Document:

citi2018firstamendmentto

                                                                   EXECUTED                   FIRST AMENDMENT  TO CREDIT AGREEMENT         This  FIRST  AMENDMENT  TO  CREDIT  AGREEMENT,  dated  as  of  December  19,  2018 (this “Amendment”), is made by and among GP COMMERCIAL CB SL LLC, a Delaware  limited  liability  company  (the  “Borrower”),  GP COMMERCIAL CB SL  HOLDINGS  LLC, a  Delaware limited liability company (the “Parent Guarantor”), GRANITE POINT MORTGAGE  TRUST  INC.,  a  Maryland  corporation  (the  “REIT”),  GRANITE  POINT  OPERATING  COMPANY LLC, a Delaware limited liability company (“GPOC LLC”), TH COMMERCIAL  HOLDINGS LLC, a Delaware limited liability company (the “HoldCo” and, together with the  Parent Guarantor, the REIT and GPOC LLC, the “Guarantors”), the banks, financial institutions  and other institutional lenders listed on the signature pages hereof as the lenders (the “Lenders”),  CITIBANK,  N.A.  (“Citibank”),  as  administrative  agent  (the  “Administrative  Agent”)  for  the  Lenders,  and  CITIGROUP  GLOBAL  MARKETS  INC.  (“CGMI”),  as  sole  lead  arranger  and  sole lead book running manager (the “Arranger”).                                     RECITALS         WHEREAS,  the  parties  hereto  entered  into  that  certain  Credit  Agreement,  dated  as  of  April 13, 2018 (as amended, supplemented or otherwise modified prior to the date hereof, the  “Credit Agreement”);         WHEREAS, the parties hereto wish to make certain changes to the Credit Agreement as  further described herein.         NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  mutual  agreements  contained herein and in the Credit Agreement, the parties hereto agree as follows:               SECTION 1.  Definitions.  All capitalized terms not otherwise defined herein are        used as defined in the Credit Agreement.               SECTION 2.  Amendments  to  Credit  Agreement.   Effective  as  of  the  Effective        Date (as defined below), the Credit Agreement is hereby amended as follows:         2.1.  The  following  new  definitions  are  hereby  added  to  Section  1.1  of  the  Credit  Agreement in their appropriate alphabetical order:                ““First Amendment Effective Date” means December 19, 2018.”.               ““Temporary Increase Termination Date” means the earliest of: (a) March 29,              2019 and (b) the date of termination  in whole of  the  Commitments  pursuant  to              Section 2.05 or 6.01.”.         2.2.  Section  2.06(b)(iv)  of  the  Credit  Agreement  is  hereby  amended  by  deleting  “[Reserved.]” and adding the following sentence:         “The unpaid principal amount of the Obligations in excess of $75,000,000 outstanding on        the Temporary Increase Termination Date, together with all accrued but unpaid interest        thereon, shall be due and payable on the Temporary Increase Termination Date.”  

 

      2.3.  Schedule I to the Credit Agreement is hereby deleted in its entirety and replaced  with Schedule I attached hereto.               SECTION 3.  Conditions Precedent.  This Amendment shall become effective on        the date (the “Effective Date”) when the Administrative Agent shall have received (each        in form and substance reasonably satisfactory to the Administrative Agent):                     (i)   Counterparts of this Amendment duly executed by the Borrower,                    the Guarantors, each Lender party hereto and the Administrative Agent;                     (ii)  the Amended and Restated Note duly completed and executed by                    the Borrower and payable to the Lender;                     (iii) UCC,  judgment,  tax,  litigation  and  bankruptcy  searches  with                    respect to each applicable Loan Party, and, in the case of UCC searches,                    listing all effective financing statements filed in the jurisdictions specified                    by the Administrative Agent that name any Loan Party as debtor, together                    with copies of such financing statements, and such searches shall reveal no                    Liens on any of the assets of the Loan Parties;                     (iv)  (x) a certificate of a Responsible Officer of each Loan Party, dated                    the Effective Date, with appropriate insertions and attachments (including                    organizational authorizations, incumbency certifications, the certificate of                    incorporation or other similar organizational document of each Loan Party                    certified  by  the  relevant  authority  of  the  jurisdiction  of  organization  of                    such Loan Party and bylaws or other similar organizational document of                    each Loan Party (or, in the case of the certificate of incorporation, bylaws                    or similar organizational document, a certification from such Responsible                    Officer that such documents have not changed since previously delivered                    to the Administrative Agent)) and (y) a good standing certificate for each                    Loan Party from its jurisdiction of organization;                     (v)   favorable written opinions of counsel from (x) Sidley Austin LLP,                    (y) Holland & Knight and (z) Stinson Leonard Street, or such other special                    counsel for the Loan Parties, each in form and substance satisfactory to the                    Administrative Agent in its reasonable discretion, dated as of the Effective                    Date;                      (vi)  a  certificate  substantially  in  the  form  of  Exhibit K  of  the  Credit                    Agreement from the Chief Financial Officer (or other Responsible Officer                    performing similar functions) of the REIT certifying that the REIT and its                    Subsidiaries, considered as a whole, after giving effect to the transactions                    contemplated hereby to occur on the Effective Date, are Solvent;                      (vii) the Administrative Agent shall have received a certificate, dated as                    of  the  Effective  Date  and  signed  by  a  Responsible  Officer  of  the                    Borrower,  confirming  satisfaction  of  the  conditions  set  forth  in  Sections                    3.02(b) of the Credit Agreement;                                         2  

