FURNITURE BRANDS INTERNATIONAL INC, DEF 14A, 1999-03-18

FURNITURE BRANDS INTERNATIONAL INC
DEF 14A, 1999-03-18
HOUSEHOLD FURNITURE

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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2)
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12

Furniture Brands International, Inc.
----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):
[X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l)
and 0-11.
1) Title of each class of securities to which transaction
applies:

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2) Aggregate number of securities to which transaction
applies:

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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.

1) Amount Previously Paid:

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2) Form, Schedule or Registration statement No.:

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3) Filing Party:

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4) Date Filed:

-----------------------------------------<PAGE>

FURNITURE BRANDS
INTERNATIONAL,INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Furniture Brands International, Inc. will hold the annual meeting of
its stockholders at 9:00 a.m. on Thursday, April 29, 1999, at the Ritz-
Carlton Hotel, 100 Carondelet Plaza, St. Louis, Missouri. The meeting
will be held for the following purposes:

I. to elect eight directors;

II. to consider and act upon a proposal to adopt the
Furniture Brands 1999 Long-Term Incentive Plan;

III. to consider and act upon a proposal to amend the
Furniture Brands Executive Incentive Plan;

IV. to ratify the selection of independent auditors; and

V. to transact such other business as may properly come before
the meeting.

Stockholders of record at the close of business on March 1, 1999, will
be entitled to receive notice of and to vote during the 1999 annual
meeting and during any adjournment or adjournments thereof.

By order of the Board of Directors,

/s/ Lynn Chipperfield

Lynn Chipperfield,
Vice-President and Secretary

St. Louis, Missouri, March 18, 1999.

IMPORTANT

Whether or not you plan to attend the meeting, please complete, date
and sign the enclosed proxy form, and return it PROMPTLY
in the enclosed envelope, which requires no postage if
mailed in the United States.<PAGE>

PROXY STATEMENT

Furniture Brands International, Inc. ("Company"), 101 South Hanley
Road, St. Louis, Missouri 63105 is furnishing this proxy statement in
connection with the solicitation of proxies on behalf of the Board of
Directors ("Board") of the Company for use during the 1999 annual
meeting of stockholders and at any adjournments thereof. The meeting
will be held for the purposes set forth in the accompanying notice of
annual meeting of stockholders. The Company will bear the cost of the
solicitation, which will consist primarily of printing, postage and
handling, including the expenses of brokers, nominees and other
fiduciaries in forwarding proxy materials to beneficial owners.
Directors, officers and other employees of the Company may also solicit
proxies personally or by telephone. In addition, the Company has
engaged Morrow & Co. to assist in the solicitation from brokers, bank
nominees and institutional holders for a fee of $5,500 plus out-of-
pocket expenses. The Company expects to mail the notice of meeting,
this proxy statement and the form of proxy to stockholders on or about
March 18, 1999. With this proxy statement, the Company is mailing to
all registered stockholders a copy of the Company's Annual Report
containing financial statements for the calendar year ended December
31, 1998.

Voting Procedure

Stockholders of record at the close of business on March 1, 1999
("record date") are entitled to vote during the 1999 annual meeting and
may cast one vote for each share of the Company's common stock ("Common
Stock") held on the record date on each matter that may properly come
before the meeting. On the record date there were 51,288,549 shares of
Common Stock outstanding.

The holders of a majority of the outstanding shares of Common
Stock must be present or represented at the meeting for there to be a
quorum for the conduct of business. If a quorum is present and/or
represented at the meeting, then the eight nominees for director who
receive the highest numbers of votes of the votes cast will be elected.
A majority of the votes cast will be required to adopt the Furniture
Brands 1999 Long-Term Incentive Plan, to amend the Furniture Brands
Executive Incentive Plan, to ratify the selection of independent
auditors and to take action on such other matters as may properly come
before the meeting. Shares represented by proxies which are marked
"withheld" as applied to voting for directors or "abstain" as to the
other proposals or to deny discretionary authority on any other matters
will be counted as shares present for purposes of determining the
presence of a quorum. Such shares will also be treated as shares
present and entitled to vote, which will have the same effect as a vote
against any such matters. Shares represented by proxy will be voted as
directed on the proxy forms and, if no direction is given, will be
voted for the persons nominated by the Board as directors, in favor of
the other proposals, and in the best judgment of the persons named in
the proxies on such other matters that may properly come before the
meeting. Any proxy given by a stockholder may be revoked at any time
prior to its use by execution of a later dated proxy, by a personal
vote at the meeting, or by written notice to the Secretary of the
Company.<PAGE>

Security Ownership

Table 1 below sets forth information regarding the only firm that
has reported beneficial ownership, including sole voting and investment
power except as otherwise indicated, of more than 5% of the Common
Stock.

TABLE 1

Shares
Beneficially Percent of
Name and Address Class of Stock Owned (a) Class (a)
--------------------------------------------------------------------------

Putman Investments, Inc.(b) Common 2,905,300 5.6%
One Post Office Square
Boston, MA 02109

Neuberger Berman, LLC(c) Common 2,842,300 5.5%
605 Third Avenue
New York, NY 10158

------------------------
</TABLE>

(a) Shares beneficially owned, above and below, are as of January 31,
1999 and as defined by Securities and Exchange Commission ("SEC")
Rule 13d-3 which provides in part that persons are deemed the
beneficial owners of securities if they have or share the power
to vote or dispose of the securities or if they have the right to
acquire the securities within the next sixty days. Accordingly,
included, above and below, in shares beneficially owned are
shares of Common Stock that may be purchased upon exercise of
exercisable stock options, and such shares as may be so purchased
were deemed to be outstanding for purposes of calculating
percentages of outstanding shares.

