Exhibit 10(b)
FURNITURE BRANDS INTERNATIONAL, INC.
1999 LONG-TERM INCENTIVE PLAN
1. PURPOSE. The purpose of the 1999 Long-Term Incentive
Plan (the Plan ) of Furniture Brands International, Inc. (the
Furniture Brands ) is to promote the interests of Furniture
Brands and its stockholders (i) by attracting and retaining
exceptional executive personnel and other key employees of
Furniture Brands, (ii) by motivating such key employees to remain
in the employ of Furniture Brands and to work to the best of
their abilities for the achievement of Furniture Brands
strategic growth objectives, and (iii) by encouraging ownership
of Furniture Brands Common Stock ( Common Stock or "Shares") by
such key employees. Furniture Brands intends to accomplish these
purposes by awarding to such key employees long-term, equity-
based incentives, which, if performance objectives and/or
service requirements with Furniture Brands are achieved, will
permit them to share in Furniture Brands success.
2. PARTICIPANTS. (a) Participants in the Plan
( Participants ) shall be those full time employees of Furniture
Brands whom the Committee (as herein defined) determines, in its
discretion, to be key employees important to the growth of
Furniture Brands, and to whom the Committee shall make any award
under the Plan. At the discretion of the Committee, outside
directors of Furniture Brands may also be Participants in the
Plan. As used in this Plan, Furniture Brands" includes all
subsidiaries and divisions of Furniture Brands, and any other
entities in which Furniture Brands or one of its subsidiaries has
a significant equity or other interest as determined by the
Committee. Awards made under the Plan shall not be affected by
any change of employment so long as the Participant continues to
be an employee of Furniture Brands.
(b) No person shall have any claim or right to receive
an award under the Plan, and nothing in the Plan or in any award
made pursuant to the Plan shall alter the terms of any
participant's employment or confer on any Participant any right
to continue in the employ of Furniture Brands or interfere in any
way with the right of Furniture Brands to terminate his or her
employment at any time.
3. ADMINISTRATION. (a) The Plan shall be administered
by the Executive Compensation and Stock Option Committee (the
Committee ) of the Board of Directors (the Board") of Furniture
Brands, or such other committee as the Board may determine,
provided that the Committee shall consist of two or more members
who are "Non-Employee Directors" as defined in Rule 16b-3 under
the Securities Exchange Act of 1934, as amended (the "1934 Act"),
and who are "outside directors" within the meaning of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code").
(b) Subject to the express provisions of the Plan, the
Committee shall have plenary authority, in its discretion, to
determine the individuals to whom and the times at which awards
shall be made under the Plan, the number of Shares subject to
each award, and the terms and provisions of each award. In
making such determinations the Committee may take into account
any factors that the Committee, in its discretion, shall deem
relevant. Subject to the express provisions of the Plan, the
Committee shall also have plenary authority to interpret the
Plan, to prescribe, amend and rescind rules relating to it, and
to make all other determinations which the Committee believes
necessary or advisable for the proper administration of the Plan.
The Committee's determinations on matters relating to the Plan
shall be final and conclusive on Furniture Brands and all
Participants. No member of the Committee shall be liable to any
person for any action taken or omitted in connection with the
interpretation and administration of the Plan unless attributable
to willful misconduct or lack of good faith.
4. SHARES COVERED BY THE PLAN. (a) The number of
Shares allocated to and reserved for award under the Plan shall
be the total of: (i) 2,250,000 Shares, plus (ii) all Shares which
are reserved for issuance and available for award in the
Furniture Brands 1992 Stock Option Plan (the 1992 Plan ) as of
the Effective Date (as defined herein), plus (iii) all Shares
which become available for award (due to cancellation or
otherwise) under the 1992 Stock Option Plan before or after the
Effective Date. The maximum aggregate number of stock options
and Stock Appreciation Rights which may be awarded to a
Participant in any given year shall be 250,000 Shares, and the
maximum aggregate number of Performance Shares and Shares of
Restricted Stock which may be awarded to a Participant for any
given performance or restriction period shall be 250,000 Shares.
Throughout the term of the Plan, not more than 750,000 of the
Shares allocated to and reserved for award under the Plan shall
be awarded as Performance Shares or Shares of Restricted Stock.
