an electronic format. If at any
time the Participant would prefer to receive paper copies of
these documents, the Company would be pleased to provide
copies. Please contact the Plan Administrator to request
paper copies of these documents.
	 
	 	 
	The Plan

	 	The text of the Plan is incorporated in this Agreement by
reference. This Agreement and the Plan constitute the entire
understanding between the Participant and the Company
regarding this grant of Options. Any prior agreements,
commitments or negotiations concerning this grant are
superseded. The Plan will control in the event any provision
of this Agreement should appear to be inconsistent with the
terms of the Plan.

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions
described above and in the Plan.

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Appendix A

1. For the purpose of this Agreement, “Cause” shall mean (a) the Participant’s conviction of any
crime (whether or not involving the Company) constituting a felony in the jurisdiction involved;
(b) the Participant’s conduct related to the Participant’s employment for which either criminal or
civil penalties against the Participant or the Company may be sought; (c) material violation of the
Company’s policies, including the disclosure or misuse of confidential information, or those set
forth in Company manuals or statements of policy; or (d) serious neglect or misconduct in the
performance of the Participant’s duties for the Company or willful or repeated failure or refusal
to perform such duties. Any rights the Company may have in respect of the events giving rise to
Cause shall be in addition to the rights the Company may have under any other agreement with the
Participant or at law or in equity. Any determination of whether the Participant’s employment is
(or is deemed to have been) terminated for Cause shall be made by the Committee in its sole
discretion, which determination shall be final and binding on all parties. If, subsequent to the
Participant’s termination of employment (whether voluntary or involuntary) without Cause, it is
discovered that the Participant’s employment could have been terminated for Cause, the
Participant’s employment shall be deemed to have been terminated for Cause. The Participant’s
termination of employment for Cause shall be effective as of the date of the occurrence of the
event giving rise to Cause, regardless of when the determination of Cause is made.

2. For the purpose of this Agreement, “Change in Control” means the first to occur of any of the
following events:

	 	i.	 	any person (as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner, directly
or indirectly, of securities of the Company (not including the securities beneficially
owned by such person or any securities acquired directly from the Company or its
affiliates, other than in connection with the acquisition by the Company or its affiliates
of a business) representing 35% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company’s then outstanding
securities; or
	 
	 	ii.	 	the majority of the members of the Board is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the members of
the Board prior to the date of the appointment or election; or
	 
	 	iii.	 	the consummation of a merger or consolidation of the Company with any other entity,
other than (a) a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of the
Company, 60% or more of the combined voting power of the voting securities of the Company
or such surviving entity or any parent thereof outstanding immediately after such merger
or consolidation, or (b) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person is or becomes
the beneficial owner, directly or indirectly, of securities of the Company (not including
the securities beneficially owned by such person or any securities acquired directly from
the Company or its affiliates, other than in connection with the acquisition by the
Company or its affiliates of a business) representing 50% or more of either the then
outstanding shares

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	 	 	 	of common stock of the Company or the combined voting power of the Company’s then outstanding
securities; or

	 	iv.	 	the stockholders of the Company approve a plan of complete liquidation or dissolution
of the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by the Company
of all or substantially all of the Company’s assets to an entity, 60% or more of the
combined voting power of the voting securities of which is owned by persons in
substantially the same proportions as their ownership of the Company immediately prior to
such sale.

          Notwithstanding the foregoing, no “Change in Control” shall be deemed to have occurred if
there is consummated any transaction or series of integrated transactions immediately following
which the record holders of the common stock of the Company immediately prior to such transaction
or series of transactions continue to have substantially the same proportionate ownership in an
entity which owns all or substantially all of the assets of the Company immediately following such
transaction or series of transactions.

          For purposes of this definition, “beneficial ownership” shall be determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

3. For the purpose of this Agreement, “Disability” shall mean the Participant is permanently and
totally disabled and unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of twelve months. The
existence of a Disability shall be determined by the Committee in its sole discretion.