 

                  (viii) evidence  that  before  and  after  giving  effect  to  the  transactions                    contemplated by this Amendment, there shall have occurred no Material                    Adverse Change since December 31, 2017;                      (ix)  evidence  that  no  action,  investigation,  litigation  or  proceeding                    affecting any Loan Party or any of its Subsidiaries pending or threatened                    before  any  court,  governmental  agency  or  arbitrator  that  (i) could                    reasonably  be  expected  to  result  in  a  Material  Adverse  Effect  or                    (ii) purports  to  affect  the  legality,  validity  or  enforceability  of  this                    Amendment  or  any  Loan  Document  or  the  consummation  of  the                    transactions contemplated hereby or thereby;                      (x)   evidence  that  all  governmental  and  third  party  consents  and                    approvals necessary in connection with the transactions contemplated by                    this  Amendment  or  any  Loan  Documents  shall  have  been  obtained                    (without  the  imposition  of  any  conditions  that  are  not  acceptable  to  the                    Lenders) and evidence of such approvals shall have been provided to the                    Administrative Agent, and shall remain in effect, and no law or regulation                    shall  be  applicable  in  the  reasonable  judgment  of  the  Lenders  that                    restrains,  prevents  or  imposes  materially  adverse  conditions  upon  the                    transactions contemplated by this Amendment or the Loan Documents;                      (xi)  payment of all fees and other amounts due and payable on or prior                    to the Effective Date in accordance with the Credit Agreement, including,                    without  limitation,  (A)  payment  of  all  fees  set  forth  in  any  Fee  Letter,                    which  fees  are,  in  each  case,  fully-earned  as  of  the  date  hereof,  non-                   refundable  and  (except  as  otherwise  expressly  set  forth  therein)  not                    creditable  against  any  other  fees,  and  (B)  the  fees  and  disbursements                    invoiced through the Effective Date of the Administrative Agent’s special                    counsel, Fried, Frank, Harris, Shriver & Jacobson LLP; and                     (xii) such  other  approvals,  opinions,  certificates,  instruments  and                    documents as it may have reasonably requested in advance from the Loan                    Parties.               SECTION 4.  Reaffirmation.   Each  Loan  Party  hereby  acknowledges  and  confirms to Administrative Agent and each Lender that (a) the Collateral Documents and each  other  Loan  Document  to  which  it  is  a  party  are  each  hereby  reaffirmed  and  ratified  without  qualification and are and remain in full force and effect in accordance with their respective terms  and  (b)  the  Liens  and  security  interests  of  the  Administrative  Agent  under  the  Collateral  Documents and the other Loan Documents that secure all the Obligations, continue in full force  and effect  in accordance  with their respective  terms  and  have the same priority  as  before this  Amendment.                 SECTION 5.  Miscellaneous.                                          3  

 