(b) Any Shares covered by any award or portion of an
award made under the Plan, which is forfeited, canceled or
expires shall be deemed not to have been delivered for purposes
of determining the maximum number of Shares available for
delivery under the Plan, and the Committee may again award to an
existing or new Participant the Shares so canceled or forfeited.
(c) The number of Shares reserved and available for
award under the Plan, the number of Shares covered by each
outstanding award, the price per share in each award and
performance standards may all be appropriately and equitably
adjusted by the Committee for any change in the Common Stock
resulting from stock dividends, stock splits, spin-offs,
combination or exchange of Shares, reclassification,
reorganization, merger, consolidation, recapitalization and
similar matters affecting outstanding Shares. The determination
of the Committee shall be final and conclusive in this regard.
No fractional Shares shall be awarded or issued under the Plan;
cash may be paid in lieu of any fractional Shares in settlement
of awards. In the event Furniture Brands enters into a
transaction described in Section 424(a) of the Code with any
other corporation, the Committee shall make awards under the Plan
to employees or former employees of such corporation in
substitution of awards previously made to them upon such terms
and conditions as shall be necessary to qualify such award as a
substitution described in Section 424(a) of the Code.
(d) Furniture Brands will allocate and reserve in each
fiscal year a sufficient number of Shares for issuance upon the
exercise of options and Stock Appreciation Rights awarded under
the Plan. Furniture Brands may, in its discretion, use Shares
held in the treasury or authorized but unissued Shares for the
Plan.
5. TIME OF AWARDS. Any award under this Plan shall be
deemed to be made on the date on which the Committee takes formal
action with respect to the award, provided that such award is
evidenced by a written communication duly executed on behalf of
Furniture Brands and delivered to the Participant within a
reasonable time after the date of the Committee action.
6. STOCK OPTIONS.
(a) Nature of Awards. The Committee may, from time to
time, award to Participants options to purchase Shares. Any
option awarded under the Plan may, at the discretion of the
Committee, qualify as an incentive stock option as defined in
Section 422(b) of the Code ("Incentive Stock Option"), provided,
however, that outside directors of Furniture Brands may not
receive Incentive Stock Options. Unless it is designated an
Incentive Stock Option by the Committee, any option awarded under
the Plan shall be non-qualified. Any option awarded under the
Plan shall be subject to the provisions of this Plan and shall
contain such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall deem
desirable.
(b) Option Price. The Committee shall determine the
exercise price of any option granted under the Plan, provided
however, that except for options awarded to replace pre-existing
compensation or benefit programs, in no event shall any options
be awarded at less than Fair Market Value at the time of grant.
"Fair Market Value" for all purposes under this Plan shall be the
closing price of Furniture Brands Common Stock as reported on
the New York Stock Exchange Composite Tape for the day in
question ( Closing Price ); provided, however, that, in the
absence of a Closing Price, the Committee may adopt any other
comparable criteria for the determination of Fair Market Value as
it may determine to be appropriate.
(c) Payment of Option Prices. The exercise price is to
be paid in full upon the exercise of the option, either (i) in
cash, (ii) pursuant to a cashless exercise process offered by
Furniture Brands, (iii) in the discretion of the Committee, by
the tender either actually or by attestation to Furniture Brands
of Shares owned by the Participant and registered in the
Participant's name or held for the Participant's benefit by a
registered holder, having a Fair Market Value equal to the
aggregate exercise price of the options being exercised, or (iv)
in the discretion of the Committee, by any combination of the
payment methods specified in clauses (i), (ii) or (iii) above.
Provided, however, that a Participant may not tender Shares in
exercise of an Incentive Stock Option if the Participant acquired
such Shares through the exercise of an Incentive Stock Option or
an employee stock purchase plan described in Section 423 of the
Code, unless (i) the Participant has held such Shares for at
least one (1) year, and (ii) at least two (2) years have elapsed
since the option was awarded. The cash proceeds derived from the
exercise of options are to be added to the general funds of
Furniture Brands.
