INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement, dated as of _______, is made by and
between Furniture Brands International, Inc., a Delaware
corporation (the “Company”) and _______ (the
“Indemnitee”), an “agent” (as hereinafter
defined) of the Company.
A. The
Company recognizes that competent and experienced persons are
reluctant to serve as directors or officers of corporations unless
they are protected by comprehensive liability insurance or
indemnification, or both, due to increased exposure to litigation
costs and risks resulting from their service to such corporations,
and due to the fact that the exposure frequently bears no
reasonable relationship to the compensation of such directors and
officers;
B. The
statutes and judicial decisions regarding the duties of directors
and officers are often difficult to apply, ambiguous, or
conflicting, and therefore fail to provide such directors and
officers with adequate, reliable knowledge of legal risks to which
they are exposed or information regarding the proper course of
action to take;
C. The
Company and the Indemnitee recognize that plaintiffs often seek
damages in such large amounts and the costs of litigation may be so
enormous (whether or not the case is meritorious), that the defense
and/or settlement of such litigation is often beyond the personal
resources of directors and officers;
D. The
Company believes that it is unfair for its directors and officers
to assume the risk of huge judgments and other expenses which may
occur in cases in which the director or officer received no
personal profit and in cases where the director or officer was not
culpable;
E. The
Company, after reasonable investigation, has determined that the
liability insurance coverage presently available to the Company may
be inadequate to cover all possible exposure for which the
Indemnitee should be protected and/or is unreasonably expensive.
The Company believes that the interests of the Company and its
shareholders would best be served by a combination of such
insurance and the indemnification by the Company of the directors
and officers of the Company;
F. Section 145
of the General Corporation Law of Delaware
(“Section 145”), under which the Company is
organized, empowers the Company to indemnify its officers,
directors, employees and agents by agreement and expressly provides
that the indemnification provided by Section 145 is not
exclusive;
G. The
Board of Directors has determined that contractual indemnification
as set forth herein is not only reasonable and prudent but
necessary to promote the best interests of the Company and its
shareholders;
H. The
Company desires and has requested the Indemnitee to serve or
continue to serve as a director or officer of the Company free from
undue concern for claims for damages arising out of or related to
such services to the Company; and
I. The
Indemnitee is willing to serve, or to continue to serve, the
Company, only on the condition that he or she is furnished the
indemnity provided for herein.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements
set forth below, the parties hereto, intending to be legally bound,
hereby agree as follows:
(a)
Agent . For purposes of this Agreement,
“agent” of the Company means any person who is or was a
director, officer, employee or other agent of the Company, a
subsidiary of the Company or the Company’s Charitable Trust
or is or was a director, officer, employee or agent of a foreign or
domestic corporation which was a predecessor corporation of the
Company or a subsidiary of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise.
(b)
Expenses . For purposes of this Agreement,
“expenses” includes all direct and indirect costs of
any type or nature whatsoever (including, without limitation, all
reasonable attorneys’ fees and related disbursements, other
out-of-pocket costs and
reasonable
compensation for time spent by the Indemnitee for which he or she
is not otherwise compensated by the Company or any third party,
provided that the rate of compensation and estimated time involved
is approved by the Board of Directors, which approval shall not be
unreasonably withheld), actually and reasonably incurred by the
Indemnitee in connection with either the investigation, defense or
appeal of a proceeding or establishing or enforcing a right to
indemnification under this Agreement, Section 145 or
otherwise; provided, however, that expenses shall not include any
judgment, fines, ERISA excise taxes or penalties or amounts paid in
settlements.
(c)
Proceedings . For the purpose of this Agreement,
“proceeding” means any threatened, pending, or
completed claim, action, suit or other proceeding, whether civil,
criminal, administrative, investigative or any other type
whatsoever.
(d)
Subsidiary . For purposes of this Agreement,
“subsidiary” means any corporation (or other entity or
enterprise) of which more than 50% of the outstanding voting
securities (or comparable interests) are owned directly or
indirectly by the Company, by the Company and one or more other
subsidiaries, or by one or more other subsidiaries.
(e)
Miscellaneous . For purposes of this Agreement, any
person who acts in good faith and in a manner he or she reasonably
believes to be in the best interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have
acted in a manner “not opposed to the best interests of the
Company” as referred to in this Agreement.
2.
Agreement to Serve . The Indemnitee agrees to serve
and/or continue to serve as an agent of the Company, at its will
(or under separate agreement, if such agreement now or hereafter
exists), in the capacity Indemnitee currently serves (or in such
other positions which he or she agrees to assume) as an agent of
the Company, so long as he or she is duly appointed or elected and
qualified in accordance with the applicable provisions of the
Bylaws of the Company, any subsidiary of the Company, or until such
time as he or she tenders his or her resignation in writing,
provided, however, that nothing contained in this Agreement is
intended to create any right to continued employment by Indemnitee
in any capacity.
3.
Indemnity in Third Party Proceedings . The Company
shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any
proceeding (other than a proceeding by or in the name of the
Company to procure judgment in its favor) by reason of the fact
that the Indemnitee is or was an agent of the Company, or by reason
of any act or inaction by him or her in any such capacity, against
any and all expenses and liabilities of any type whatsoever
(including, but not limited to, judgments, settlements, fines and
penalties), actually and reasonably incurred by him or her in
connection with the investigation, defense, settlement or appeal of
such proceeding, but only if the Indemnitee acted in good faith and
in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The termination of any proceeding
by judgment, order of court, settlement, conviction or on plea of
nolo contendere, or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to any criminal
proceedings, that such person had reasonable cause to believe that
his or her conduct was unlawful.
4.
Indemnity in Derivative Action . The Company shall
indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or otherwise involved in any
proceeding by or in the name of the Company to procure a judgment
in its favor by reason of the fact that the Indemnitee is or was an
agent of the Company, or by reason of any act or inaction by him or
her in any such capacity, against all expenses actually and
reasonably incurred by the Indemnitee in connection with the
investigation, defense, settlement, or appeal of such proceeding,
but only if the Indemnitee acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best
interests of the Company, except that no indemnification under this
subsection shall be made in respect of any claim, issue or matter
as to which the Indemnitee shall have been finally adjudged to be
liable to the Company by a court of competent jurisdiction unless
and only to the extent that the Court of Chancery or other court in
which such proceeding was brought or another court of competent
jurisdiction shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses as such court shall deem
proper.
5.
Indemnification of Expenses of Successful Party .
Notwithstanding any other provisions of this Agreement, to the
extent that the Indemnitee has been successful on the merits or
otherwise in defense of any proceeding or in defense of any claim,
issue or matter therein, including the dismissal of an action
without prejudice, the Company shall indemnify the Indemnitee
against all expenses actually and reasonably incurred in connection
with the investigation, defense or appeal of such
proceeding.
6.
Partial Indemnification . If the Indemnitee is
entitled under any provision of this Agreement to indemnification
by the Company for some or a portion of any expenses or liabilities
of any type whatsoever (including, but not limited to,
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