      5.1.  Representations and Warranties.  Each Loan Party hereby represents and warrants  that (a) this Amendment has been duly executed and delivered by each Loan Party and general  partner or managing member (if any) of each Loan Party party thereto, (b) this Amendment is the  legal, valid and binding obligation of each Loan Party and general partner or managing member  (if any) of each Loan Party party thereto, enforceable against such Loan Party, general partner or  managing  member,  as  the  case  may  be,  in  accordance  with  its  terms  subject  to  bankruptcy,  insolvency,  and  other  limitations  on  creditors’  rights  generally  and  to  general  principles  of  equity, (c) the representations and warranties contained in the Credit Agreement and each other  Loan Document are correct and complete in all material respects on and as of such date, before  and after giving effect to this Amendment, (d) no Default or Event of Default has occurred and is  continuing under the Credit Agreement or any other Loan Document, or would result from this  Amendment, (e) the execution and delivery by each Loan Party and of each general partner or  managing member (if any) of each Loan Party of this Amendment, and the performance of its  obligations hereunder, and the consummation of the transactions contemplated hereby, are within  the  corporate,  limited  liability  company  or  partnership  powers  of  such  Loan  Party,  general  partner  or  managing  member,  have  been  duly  authorized  by  all  necessary  corporate,  limited  liability  company  or  partnership  action,  and  do  not  (i)  contravene  the  charter  or  bylaws,  operating  agreement,  partnership  agreement  or  other  governing document  of such  Loan Party,  general partner or managing member,  (ii)  violate  any  law,  rule, regulation (including,  without  limitation, Regulation X of the Board of Governors of the Federal Reserve System), order, writ,  judgment, injunction, decree, determination or award, (iii) conflict with or result in the breach of,  or  constitute  a  default  or  require  any  payment  to  be  made  under,  any  Material  Contract,  loan  agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting  any Loan Party or any of their properties, or any general partner or managing member of any  Loan Party or (iv) except for the Liens created under the Loan Documents, result in or require  the creation or imposition of any Lien upon or with respect to any of the properties of any Loan  Party, (f) no Loan Party is in violation of any such law, rule, regulation, order, writ, judgment,  injunction,  decree,  determination  or  award  or  in  breach  of  any  such  contract,  loan  agreement,  indenture, mortgage, deed of trust, lease or other instrument, the violation or breach of which  could  reasonably  be  expected  to  result  in  a  Material  Adverse  Effect,  (g)  no  authorization  or  approval  or  other  action  by,  and  no  notice  to  or  filing  with,  any  Governmental  Authority  or  regulatory  body  or  any  other  third  party  is  required  for  (i)  the  due  execution,  delivery,  recordation,  filing  or  performance  by  any  Loan  Party  or  any  general  partner  or  managing  member  of  any  Loan  Party  of  this  Amendment  or  for  the  consummation  of  the  transactions  contemplated  by  this  Amendment,  (ii)  the  grant  by  any  Loan  Party  (or  the  general  partner  or  managing  member  of  such  Loan  Party)  of  the  Liens  granted  by  it  pursuant  to  the  Collateral  Documents,  (iii)  the  perfection  or  maintenance  of  the  Liens  created  under  the  Collateral  Documents (including the first priority nature thereof) or (iv) the exercise by the Administrative  Agent  or  any  Lender  of  its  rights  under  this  Amendment  and  the  Loan  Documents  or  the  remedies  in  respect  of  the  Collateral  pursuant  to  the  Collateral  Documents,  except  for  authorizations,  approvals,  actions,  notices  and  filings  which  have  been  duly  obtained,  taken,  given or made and are in full force and effect, and (h) the he REIT is in compliance with the  covenants set forth in Section 5.04 of the Credit Agreement on a pro forma basis as of the last  day  of  the  most  recently  ended  fiscal  quarter  for  which  the  Borrower  is  required  to  have  delivered  quarterly  financials  pursuant  to  Section  5.03(c)  both  immediately  before  and  immediately after giving effect to the Amendment and the transactions contemplated thereby.                                          4  

 

      5.2.  References  to  Credit  Agreement.   Upon  the  effectiveness  of  this  Amendment,  each  reference  in  the  Credit  Agreement  to  “the  Credit  Agreement”,  “this  Agreement”,  “hereunder”,  “hereof”,  “herein”, or  words  of like  import  shall  mean  and  be  a reference to  the  Credit Agreement as amended hereby, and each reference to the Credit Agreement in any other  document,  instrument  or  agreement  executed  and/or  delivered  in  connection  with  the  Credit  Agreement shall mean and be a reference to the Credit Agreement as amended hereby.          5.3.  No  Effect  on  Credit  Agreement.   Except  as  specifically  amended  by  this  Amendment, the Credit Agreement and all other Loan Documents shall remain in full force and  effect and are hereby ratified and confirmed.         5.4.  No Waiver.  The execution, delivery and effectiveness of this Amendment shall  not operate as  a waiver  of any right, power or remedy of  any Agent or any  Lender under the  Credit  Agreement  or  any  other  document,  instrument  or  agreement  executed  in  connection  therewith, nor constitute a waiver of any provision contained therein, except as specifically set  forth herein.         5.5.  Governing  Law.   This  Amendment,  including  but  not  limited  to  the  validity,  interpretation,  construction,  breach,  enforcement  or  termination  hereof  and  thereof,  shall  be  governed by, and construed in accordance with, the law of the State of New York.         5.6.  Successors and Assigns.  This Amendment shall be binding upon and shall inure  to the benefit of the parties hereto and their respective successors and assigns.         5.7.  Headings.  Section headings in this Amendment are for convenience of reference  only and shall in no way affect the interpretation of this Amendment or any provision hereof.         5.8.  Counterparts.  This Amendment may be executed in any number of counterparts  and by different parties hereto in separate counterparts, each of which when so executed shall be  deemed  to  be  an  original  and  all  of  which  taken  together  shall  constitute  one  and  the  same  agreement.   Delivery  of  an  executed  counterpart  of  a  signature  page  to  this  Amendment  by  telecopier  or  by  email  with  a  pdf  or  similar  attachment  shall  be  effective  as  delivery  of  an  original executed counterpart of this Agreement.         5.9.  Severability.  In case one or more provisions of this Amendment shall be invalid,  illegal  or  unenforceable  in  any  respect  under  any  applicable  law,  the  validity,  legality  and  enforceability  of  the  remaining  provisions  contained  herein  or  therein  shall  not  be  affected  or  impaired thereby.                                      [Signatures Follow]                                          5  