4. For purposes of this Agreement, “Fair Market Value” shall mean the closing price for the shares
of the Company’s common stock, no par value, reported on the New York Stock Exchange for the
relevant date, or if there were no sales on such date, the closing price for the nearest following
date.

5. For the purpose of this Agreement, “Retirement” shall mean the Participant’s termination of
employment on or after attaining age 55 and completing 5 years of service with the Company.

7exv10w6

Exhibit 10.6

FURNITURE BRANDS INTERNATIONAL, INC.

2008 INCENTIVE PLAN

PERFORMANCE BASED

RESTRICTED STOCK AWARD AGREEMENT

     Furniture Brands International, Inc., a Delaware corporation (the “Company”), hereby grants
stock relating to shares of its common stock, no par value (the “Common Stock”), to the individual
named below as the Grantee. The terms and conditions of the grant are set forth in this Agreement
and in the Furniture Brands International, Inc. 2008 Incentive Plan (the “Plan”).

Grant
Date:                     , 20___ (the “Grant Date”)

Name of Grantee:                                         

Grantee’s Social Security Number:                                         

Number of Shares of Stock Covered by Grant:                                         

     By signing this cover sheet, you agree to all of the terms and conditions described in this
Agreement and in the Plan, a copy of which is being provided with this Agreement. You acknowledge
that you have carefully reviewed the Plan and agree that the Plan will control in the event any
provision of this Agreement should appear to be inconsistent with the terms of the Plan.

	 	 	 	 	 
	GRANTEE:	 	 
	 
	 	 	 	 
	   	 	 
	[Name]
	 	 	 	 
	 
	 	 	 	 
	COMPANY:	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Title:
	 	 	 	 
	 

	 	 

	 	 

 

 

FURNITURE BRANDS INTERNATIONAL, INC.

2008 INCENTIVE PLAN

PERFORMANCE BASED RESTRICTED STOCK AWARD AGREEMENT

	 	 	 
	Restricted Stock

	 	This grant is an award of Common
Stock in the number of shares set
forth on the cover sheet (the
“Shares”), subject to the vesting
conditions described below
(“Restricted Stock”). To the extent
not yet vested, your Restricted
Stock may not be transferred,
assigned, pledged or hypothecated,
whether by operation of law or
otherwise, nor may the Restricted
Stock be made subject to execution,
attachment or similar process.
	 
	 	 
	Definitions

	 	“Cause,” “Change in Control,”
“Disability,” “Retirement,” and
“Service” shall have the meaning
assigned to such terms in Appendix A
to this Agreement.
	 
	 	 
	Performance Condition and Vesting

	 	The grant of Shares of Restricted
Stock is contingent on the Company’s
achievement of [Insert Performance
Condition] (the “Performance
Condition(s)”) for the period
[Insert Performance Period] (the
“Performance Period”).
	 
	 	 
	 

	 	If the Performance Condition(s) are
satisfied, then the Shares of
Restricted Stock shall vest as
follows: [Insert Vesting].
	 
	 	 
	 

	 	If the Performance Condition(s) are
not satisfied, then the Restricted
Stock shall be forfeited to the
Company.
	 
	 	 
	Forfeiture of Stock

	 	In the event that your Service with
the Company terminates for any
reason other than your death,
Disability or Retirement, you will
forfeit to the Company all unvested
Shares subject to this grant. Any
Shares of Restricted Stock that are
forfeited shall be returned to the
Company and cancelled, and all of
your rights to those shares will
terminate, without any payment of
consideration by the Company. 

In the event that your Service with
the Company terminates due to your
death, Disability or Retirement, any
Shares of Restricted Stock will vest
pro-rata if the Performance
Conditions are satisfied and will be
distributed following achievement of
the Performance Conditions. The pro
rata portion of the Restricted Stock
that will become fully vested will
be determined by multiplying the
Shares of Restricted Stock that
would have become vested (but for
the termination) by a fraction, the
numerator of which shall be the
number of full months that have
elapsed in the Performance Period
preceding the termination of Service
and the denominator of which shall
be the number of full months in the
Performance Period.
	 