(d) Taxes. Following exercise of an option, the
Participant shall, no later than the date as of which an amount
related to the option exercise first becomes includable in the
gross income of the Participant for federal income tax purposes,
pay to Furniture Brands, or make arrangements satisfactory to
Furniture Brands regarding payment of, any federal, state, or
local taxes of any kind required by law to be withheld with
respect to such amount. Furniture Brands shall have the right at
the time of exercise to deduct such taxes or to withhold
sufficient Shares to satisfy Furniture Brands obligation to
withhold for federal, state and local taxes on such exercise.
(e) Limitations Applicable to Incentive Stock Options.
The maximum aggregate Fair Market Value (determined at the time
an option is awarded) of Shares with respect to which any
Participant may exercise Incentive Stock Options for the first
time during any calendar year (under all plans of Furniture
Brands and its Subsidiaries) shall not exceed the amount
specified in Section 422(d) of the Code. If the provisions of
this Section limit the exercisability of certain Incentive Stock
Options which would otherwise become exercisable on account of
termination of employment or a Change of Control (as defined
herein), the Committee, in its sole discretion, shall determine
the time at which such Incentive Stock Options become exercisable
so that the provisions of this Section are not violated. The
Committee may not award Incentive Stock Options to any individual
who, at the time the option is awarded, owns stock possessing
more than ten percent (10%) of the total combined voting power of
all classes of stock of Furniture Brands unless: (i) the Purchase
Price is at least 110% of the Fair Market Value of the Shares
subject to the option, and (ii) the option states that it is not
exercisable after the expiration of five (5) years from the date
of award.
(f) Exercise of Options. The Committee shall fix the
term of each option at the time of award, but no option shall be
exercisable after the expiration of ten (10) years from the date
of award. Within such limit, options will be exercisable at such
time or times, and subject to such restrictions and conditions,
as the Committee shall determine, at or subsequent to grant,
which restrictions and conditions need not be uniform for all
Participants; provided, however, that no option shall be
exercisable before the first anniversary date of the award; and
provided, further, that, except as provided in Paragraph (g) of
this Section 6, no option may be exercised unless the Participant
is at that time a full-time employee of Furniture Brands or a
director of Furniture Brands and has been so employed or engaged
continuously since the date of award.
(g) Termination of Employment or Service as an Outside
Director.
(1) If a Participant's employment (or service as an
outside director) terminates by reason of retirement, that
Participant may exercise any option at any time within three (3)
years after such termination, but only to the extent the
Participant was entitled to exercise at the date of such
termination, and in any event not after the expiration of the
stated period of the option; provided however, that the Committee
may, at or subsequent to grant, establish such longer or shorter
period as it may determine in its discretion, but in any event
not longer than five (5) years nor shorter than one (1) year
after the date of such termination. For purposes of this Plan,
retirement is defined as termination of service with Furniture
Brands at or after attainment of age 55 with not less than ten
years of service.
(2) If a Participant's employment (or service as an
outside director) terminates by reason of disability, that
Participant may exercise any option at any time within one (1)
year after such termination, but only to the extent the
Participant was entitled to exercise at the date of such
termination, and in any event not after the expiration of the
stated period of the option. For purposes of this Plan,
"disability" means the incapacity to attend to and perform
effectively one's duties and responsibilities which continues for
at least 26 weeks after its commencement, as determined by a
physician selected by Furniture Brands. A person shall be
considered disabled only if he or she furnishes such proof of
disability as the Committee may require.
(3) If a Participant's employment (or service as an
outside director) terminates by reason of death while he or she
is employed by or serving as an outside director of Furniture
Brands, or within three (3) months after termination of such
employment or service (or one (1) year in the case of the
termination of employment or service by reason of disability, or
five (5) years in the case of termination of employment or
service by reason of retirement), any option held by a
Participant may be exercised by a legatee or legatees under the
Participant's last will, or by personal representatives or
distributees, at any time within one (1) year after death, but
only to the extent that the Participant was entitled to exercise
at the date of such death, and in any event not after the
expiration of the stated period of the option.
(4) If a Participant's employment (or service as an
outside director) terminates for any reason other than
retirement, disability or death, that Participant may exercise
any option at any time within three (3) months after such
termination, but only to the extent the Participant was entitled
to exercise at the date of such termination, and in any event not
after the expiration of the stated period of the option.