 

 

 

 

 

 

 

                                SCHEDULE I               COMMITMENTS AND APPLICABLE LENDING OFFICES   Name of Initial    Commitments         Domestic Lending    Eurodollar Lending     Lender                                   Office               Office   Citibank, N.A.  On and after the    1615 Brett Road,      1615 Brett Road,                 Effective Date until OPS III,              OPS III                 January 2, 2019:     New Castle, DE 19720  New Castle, DE 19720                                      Attn: Vinoliya Basker Attn: Vinoliya Basker                                      Tel: 201-751-7571     Tel: 201-751-7571                 $105,000,000                  On and after January 2,                 2019 until but excluding                 the Temporary Increase                 Termination Date:                   $150,000,000                 On and after the                 Temporary Increase                 Termination Date:                  $75,000,000                       [Schedule I - First Amendment to Credit Agreement]Exhibit 10.1

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT
AGREEMENT (the “Agreement”) is entered into by and between Flexsteel Industries, Inc. (the “Company”),
and Jerald K. Dittmer (“Executive”) (the Company and Executive, collectively, the “Parties”
and each, a “Party”) as of the date of Executive’s signature below and is effective as of the Executive’s
start date with the Company, which is anticipated to be December 28, 2019, 12:01 a.m. (the “Effective Date”).

 

WHEREAS, Executive
wishes to be employed by the Company and the Company desires to employ Executive as its President and Chief Executive Officer (“CEO”)
on the terms and conditions set forth in this Agreement;

 

WHEREAS the Company
desires to employ Executive as its CEO according to the terms and conditions of this Agreement and the Company’s Board of
Directors (the “Board”) has authorized such offer of employment;

 

WHEREAS the Company’s
offer of employment made to Executive, and the Company’s offer of this Agreement and the consideration and benefits provided
herein, are contingent on Executive signing and accepting that certain Confidentiality and Noncompetition Agreement between Executive
and the Company (the “Confidentiality Agreement”), a copy of which is attached hereto as Exhibit A; and

 

WHEREAS, Executive
has executed, agreed to fulfill, and has delivered to the Company such executed, Confidentiality Agreement.

 

NOW, THEREFORE, in
consideration of and reliance on these recitals and premises, which are hereby incorporated, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and intending to be legally bound, the Parties agree as follows:

 

1.        Employment;
Employment Term. Upon the terms and conditions hereinafter set forth, the Company hereby agrees to retain the services
of Executive and Executive hereby accepts such employment and agrees to faithfully and diligently serve as directed by the Board,
and in accordance with this Agreement, commencing on the Effective Date and continuing until terminated pursuant to Section
5 of this Agreement (the “Employment Term”).

 

2.       Duties.

 

(a)       Services.
 During the Employment Term, Executive agrees to serve as CEO of the Company and shall render Executive’s duties as CEO
in a manner that is consistent with Executive’s position within the Company and as assigned by the Board, and/or at the option
of the Board. Additionally, as soon as practicable after the Effective Date, the Board will elect Executive to the Board of Directors
and Executive will thereafter stand for reelection to the Board as provided for in the Bylaws. Executive also agrees to serve as
any elected/appointed director or officer of any subsidiary of the Company that the Company may, in its sole discretion, deem fit
and Executive shall serve in such capacity or capacities without additional compensation during the Employment Term. Executive
shall spend substantially all of Executive’s business time and attention at the Company’s headquarters in Dubuque,
Iowa, however Executive’s employment under this Agreement will require travel and stay outside Dubuque, Iowa and the United
States in order to fulfill Executive’s duties hereunder.

 

     

     

    

 

(b)       Certain
Obligations. During the Employment Term, Executive (i) shall devote 100% of Executive’s business time and attention to
achieve, in accordance with the policies and directives of the Board, and/or, at the option of the Board, the CEO, established
from time to time in its/their/Executive’s discretion, the objectives of the Company, (ii) shall be subject to, and comply
with, the rules, practices and policies applicable to executive employees whether reflected in an employee handbook, code of conduct,
compliance policy or otherwise, as the same may exist and be amended from time to time, of the Company; and (iii) shall not engage
in any business activities other than the performance of Executive’s duties under this Agreement. Notwithstanding the foregoing,
provided that Employee does not violate the Confidentiality Agreement, Executive may participate in civic, religious and charitable
activities, may make passive personal investments in other entities, and may serve as a director for the entities and in the capacities
set forth on Exhibit B hereto, or as otherwise approved by the Board in writing.

 

3.       Compensation.
For the services rendered herein by Executive, and the promises and covenants made by Executive herein, during the Employment Term
the Company shall pay compensation to Executive as follows.