	 	 
	Ownership of Restricted Stock

	 	The Company will issue Shares of
Restricted Stock in your name in the
form of an entry into a share memo
account with the Company’s stock
transfer agent on the Grant Date.
The account will show that the
Shares are subject to the
restrictions described herein.
Subject to the terms and

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	 	conditions
described herein, you shall be
entitled to all the rights of
beneficial ownership of the Shares
while they are held in the share
memo account, including the right to
vote the Shares and to receive
dividends, subject to the
requirements set forth herein, if,
as and when declared by the
Company’s Board of Directors.
	 
	 	 
	 

	 	Any distributions you receive as a
result of any stock split, stock
dividend, combination of shares or
other similar transaction shall be
deemed to be a part of the
Restricted Stock and subject to the
same conditions and restrictions
applicable thereto. The Company may
in its sole discretion require any
dividends paid on the Restricted
Stock to be reinvested in shares of
Stock, which the Company may in its
sole discretion deem to be a part of
the shares of Restricted Stock and
subject to the same conditions and
restrictions applicable thereto.
	 
	 	 
	 

	 	Until the restrictions have lapsed
or the Shares are forfeited and
cancelled, the Shares shall be held
in the share memo account and you
shall not be entitled to receive
certificates representing the
Shares. After the Restrictions have
lapsed with respect to Shares, you
(or, in the case of your death or
Disability, your legal
representatives, legatees,
distributees or guardian) shall have
the right to have such Shares
certificated and transferred in
accordance with the transfer agent’s
procedures generally applicable to
all stockholders.
	 
	 	 
	 

	 	In order to facilitate the transfer
back to the Company of any Shares of
Restricted Stock that are forfeited
and cancelled as described herein,
you must sign and deliver the stock
power, attached hereto as Exhibit A,
for the Shares to the Company’s
Compensation Director. Upon the
forfeiture of Shares, such Shares of
Restricted Stock will be transferred
back to the Company pursuant to such
stock power and cancelled.
	 
	 	 
	Change in Control

	 	Notwithstanding anything herein to
the contrary, upon the occurrence of
a Change in Control, all Shares of
Restricted Stock that (but for the
application of this clause) have not
vested at the time of the occurrence
of such Change in Control event
shall vest pro rata based on the
actual achievement of the
Performance Conditions to the date
of the Change in Control. The pro
rata portion of the Restricted Stock
that will become fully vested will
be determined by multiplying the
Shares of Restricted Stock that
would have become vested (but for
the Change in Control) based on the
actual achievement of the
Performance Conditions to the date
of the Change in Control by a
fraction, the numerator of which
shall be the number of full months
that have elapsed in the Performance
Period preceding the Change in
Control and the denominator of which
shall be the number of full months
in the Performance Period.
	 
	 	 
	Withholding

	 	You must pay any taxes that are
required to be withheld by the
Company. You may pay such amounts in
cash or make other arrangements
satisfactory to the Company for the
payment of such amounts. You agree
that if you do not pay, or make
arrangements for the payment of,
such amounts, the Company, to the
fullest extent permitted by law,
shall have the right to deduct such
amounts from any

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	 	payments of any
kind otherwise due to you and shall
have the right to withhold from
Shares of Restricted Stock for which
restrictions have lapsed the number
of Shares having an aggregate market
value at that time equal to the
amount you owe.
	 