(h) Option Repurchase. The Committee may at any time
offer to repurchase an option (other than an option which has
been held for less than six months by a Participant who is
subject to Section 16(b) of the Securities Exchange Act of 1934)
on such terms and conditions as the Committee shall establish and
communicate to the Participant at the time the offer is made.
(i) Restrictions on Shares. The Committee may require
each Participant exercising an option under the Plan to represent
to Furniture Brands in writing that he/she is not acquiring the
Shares with a view to distribution thereof. The certificates for
such Shares may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer. All
certificates for Shares delivered under the Plan shall be subject
to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and
other requirements of the Securities and Exchange Commission, any
stock exchange upon which the Shares are then listed, and any
applicable federal or state securities law, and the Committee may
cause a legend to be put on any such certificates to make
appropriate reference to such restrictions.
(j) Transferability of Options. Each option awarded
under the Plan shall be non-transferable otherwise than by will
or the laws of descent and distribution, provided, however, that
the Committee may, in its sole discretion, authorize all or a
portion of the options granted to a Participant to be on terms
which permit transfer to: (i) the spouse, children or
grandchildren of the Participant ("Immediate Family Members"),
(ii) a trust or trusts for the exclusive benefit of Immediate
Family Members, (iii) a partnership in which Immediate Family
Members are the only partners, or (iv) a former spouse pursuant
to a qualified domestic relations order, provided that subsequent
transfers of transferred options shall be prohibited except by
will or the laws of descent and distribution. Following
transfer, any such options shall continue to be subject to the
same terms and conditions as were applicable immediately prior to
transfer.
7. STOCK APPRECIATION RIGHTS.
(a) Tandem Stock Appreciation Rights. (a) The
Committee may award Tandem Stock Appreciation Rights along with
the award of any stock option under the Plan. A Tandem Stock
Appreciation Right shall be the right of the option holder to
surrender the related stock option and to receive from Furniture
Brands cash and/or Shares equal to the excess of the Fair Market
Value per Share on the date the Right is exercised over the
exercise price of the related option. Tandem Stock Appreciation
Rights may be granted at any time prior to the exercise or
termination of the related stock options; provided, however that
a Tandem Stock Appreciation Right awarded in relation to an
Incentive Stock Option must be granted concurrently with that
Incentive Stock Option. Tandem Stock Appreciation Rights may be
exercised only (i) when the related stock option is also
exercisable, (ii) when the Fair Market Value per Share exceeds
the exercise price of the related option, and (iii) by surrender
of the related option for cancellation.
(b) Free-Standing Stock Appreciation Rights. The
Committee may also award Free-Standing Stock Appreciation Rights.
A Free-Standing Stock Appreciation Right shall not relate to any
particular option award, but shall be the right of a Participant
to receive from Furniture Brands cash and/or Shares equal to the
excess of the Fair Market Value per Share on the date the Right
is exercised over the "Base Price" established by the Committee
at the time of award. Subject to the same limitations as are
included in Section 6(c) with respect to below-market grants of
options, the Base Price may be equal to or greater than or less
than the Fair Market Value per Share on the date of award.
Successive awards of Free-Standing Stock Appreciation Rights may
be made to the same Participant regardless of whether Rights
previously awarded to the Participant remain unexercised. The
Committee shall fix the term of each Free-Standing Stock
Appreciation Right at the time of award, but no Free-Standing
Stock Appreciation Right awarded hereunder shall be exercisable
after the expiration of ten (10) years from the date of award.
(c) Procedure for Award. Each award of a Stock
Appreciation Right shall be evidenced by a writing executed on
behalf of Furniture Brands by an officer and delivered to the
Participant, which writing shall describe the Stock Appreciation
Rights, identify the related stock options (if applicable), state
that such Stock Appreciation Rights are subject to all of the
terms and conditions of this Plan, and contain such other terms
and conditions not inconsistent with this Plan, as the Committee
may approve.
(d) Exercise and Payment. A Stock Appreciation Right
shall be exercised by the delivery to Furniture Brands of a
written notice which shall state that the Participant elects to
exercise his or her Stock Appreciation Right as to the number of
Shares specified in the notice. In the discretion of the
Committee, Stock Appreciation Right award amounts shall be
payable in cash or in Shares or in any combination thereof.
(e) Other Provisions of Plan Applicable. All provisions
of the Plan applicable to options awarded under the Plan shall
apply with equal effect to Stock Appreciation Rights.