 

(a)       Base Salary. In exchange for Executive’s services, the Company shall pay to Executive the sum of SEVEN HUNDRED
THOUSAND DOLLARS ($700,000) as an annual salary (the “Base Salary”), payable in accordance with the normal payroll
practices of the Company. The Board may review Executive’s Base Salary and may, in its sole discretion, adjust Executive’s
Base Salary upon such review.

 

(b)       Signing Bonus. In Exchange for Executive’s acceptance of the Company’s offer of employment and the terms
and conditions of this Agreement, the Company will provide Executive a signing bonus (the “Signing Bonus”) on
the Effective Date in the form of (i) an option to purchase 30,000 shares of common stock under the Omnibus Stock Plan and (ii)
an option to purchase 55,000 shares of common stock outside of any Company stock plan as an inducement grant under Nasdaq rules
and under substantially similar terms to the Omnibus Stock Plan grant. The exercise price of these options will be the Company’s
closing stock price on the Effective Date. One third of these options will vest on each of July 1, 2019, July 1, 2020 and July
1, 2021. Notwithstanding the foregoing, Executive will not receive the Signing Bonus unless and until the conditions and obligations
set forth in Section 7 below are met and fulfilled.

 

(c)       Annual Incentive. Executive will be eligible to participate in the Company’s Cash Incentive Plan (“CIP”).
Executive’s participation in the CIP is initially set at 115% of his base salary at a target award. Executive’s participation
for fiscal year 2019 will be prorated for days employed and the prorated amount of the award will be guaranteed at the target level
and subject to increase if the target level is exceeded. The Compensation Committee of the Board of Directors establishes the goals
for executive officers under the CIP annually with input from the CEO.

 

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(d)       Long-Term Incentive. Executive will be eligible to participate in the Company’s Long-Term Incentive Plan (“LTIP”)
beginning with the July 1, 2019 through June 30, 2022 performance period. Executive’s participation in the LTIP is set at
85% of his base salary at a target award. The Compensation Committee of the Board of Directors will establish the goals for the
execute officers for the future three-year performance periods with input from the CEO.

 

(e)       Special Hiring Award. In lieu of an award under the LTIP for performance periods beginning before July 1, 2019,
Executive will be granted on the Effective Date a special hiring award of $750,000 in the form of a combination of Restricted Stock
Units and Restricted Stock in an aggregate number based upon the average closing price for the ten trading days prior to the Effective
Date will be granted on the Effective Date and will vest as follows:

 

	Grant Date Value	Vesting Date
	$125,000	July 1, 2019
	$250,000	July 1, 2020
	$250,000	July 1, 2021
	$125,000	July 1, 2022

 

(f)        No Additional Compensation. Except for compensation set forth in this Agreement, Executive shall not receive additional
compensation in connection with providing services to or holding executive or directorial office(s) in the Company or any of its
subsidiaries unless otherwise agreed to by Executive and the Company in the Company’s sole discretion.

 

4.       Benefits.
During Executive’s employment with the Company, Executive shall be entitled to participate in all retirement plans, health
plans, paid time off benefits and other employee benefits and policies (including expense reimbursement policies) made available
by the Company to its officers and/or executive employees generally, as they may change from time to time. Executive shall also
be eligible to participate in the Company’s supplemental health insurance plan and furniture program. Further, the Company
shall reimburse Executive for annual membership fees to a Dubuque, Iowa area country club and for Executive’s annual personal
income tax preparation and filing fees. Executive acknowledges and agrees that except as specifically set forth in this Agreement,
the Company is under no obligation to Executive to establish or maintain any specific employee benefits in which Executive may
participate, and that Executive’s eligibility for employee benefits shall be governed by the terms and provisions of the
Company benefit plans or policies, all of which are subject to change by the Company, subject to applicable law. Upon the termination
of Executive’s employment, Executive shall be entitled to continue those benefits as may be required by state or federal
law. In addition, Executive is expected to relocate he and his family to Dubuque, Iowa. Executive will be paid $150,000 to cover
all relocation related expenses and is not entitled to any other reimbursement for such expenses. This $150,000 amount will be
fully grossed up for federal and state income taxes and for Medicare taxes. Executive agrees that if he voluntarily terminates
his employment with the Company within 2 years of the Effective Date, the $150,000 relocation expense payment (prorated for length
of service within the 2 years) will be immediately repaid to the Company.

 

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5.       Termination;
Severance Opportunity.

 

(a)       At-Will Employment. Executive and the Company agree that Executive’s employment with the Company is at-will and
either Executive or the Company, by and through the Board, may terminate Executive’s employment, at any time, with or without
any cause, with no prior notice.

 

(b)       Payments Upon Separation. When Executive’s employment with the Company ends, for any reason, the Company shall
pay to Executive: (i) any earned but unpaid Base Salary through the Employee’s last day of employment with the Company (such
date, the “Separation Date”); and (ii) any unreimbursed but validly reimbursable business expenses incurred
by Executive on or before the Separation Date. Upon the termination of Executive’s employment for any reason, Executive shall
be entitled to continue those benefits as may be required by state or federal law at Executive’s own cost and expense.