	 	 
	Section 83(b)
Election

	 	Under Section 83 of the Internal
Revenue Code of 1986, as amended
(the “Code”), the difference between
the purchase price paid for the
Shares of Restricted Stock and their
fair market value on the date any
forfeiture restrictions applicable
to such Shares lapse will be
reportable as ordinary income at
that time. For this purpose,
“forfeiture restrictions” include
the forfeiture of unvested Shares of
Restricted Stock that is described
above. You may elect to be taxed at
the time the Shares are acquired,
rather than when such Shares cease
to be subject to such forfeiture
restrictions, by filing an election
under Section 83(b) of the Code with
the Internal Revenue Service within
thirty (30) days after the Grant
Date. You will have to make a tax
payment to the extent the purchase
price is less than the fair market
value of the Shares on the Grant
Date. No tax payment will have to be
made to the extent the purchase
price is at least equal to the fair
market value of the Shares on the
Grant Date. The form for making this
election is attached as Exhibit B
hereto. Failure to make this filing
within the thirty (30) day period
will result in the recognition of
ordinary income by you (in the event
the fair market value of the shares
as of the vesting date exceeds the
purchase price) as the forfeiture
restrictions lapse.
	 
	 	 
	 

	 	YOU ACKNOWLEDGE THAT IT IS YOUR SOLE
RESPONSIBILITY, AND NOT THE
COMPANY’S, TO FILE A TIMELY ELECTION
UNDER SECTION 83(b), EVEN IF YOU
REQUEST THE COMPANY OR ITS
REPRESENTATIVES TO MAKE THIS FILING
ON YOUR BEHALF. YOU ARE RELYING
SOLELY ON YOUR OWN ADVISORS WITH
RESPECT TO THE DECISION AS TO
WHETHER OR NOT TO FILE ANY 83(b)
ELECTION.
	 
	 	 
	Right of Recapture

	 	If, at any time, within one year
after the date that the Shares vest
(the “Realization Event”), the
Committee (as defined in the Plan)
determines in its discretion that
the Company has been materially
harmed by you, whether such harm
(a) results in your termination or
deemed termination of Service for
Cause or (b) results from any
activity of yours determined by the
Committee to be in competition with
any activity of the Company, or
otherwise prejudicial, contrary or
harmful to the interests of the
Company (including, but not limited
to, accepting employment with or
serving as a consultant, adviser or
in any other capacity to an entity
that is in competition with or
acting against the interests of the
Company), then any gain realized by
you from the Shares of Restricted
Stock shall be paid by you to the
Company upon notice from the
Company. Such gain shall be
determined as of the date of the
Realization Event, without regard to
any subsequent change in the Fair
Market Value of shares of the
Company’s Common Stock. To the
extent allowed by applicable law,
the Company shall have the right to
offset such gain against any amounts
otherwise owed to you by the

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	 	Company
(whether as wages, vacation pay, or
pursuant to any benefit plan or
other compensatory arrangement).
	 
	 	 
	Retention Rights

	 	This Agreement does not give you the
right to be retained by the Company
(or any subsidiaries) in any
capacity. The Company (and any
subsidiaries) reserves the right to
terminate your Service at any time
and for any reason.
	 
	 	 
	Adjustments

	 	In the event of any stock dividend,
stock split, combination or exchange
of shares, reorganization, partial
or complete liquidation or other
distribution of assets (other than a
normal cash dividend),
recapitalization or other change in
the capital structure of the
Company, or other corporate
transaction, the number of Shares of
Restricted Stock covered by this
grant will be adjusted by the
Committee in accordance with the
terms of the Plan.
	 
	 	 
	Applicable Law

	 	This Agreement will be interpreted
and enforced under the laws of the
State of Delaware, other than any
conflicts or choice of law rule or
principle that might otherwise refer
construction or interpretation of
this Agreement to the substantive
law of another jurisdiction.
	 
	 	 
	Consent to Electronic Delivery

	 	The Company may choose to deliver
certain statutory materials relating
to the Plan in electronic form. By
accepting this grant you agree that
the Company may deliver the Plan
prospectus and the Company’s annual
report to you in an electronic
format. If at any time you would
prefer to receive paper copies of
these documents, as you are entitled
to receive, the Company would be
pleased to provide copies. Please
contact the Plan Administrator to
request paper copies of these
documents.
	 