8. PERFORMANCE SHARES.
(a) Performance Shares; Performance Period. The
Committee may award Shares covered by the Plan as units
representing Performance Shares. Performance Shares represent
the right to receive future payment contingent on both
continuation of service with Furniture Brands and the achievement
of specified performance objectives which are established at the
time of award. No Shares will be issued at the time of an award
of Performance Shares, but the award will represent the right to
receive payment if the performance objectives are achieved.
Performance objectives need not be the same in respect of all
Participants and may be established separately for Furniture
Brands as a whole or for its subsidiaries or portions thereof.
The performance objectives shall be based upon one or more of the
following criteria: sales, pre-tax earnings, net earnings,
earnings per share, earnings per share growth, operating profit
margin, gross profit margin, cash flow, return on equity, asset
management, and total shareholder return. The performance
objectives may include or exclude specified items of an unusual,
non-recurring or extraordinary nature. The performance period
for which achievement of any performance objective shall be
measured shall not be less than three years. Performance periods
may overlap one another, and a Participant may simultaneously
hold awards covering overlapping periods with different
performance goals.
(b) Performance Share Awards. Performance Share awards
shall be made as follows:
(1) Performance Programs; Initial Awards. The Committee
may establish one or more performance programs each with
specified objectives and a specified performance period.
Participants may be awarded Performance Shares in any one or more
of the performance programs.
(2) Subsequent Awards. During the term of a performance
program, additional Performance Shares may be awarded (subject to
the maximum number of Shares allocated to and reserved for award
under the Plan), either (i) to new Participants in the program,
or (ii) if circumstances so warrant, to any one or more of the
initial Participants in the program. In respect of such
additional awards the Committee may make such adjustments therein
as it may deem reasonable on account of any lesser period of
participation in the program by the holder of any subsequent
award.
(3) Notice of Awards. Upon the making of any award, the
Committee shall advise the Participant in writing of the number
of Performance Shares awarded and of the terms of the award.
(c) Performance Share Payment. If the applicable
targeted performance objective is met, the Participant shall be
entitled to receive an amount equal to the Fair Market Value of
one Share on the date of the expiration of the applicable
performance period multiplied by the number of Performance Shares
held. At the time it establishes the targeted performance
objective, the Committee may (i) establish a minimum performance
target below which no payment will be made, (ii) provide for
payment of less than Fair Market Value if the minimum performance
target is met but the targeted performance objective is not
achieved; and/or (iii) provide for payment of greater than Fair
Market Value if the targeted performance objective is exceeded,
up to a maximum payment of two times the targeted performance
payment. The Committee may provide that any awards under the
Plan earn dividend equivalents, and such dividend equivalents
will be credited to a Participant's account. Payment for
Performance Shares may be in Shares, in cash, in stock equivalent
units, or in any combination thereof as determined by the
Committee, and any such payment may be subject to such terms,
conditions or restrictions as the Committee may impose.
(d) Time of Payment. Subject to the deferral provisions
of Section 12 hereof, distribution of amounts to which a
Participant is entitled after the expiration of a performance
period shall be made as soon as practicable after the holder of
the Performance Shares becomes entitled thereto, unless the terms
of that award specify that payment of the Performance Shares is
subject to specified vesting conditions after attainment of the
performance objective, in which case payment shall be delayed
until such vesting conditions have been satisfied.
(e) Conditions to Payments. In order to be entitled to
receive any payment on Performance Shares, a Participant must be
in the employ of Furniture Brands on the expiration of the
relevant performance period and must have been continuously in
the employ of Furniture Brands from the time of the date of the
award. No vested interest in any payment under the Performance
Shares shall accrue during the performance period and no payment
in respect of the Performance Shares shall be required to be made
to any Participant whose employment with Furniture Brands is
terminated, with or without cause, prior to the time such
Participant is entitled to receive a distribution under the Plan;
provided, however, that (i) if a Participant in the Plan retires
prior to the time such Participant is to receive distribution on
any Performance Shares awarded, the amount of payment to such
Participant shall be pro-rated in such manner as the Committee
shall reasonably determine, and (ii) the Committee, in its
absolute discretion, may provide for such pro-rata or other
payment (or no payment), as it may determine to a Participant
whose employment terminates (other than by reason of retirement)
prior to the time the Participant is entitled to receive
distribution of Performance Shares. If termination is on account
of death, the Committee may provide for payment of any
distribution it authorizes to the Participant's surviving spouse,
heirs or estate.