 

(c)       Participation in Severance Plan. Executive shall have the opportunity to participate in the Company’s Severance
Plan for Management Employees dated October 25, 2018, and as amended (the “Severance Plan”) according to its
terms and conditions. Executive’s eligibility to receive any severance payments shall be exclusively governed by the terms
and conditions of the Severance Plan.

 

(d)       Resignation From Board. When Executive’s employment with the Company ends, for any reason, Executive agrees to
resign from the Company’s Board.

 

6.       Representations.
Executive represents and warrants that:

 

(a)       Executive’s performance of all the terms and duties set forth in this Agreement will not breach any agreement to keep
in confidence proprietary information acquired by Executive in confidence or in trust prior to or outside of Executive’s
employment by the Company. Executive hereby represents and warrants that Executive has not entered into, and will not enter into,
any oral or written agreement in conflict herewith. The Company acknowledges Executive’s letter of agreement with HNI Corporation
dated February 16, 2018. The Company represents, warrants, and covenants that it will not encourage or require executive to engagement
in activities in violation of such agreement.

 

(b)       Executive is not subject to any other agreement that Executive will violate by working with the Company or in the position
for which the Company has hired Executive. Further, Executive represents that no conflict of interest or a breach of Executive’s
fiduciary duties will result by working with and performing duties for the Company.

 

(c)       Executive has carefully read this Agreement and that Executive has asked any questions needed for Executive to understand
the terms, consequences and binding effect of this Agreement and fully understands it and that Executive has been provided an opportunity
to seek the advice of legal counsel of Executive’s choice before signing this Agreement.

 

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(d)       During the period in which Executive receives any severance benefits under the Severance Plan that Executive will provide
a prompt response to Company in the event Company requests information connected to Executive’s employment with the Company
or regarding non-confidential information regarding Executive’s subsequent employment after ceasing to be an employee of
the Company.

 

(e)               
Executive is not currently involved, directly or indirectly, in any litigation as a defendant or as a party subject to any
counterclaims, nor is any such litigation threatened against Executive, directly or indirectly.

 

7.       Drug
Screening/Form I-9. Executive understands and agrees that he must complete pre-employment drug screening determined by,
and to the satisfaction of, the Company. In addition, Executive must complete the employee portion of a federal Form I-9 and provide
any documentation required by such form within three days after the Effective Date. In the event any pre-employment drug screening
is not successful to the satisfaction of the Company or that Executive does not fulfill his obligations related to the Form I-9
demonstrating his authorization to work in the United States, this Agreement will be null and void.

 

8.       Miscellaneous.

 

(a)       Notices.
All notices, requests, consents and other communications hereunder (i) shall be in writing, (ii) shall be effective upon receipt,
and (iii) shall be sufficient if delivered personally, electronically with receipt confirmation, or by mail, in each case addressed
as follows:

 

If to the Company:

 

Flexsteel
Industries, Inc.

Chair of
the Compensation Committee

385 Bell
Street

Dubuque,
Iowa 52001

 

With a copy
to:

 

Gray Plant
Mooty

500 IDS Center

80 South
Eighth Street

Minneapolis,
MN USA 55402

Attn: JC
Anderson

Email: JC.Anderson@gpmlaw.com

 

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If to Executive:

 

To Executive’s most recent
residential address or otherwise known by the Company or any other address Executive may provide to the Company in writing.

 

(b)       Entire
Agreement. This Agreement (including its Exhibits), the Confidentiality Agreement, the Severance Plan, CIP, LTIP, Omnibus Incentive
Plan, Benefits Summary, 401K plan, Supplemental Health Plan, and related benefit agreements constitute the entire agreement by
and between the Parties with respect to the subject matter contained herein and supersede all prior agreements or understandings,
oral or written, with respect to the subject matter contained herein. Notwithstanding the foregoing, Executive shall remain subject
to and bound by any employee handbook and any other employee policies adopted from time to time.

 

(c)        Amendments;
Waivers; Etc. This Agreement may not be altered, amended or modified in any manner, nor may any of its provisions be waived,
except by written amendment executed by the Parties hereto that specifically states that they intended to alter, amend or modify
this Agreement. No provision of this Agreement may be waived by either Party hereto except by written waiver executed by the waiving
party that specifically states that it intends to waive a right hereunder. Any such waiver, alteration, amendment or modification
shall be effective only in the specific instance and for the specific purpose for which it was given. No remedy herein conferred
upon or reserved by a Party is intended to be exclusive of any other available remedy, but each and every such remedy shall be
cumulative and in addition to every other remedy given under this Agreement or in connection with this Agreement and now or hereafter
existing at law or in equity.