	 	 
	Amendments

	 	No amendment to this Agreement may
impair your rights under this
Agreement without your consent.
	 
	 	 
	The Plan

	 	The text of the Plan is incorporated
in this Agreement by reference. This
Agreement and the Plan constitute
the entire understanding between you
and the Company regarding this grant
of Restricted Stock. Any prior
agreements, commitments or
negotiations concerning this grant
are superseded. The Plan will
control in the event any provision
of this Agreement should appear to
be inconsistent with the terms of
the Plan.

By signing the cover sheet of this Agreement, you agree to all of the terms and conditions
described above and in the Plan.

5

 

Appendix A

1. For the purpose of this Agreement, “Cause” shall mean (a) your conviction of any crime (whether
or not involving the Company) constituting a felony in the jurisdiction involved; (b) your conduct
related to your Service for which either criminal or civil penalties against you or the Company may
be sought; (c) material violation of the Company’s policies, including the disclosure or misuse of
confidential information, or those set forth in Company manuals or statements of policy; or
(d) serious neglect or misconduct in the performance of your duties for the Company or willful or
repeated failure or refusal to perform such duties. Any rights the Company may have in respect of
the events giving rise to Cause shall be in addition to the rights the Company may have under any
other agreement with you or at law or in equity. Any determination of whether your Service is (or
is deemed to have been) terminated for Cause shall be made by the Committee in its sole discretion,
which determination shall be final and binding on all parties. If, subsequent to your termination
of Service (whether voluntary or involuntary) without Cause, it is discovered that your Service
could have been terminated for Cause, your Service shall be deemed to have been terminated for
Cause. Your termination of Service for Cause shall be effective as of the date of the occurrence
of the event giving rise to Cause, regardless of when the determination of Cause is made.

2. For the purpose of this Agreement, “Change in Control” means the first to occur of any of the
following events:

	 	i.	 	any person (as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner, directly
or indirectly, of securities of the Company (not including the securities beneficially
owned by such person or any securities acquired directly from the Company or its
affiliates, other than in connection with the acquisition by the Company or its affiliates
of a business) representing 35% or more of either the then outstanding shares of common
stock of the Company or the combined voting power of the Company’s then outstanding
securities; or
	 
	 	ii.	 	the majority of the members of the Board is replaced during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the members of
the Board prior to the date of the appointment or election; or
	 
	 	iii.	 	the consummation of a merger or consolidation of the Company with any other entity,
other than (a) a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination with the ownership of any
trustee or other fiduciary holding securities under an employee benefit plan of the
Company, 60% or more of the combined voting power of the voting securities of the Company
or such surviving entity or any parent thereof outstanding immediately after such merger
or consolidation, or (b) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no person is or becomes
the beneficial owner, directly or indirectly, of securities of the Company (not including
the securities beneficially owned by such person or any securities acquired directly from
the Company or its affiliates, other than in connection with the acquisition by the
Company or its affiliates of a business) representing 50% or more of either the then
outstanding shares of common stock of the Company or the combined voting power of the
Company’s then outstanding securities; or

6

 

	 	iv.	 	the stockholders of the Company approve a plan of complete liquidation or dissolution
of the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets, other than a sale or disposition by the Company
of all or substantially all of the Company’s assets to an entity, 60% or more of the
combined voting power of the voting securities of which is owned by persons in
substantially the same proportions as their ownership of the Company immediately prior to
such sale.

          Notwithstanding the foregoing, no “Change in Control” shall be deemed to have occurred if
there is consummated any transaction or series of integrated transactions immediately following
which the record holders of the common stock of the Company immediately prior to such transaction
or series of transactions continue to have substantially the same proportionate ownership in an
entity which owns all or substantially all of the assets of the Company immediately following such
transaction or series of transactions.