(f) Determination of Achievement of Objectives. The
Committee shall determine whether any performance objective of
any program has been met. In making this determination, the
Committee shall apply the accounting results, as audited at the
end of any fiscal year by Furniture Brands independent certified
accountants, but may adjust such results for unusual,
nonrecurring or extraordinary items. When making a Performance
Share payment, the Committee shall certify in writing the
achievement of the applicable performance objectives and the
amount of payments to be made to each Participant.
9. RESTRICTED STOCK. The Committee may make awards of
Restricted Stock under the Plan. Each award of Restricted Stock
shall constitute an immediate transfer of the ownership of Shares
to the Participant in consideration of the performance of
services, entitling each Participant to voting, dividend and
other ownership rights, but subject to substantial risk of
forfeiture (within the meaning of Section 83 of the Code).
Awards of Restricted Stock shall be forfeitable if the
Participant resigns or is discharged from the employ of Furniture
Brands, with or without cause, during the restriction period,
which shall in no event be less than three years. The Restricted
Stock shall be forfeitable on such other terms and conditions and
shall be subject to such additional restrictions as may be
specified by the Committee in the notice of award. After the
date of award, the Committee, in its discretion, may waive any of
the terms and conditions thereof and may reduce the restriction
period applicable thereto; provided, however, that the Committee
shall not reduce such period to less than three years.
10. OTHER LONG-TERM INCENTIVES. Subject to the maximum
number of Shares allocated to and reserved for award under the
Plan, in addition to stock options, Stock Appreciation Rights,
Performance Shares and Restricted Stock as described herein, the
Committee may, in its sole discretion, award other equity-based,
long-term incentives under the Plan, establishing therefor such
terms and conditions as it may deem appropriate under the
circumstances.
11. CHANGE IN CONTROL. Any provision herein to the
contrary notwithstanding, in the event of a Change of Control (as
defined below) (i) all options and Stock Appreciation Rights
awarded prior to such Change of Control shall become fully
exercisable, (ii) Participants then holding awards of Performance
Shares shall be entitled to receive such Performance Shares (or
equivalent value in Shares or in cash) free of any conditions as
if the specified performance periods had elapsed and the
performance objectives relating thereto had been fully achieved,
and (iii) the restriction period applicable to all Restricted
Stock then outstanding shall be accelerated and be deemed to be
satisfied so that the holders of such Restricted Stock shall
immediately hold said Restricted Stock fully vested and without
any continuing restrictions thereon, excepting, however, such
restrictions, if any, as may then be applicable under state or
federal securities laws. "Change of Control'' as used in this
Plan shall mean:
(a) The purchase or other acquisition (other than from
Furniture Brands) by any person, entity or group of persons,
within the meaning of Section 13(d) or 14(d) of the 1934 Act
(excluding, for this purpose, Furniture Brands or its
subsidiaries or any employee benefit plan of Furniture Brands or
its subsidiaries), of beneficial ownership (within the meaning of
Rule 13d-3 of the 1934 Act) of 25% or more of either the
then-outstanding Shares or the combined voting power of Furniture
Brands then-outstanding voting securities entitled to vote
generally in the election of directors; or
(b) Individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board, provided that any
person who becomes a director subsequent to the Effective Date
whose election or nomination for election by Furniture Brands
stockholders was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an
individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the
election of directors of Furniture Brands) shall be considered as
though such person were a member of the Incumbent Board; or
(c) Approval by the stockholders of Furniture Brands of
(i) a reorganization, merger, or consolidation, in each case with
respect to which persons who were the stockholders of Furniture
Brands immediately prior to such reorganization, merger or
consolidation would not immediately thereafter own, directly or
indirectly, more than 50% of the combined voting power entitled
to vote generally in the election of directors of the
reorganized, merged or consolidated corporation's
then-outstanding voting securities, or (ii) a liquidation or
dissolution of Furniture Brands or (iii) the sale of all or
substantially all of Furniture Brands' assets.