 

(d)        Governing
Law and Venue. This Agreement and the rights of the Parties shall be governed by and construed and enforced in accordance with
the laws of the State of Iowa, without regard to any state’s choice of law principles or rules. The venue for any action
hereunder shall be in the State of Iowa, County of Dubuque, whether or not such venue is or subsequently becomes inconvenient,
and the parties consent to the jurisdiction of the state and federal courts in or applicable to the State of Iowa, County of Dubuque.

 

(e)       Successors
and Assigns. Neither this Agreement nor any rights or obligations hereunder are assignable by Executive. The Company shall
have the right to assign its rights and obligations under this Agreement to any affiliate or successor of the Company. This Agreement
will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s
death and (b) any successor of the Company. Any such successor of the Company (including but not limited to any person or entity
which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets
or business of the Company) will be deemed substituted for the Company under the terms of this Agreement for all purposes.

 

(g)       Counterparts.
This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original,
and all of which together shall constitute one and the same instrument.

 

    6 

     

    

 

(h)       Tax
Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

 

(i)        Section
Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be
deemed to constitute a part thereof, affect the meaning or interpretation of this Agreement or of any term or provision hereof.

 

    7 

     

    

SIGNATURE PAGE TO EXECUTIVE EMPLOYMENT
AGREEMENT

 

IN WITNESS WHEREOF,
the parties have executed this Employment Agreement as of the date set forth below.

 

	 	EXECUTIVE
	 	 	 
	December 17, 2018	/s/ Jerald K. Dittmer
	Date	      Jerald K. Dittmer
	 	 	 
		FLEXSTEEL INDUSTRIES, INC.
	 	 	 
	December 17, 2018	By: 	/s/ Thomas M. Levine
	Date	 	      Thomas M. Levine
	 	Its:	      Chair of the Board

 

    8 

     

    

 

	 	
        EXHIBIT A

 

CONFIDENTIALITY AND NONCOMPETITION AGREEMENT

Agreement made December 28, 2018 between
Flexsteel Industries, Inc., a corporation organized and existing under the laws of Minnesota, with its principal office located
at 385 Bell Street, Dubuque, Iowa (“Flexsteel”) on behalf of itself and its subsidiaries and Jerald K. Dittmer
(“Employee”)(collectively referred to as the “Parties”).

 

RECITALS

Flexsteel has employed Employee to devote
his/her full time, attention, and energies to the business of Flexsteel and to use his/her best efforts, skill, and abilities in
performing the specific duties of such employment, and Employee shall not, without prior written consent of Flexsteel, either directly
or indirectly, engage in any other occupation, profession or business.

 

As a result of the employment by Flexsteel,
Employee will have access to information not generally known to the general public or in the industry(s) in which Flexsteel is
or may become engaged about Flexsteel’s business/functional strategies, product design and development), processes, customers,
services, suppliers, pricing policies, marketing strategies and related matters. In addition, Flexsteel may provide training to
Employee in relation to these areas. It is the desire of Flexsteel and Employee that all such training and information be and remain
confidential.

 

In consideration of the matters described
above, and of the mutual benefits and obligations set forth in this Agreement, the Parties agree as follows:

 

SECTION ONE: CONFIDENTIALITY

		A.	Nondisclosure. Employee shall not, during or after the term of this Agreement, directly
or indirectly, use, disseminate, or disclose to any person (including other employees of Flexsteel not having a need to know or
authority to know), firm or other business entity for any purpose whatsoever, any information not generally known in the industry
in which Flexsteel is or may be engaged which was disclosed to Employee or known by Employee as a result of or through his/her
employment by Flexsteel. This includes information regarding Flexsteel’s employee’s products, processes, customers,
services, suppliers, pricing policies and related matters, and also includes information relating to research, development, inventions,
manufacture, purchasing, accounting, engineering, marketing, merchandising, and selling.

 

		B.	Confidential Relationship.  Employee shall hold in a fiduciary capacity for the benefit
of Flexsteel all information in paragraph A above, along with any and all inventions, discoveries, concepts, ideas, improvements,
ideas, improvements or know-how, discovered or developed by Employee, solely or jointly with other employees, during the term of
this Agreement, which may be directly or indirectly useful in or related to the business of Flexsteel or its subsidiaries, or may
be within the scope of its or their research or development work.

 

		C.	Customer Lists. Employee shall, at the time of and during employment, furnish a complete
list of all the correct names and places of businesses of all its customers, immediately notify Flexsteel of the name and address
of any new customer, and report all changes in location of old customers, so that upon the termination of employment, Flexsteel
will have a complete list of the correct names and addresses of customer with whom Employee has dealt.

 

    A-1 

     

    

 

	 	
         

 

		D.	Return of Documents. To protect the interests of Flexsteel, Employee agrees that,
during or after the termination of Employee’s employment by Flexsteel, all documents, records, notebooks, and similar repositories
containing such information described in paragraphs A, B and C above, including copies of such items, then in Employee’s
possession or work area, whether prepared by Employee or others, are the property of Flexsteel and shall be returned to Flexsteel
upon Flexsteel’s request.