          For purposes of this definition, “beneficial ownership” shall be determined in accordance with
Rule 13d-3 under the Securities Exchange Act of 1934, as amended.

4. For the purpose of this Agreement, “Disability” shall mean you are permanently and totally
disabled and unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of twelve months. The existence of a
Disability shall be determined by the Committee in its sole discretion.

5. For the purpose of this Agreement, “Retirement” shall mean your termination of Service on or
after attaining age 55 and completing 5 years of service with the Company.

6. For the purpose of this Agreement, “Service” shall mean service as an employee, officer or
director of the Company or any subsidiary of the Company.

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EXHIBIT A

STOCK POWER

     FOR VALUE RECEIVED,                                          sells, assigns and transfers to Furniture Brands
International, Inc., a Delaware corporation (the “Company”),                     (                     ___) shares of
common stock of the Company represented by Certificate No. and does hereby irrevocable
constitute and appoint                     , Attorney to transfer the said stock on the books of the
Company with full power of substitution in the premises.

Dated:                     , 20___

	 	 	 
	 

	 	 
	 

	 	Print Name
	 
	 	 
	 

	 	 
	 

	 	Signature

Spouse Consent (if applicable)

                         (spouse) indicates by the execution of this Assignment his or her consent to be bound by
the terms herein as to his or her interests, whether as community property or otherwise, if any, in
the shares of common stock of the Company.

	 	 	 
	 

	 	 
	 

	 	Signature

INSTRUCTIONS: PLEASE DO NOT FILL IN ANY BLANKS OTHER THAN THE SIGNATURE LINE. THE PURPOSE OF THIS
ASSIGNMENT IS TO ENABLE THE COMPANY TO FACILITATE THE TRANSFER BACK TO THE COMPANY OF ANY SHARES OF
RESTRICTED STOCK THAT ARE FORFEITED AND CANCELLED AS SET FORTH IN THE AGREEMENT WITHOUT REQUIRING
ADDITIONAL SIGNATURES ON YOUR PART.

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EXHIBIT B

ELECTION UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code
with respect to the property described below and supplies the following information in accordance
with the regulations promulgated thereunder:

	1.	 	The name, address and social security number of the undersigned:

	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	Social Security No.:	 	 
	 	 	 	 	 
	 	 

2. Description of property with respect to which the election is being made:                      shares
of common stock, no par value per  share, Furniture Brands International, Inc., a Delaware
corporation, (the “Company”).

3. The date on which the property was transferred is                     , 20     .

4. The taxable year to which this election relates is calendar year 20___.

5. Nature of restrictions to which the property is subject: The shares of stock are subject to the
provisions of a Restricted Stock Agreement between the undersigned and the Company. The shares of
stock are subject to forfeiture under the terms of the Agreement.

6. The fair market value of the property at the time of transfer (determined without regard to any
lapse restriction) was $                  per share, for a total of $                     .

7. The amount paid by taxpayer for the property was $ 0.

8. A copy of this statement has been furnished to the Company.

     Dated:                     , 20___.

	 	 	 
	 

	 	 
	 

	 	Print Name
	 
	 	 
	 

	 	 
	 

	 	Signature

PROCEDURES FOR MAKING ELECTION 
UNDER INTERNAL REVENUE CODE SECTION 83(b):

The following procedures must be followed with respect to this form for making an election under
Internal Revenue Code section 83(b) in order for the election to be effective:
1. You must file one copy of the completed election form with the IRS Service Center where you file
your federal income tax returns within 30 days after the Grant Date of your Restricted Stock.
2. At the same time you file the election form with the IRS, you must also give a copy of the
election form to the Secretary of the Company.

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3. You must file another copy of the election form with your federal income tax return (generally,
Form 1040) for the taxable year in which the stock is transferred to you.

10

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