12. DEFERRAL. The Committee may permit Participants to
elect to defer the issuance of Shares or the settlement of any
awards under this Plan in cash under such rules and procedures as
it may establish under a separate deferred compensation plan.
13. FOREIGN PARTICIPATION. The Committee may provide for
such special terms for awards to Participants who are foreign
nationals, or who are employed by Furniture Brands outside the
United States of America, as the Committee may consider necessary
or appropriate to accommodate differences in local law, tax
policy or custom.
14. AMENDMENT AND TERMINATION. (a) The Committee may at
any time terminate the Plan or make such modifications of the
Plan as it shall deem advisable; provided, however, that the
Committee may not, without further approval by the Furniture
Brands stockholders, make any modifications which (i) would
increase the total number of Shares allocated to and reserved for
award under the Plan, or (ii) by applicable law or rule, require
such approval. No termination or amendment of the Plan may,
without the consent of the Participant to whom any award shall
theretofore have been made, adversely affect the rights of such
Participant under such award.
(b) The Committee may amend the terms of any award under
the Plan, prospectively or retroactively, but no such amendment
shall impair the rights of any Participant without the consent of
the Participant, and in no case shall the terms of any option be
amended to reduce the exercise price to a price less than the
Fair Market Value on the original date of grant.
15. PAYMENTS IN COMMON STOCK; SOURCE OF SHARES. (a) It is
anticipated that any Shares delivered pursuant to the terms of
the Plan will be Treasury Shares. The Committee, however, may
instead utilize authorized but unissued Shares or may purchase
Shares on the open market; and, subject to the approval of this
Plan by the stockholders of Furniture Brands, the Board and
officers of Furniture Brands are authorized to take such action
as may be necessary to provide for the issuance of any or all of
the Shares which may be necessary to satisfy Furniture Brands
obligations under the Plan and to cause said Shares to be listed
on the New York and any other stock exchanges on which the Common
Stock may at such time be listed.
(b) Shares delivered to Participants under the Plan in
satisfaction of Performance Share rights, and other Incentive
Shares after the release of any conditions applicable thereto may
nonetheless thereafter be restricted stock under the Securities
Act of 1933, as presently amended, (the ``1933 Act'') and the
certificates for such Shares may have a legend imprinted thereon
restricting the resale, hypothecation or further transfer of said
Shares except in a registered offering or pursuant to an
available exemption from registration.
16. EFFECTIVE DATE; TERM. (a) The Plan will become
effective upon adoption by the Board of Directors of Furniture
Brands on January 29, 1999 (the "Effective Date"), subject to
approval of the Plan by the stockholders of Furniture Brands
within twelve (12) months of such date. Awards under the Plan
may be made before such stockholder approval (but may not be
exercisable before such approval), and if such approval is not
obtained, this Plan and such awards shall be void and of no force
or effect.
(b) The Plan shall terminate ten (10) years after the
Effective Date, and no awards shall be made under the Plan after
the expiration of such ten-year period. During the term of the
Plan, awards may be made with terms, conditions or restrictions
extending beyond the end of the term of the Plan. Conditions and
restrictions in respect of awards made under the Plan during the
term of the Plan shall continue in effect after the termination
of the Plan until they shall be satisfied or forfeited in
accordance with their terms.
17. SEPARABILITY OF PROVISIONS. With respect to
Participants subject to Section 16 of the 1934 Act, this Plan and
transactions under the Plan are intended to comply with all
applicable provisions of Rule 16b-3 under the 1934 Act or its
successors. To the extent that any provision of the Plan or
action of the Committee fails to so comply, it shall be deemed
null and void to the extent permitted by law and deemed advisable
by the Committee, and the validity, legality and enforceability
of the remaining provisions of the Plan shall not be in any way
affected or impaired thereby. To the extent permissible by law,
any provision which could be deemed null and void shall first be
construed, interpreted or revised retroactively to permit this
Plan to be construed in compliance with all applicable laws so as
to foster the intent of the Plan
18. GOVERNING LAW. To the extent that federal laws do not
otherwise control, the Plan shall be construed in accordance with
and governed by the laws of the State of Delaware.
Adopted by the Board of Directors of Furniture Brands
International, Inc. on January 29, 1999.