 

SECTION TWO: NON-DISPARAGEMENT

The Employee agrees and covenants that
the Employee will not at any time make, publish, or communicate to any person or entity or in any public forum any defamatory or
disparaging remarks, comments, or statements concerning Flexsteel or its businesses, or its employees, officers and existing and
prospective customers, suppliers and other associated third parties.

 

This section does not, in any way, restrict
or impede the Employee from exercising protected rights to the extent that such rights cannot be waived by agreement, including
but not limited to Employee’s section 7 rights under the NLRA, or from complying with any applicable law or agency, provided
that such compliance does not exceed that required by the law, regulation or order. The employee shall promptly provide such written
notices of such order to Flexsteel’s legal department.

 

SECTION THREE: NONCOMPETITION

		A.	Employee Conduct with Respect to Competitors. During the term of Employee’s
employment by Flexsteel and for twelve (12) months after termination of such employment, Employee agrees that Employee will not,
without the prior written consent of Flexsteel, directly or indirectly, whether as an employee, officer, director, independent
contractor, consultant, stockholder, partner, or otherwise, engage in or assist others to engage in or have any interest in any
business which competes with Flexsteel in any geographic area in which Flexsteel markets or has marketed its products during the
year preceding termination.

 

		B.	Solicitation of Employees. Employee agrees that during the term of Employee’s
employment and for twelve (12) months after the termination of such employment, Employee will not induce or attempt to induce any
person who is an employee of Flexsteel to leave the employ of Flexsteel and engage in any business which competes with Flexsteel.

 

		C.	Maximum Restrictions of Time, Scope, and Geographic Area Intended. The Parties agree
and acknowledge that the time, scope and geographic area and other provisions of this Agreement are reasonable under these circumstances.
Employee further agrees that if, despite the express agreement of the parties to this Agreement, a court is expressly authorized
to modify any unenforceable provision of this Agreement in lieu of severing the unenforceable provision from this Agreement in
its entirety, whether by rewriting the offending provision, or deleting any or all of the offending provision, adding additional
language to this Agreement, or by making any other modifications as it deems warranted to carry out the intent and agreement of
the Parties as embodied herein to the maximum extent as permitted by law. The Parties expressly agree that this Agreement as so
modified by the court shall be binding upon and enforceable against each of them.

 

    A-2 

     

    

 

	 	
         

 

SECTION FOUR: BREACH OF AGREEMENT

		A.	Remedies. Employee agrees that violating Section One of this Agreement at any time,
including during litigation, will produce damages and injury to Flexsteel. In the event of the breach or, or threatened breach
by Employee of Section One of this Agreement, Flexsteel shall be entitled to seek injunctive relief, both preliminary and permanent,
enjoining and restraining such breach or threatened breach. Such remedies shall be in addition to all other remedies available
to Flexsteel in law or in equity, including by not limited to Flexsteel’s right to recover from Employee any and all damages
that may be sustained as a result of Employee’s breach.

 

		B.	Agreement Survives Termination. All rights of the Parties pursuant to this Agreement
shall survive any termination.

 

		C.	Choice of Law. The validity, interpretation, and performance of this Agreement shall
be controlled and construed under the laws of Iowa.

 

		D.	Attorney’s Fees. If an attorney shall be retained to interpret or enforce the
provisions of this Agreement, the prevailing party shall be entitled to reasonable attorney fees, including any such fees set by
the trial or appellate court upon trial or appeal.

 

SECTION FIVE: MISCELLANEOUS

		A.	Entire Agreement. This Agreement contains all the understandings and representations
between Employee and Flexsteel pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings,
agreements and representations, both oral and written, with respect to such subject matter.

 

		B.	Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which taken together shall constitute one and the same instrument. Delivery of an executed counterpart’s
signature page of this Agreement by facsimile, email in portable document format (.pdf), or by any other electronic means intended
to preserve the original graphic and pictorial appearance of a document, has the same effect as delivery of an executed original
of this Agreement.

 

Nothing in this Agreement
shall be construed to in any way terminate, supersede, undermine, or otherwise modify the “at-will” status of the
employment relationship between Flexsteel and the Employee, pursuant to which either Flexsteel or the Employee may terminate the
employment relationship at any time, with or without cause, and with or without notice.  

 

    A-3 

     

    

 

	EMPLOYEE	 	FLEXSTEEL INDUSTRIES, INC.	 
	By:	 	 	By:	 	 
	 	 	 	 	 	 
	Name: Jerald K. Dittmer	 	Name: Thomas M. Levine	 
	Title: President/CEO	 	Title: Chair of the Board	 
	Date: December 28, 2018	 	Date: December 28, 2018	 

 

    A-4 

     

    

 

EXHIBIT B

 

Commitments and/or Investment

 

None.

 

    B-1

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