(b) Shared voting power as to 323,900 shares and shared dispositive
power as to 2,905,300 shares.

(c) Sole voting power as to 221,400 shares, shared voting power as to
2,620,100 shares and shared dispositive power as to 2,842,300
shares.

-------------------------------

Table 2 below sets forth information regarding the beneficial
ownership of Common Stock by directors, nominees for directors,
executive officers named in the Summary Compensation Table below
("Named Executive Officers"), and all directors and executive officers
as a group (15 persons) as of January 31, 1999. Except as noted
below, all such persons possessed sole voting and investment power
with respect to the shares listed. An asterisk (*) in the column
listing the percentage of class indicates that the person
beneficially owned less than 1% of the Common Stock as of January 31,
1999.<PAGE>

TABLE 2

Directors, Nominees Shares
for Directors and Class of Beneficially Percent of
Named Executive Officers Stock Owned (a)(b)(c) Class
----------------------------------------------------------------------
K. B. Bell Common 2,002 *
J. T. Foy Common 116,724 *
W. G. Holliman Common 340,000 *
B. A. Karsh Common 12,002 *
B. B. Kincaid Common 70,000 *
D. E. Lasater Common 7,273 *
L. M. Liberman Common 18,330 *
R. B. Loynd Common 231,400 *
C. J. Pfaff Common 93,600 *
M. Portera Common 793 *
A. E. Suter Common 7,002 *

Directors and
Executive Officers
as a group
(15 persons) Common 1,164,202(d) 2.2%

---------------------

</TABLE>

(a) The shares listed as beneficially owned by Mr. Foy consist of
9,224 shares and exercisable stock options to purchase 107,500
additional shares; the shares listed as beneficially owned by Mr.
Holliman consist of 90,000 shares and exercisable stock options
to purchase 250,000 additional shares; the shares listed as
beneficially owned by Mr. Kincaid consist of exercisable stock
options to purchase such shares; the shares listed as
beneficially owned by Mr. Liberman include 1,000 shares owned in
partnership and 17,330 shares owned in trust; the shares listed
as beneficially owned by Mr. Loynd consist of 71,400 shares and
exercisable stock options to purchase 160,000 additional shares;
the shares listed as beneficially owned by Mr. Pfaff consist of
6,000 shares and exercisable stock options to purchase 87,600
additional shares.

(b) 2,002 shares held by each of Ms. Bell and Messrs. Karsh, Lasater,
Liberman and Suter and 793 shares held by Dr. Portera are shares
of restricted stock issued pursuant to the Company's Restricted
Stock Plan for Outside Directors.

(c) 50,000 shares held by Mr. Holliman and 6,000 shares held by each
of Messrs. Foy and Pfaff are shares of restricted stock issued
pursuant to the Company's 1999 Long-Term Incentive Plan.

(d) The shares listed as beneficially owned by directors and
executive officers as a group consist of 251,302 shares (of which
89,803 are restricted shares) and exercisable stock options to
purchase 912,900 additional shares.<PAGE>

I. Election Of Directors

Nominees

Eight directors are to be elected during the 1999 annual meeting
to serve, subject to their earlier death, resignation or removal, for
terms of one year ending at the 2000 annual meeting or until their
successors are elected and qualify. Certain information regarding the
eight nominees is presented below. Should any nominee become unable or
unwilling to serve, an event not anticipated to occur, proxies (except
proxies marked to the contrary) will be voted for another person
designated by the Board unless the Board shall have reduced the number
of directors to be elected.

Company
Name, Age, Principal Occupation Director
or Position, Other Directorships Since
---------------------------------------------------------------------
Katherine Button Bell, 40 1997
President and Owner of Button
Brand Development, Inc., a
marketing consulting company

Wilbert G. Holliman, 61 1996
Chairman of the Board, President and
Chief Executive Officer of the Company
Director of BancorpSouth, Inc.

Bruce A. Karsh, 43 1992
President and Principal of Oaktree Capital
Management, LLC, an investment management firm
Director of Littelfuse, Inc.

Donald E. Lasater, 73 1970
Retired, formerly Chairman of the Board
and Chief Executive Officer of
Mercantile Bancorporation, Inc., a bank
holding company

Lee M. Liberman, 77 1985
Chairman Emeritus and currently a consultant to
Laclede Gas Company, a gas public utility,
of which he was formerly Chairman of the
Board and Chief Executive Officer
Director of CPI Corporation, D.T. Industries,
Inc. and Falcon Products Company

Richard B. Loynd, 71 1987
Former Chairman of the Board and
currently Chairman of the Executive
Committee
Director of Converse Inc. and
Emerson Electric Co.

Dr. Malcolm Portera, 53
President of Mississippi State University 1998

Albert E. Suter, 63 1997
Senior Vice Chairman and Chief Administrative
Officer of Emerson Electric Co., a manufacturer
of electrical, electromechanical and electronic
products and systems
Director of Emerson Electric Co.

Each of the director nominees has held the same position or other
executive positions with the same employer during the past five years
except: Mr. Karsh who has been associated with Oaktree Capital
Management, Inc. since 1995 and prior thereto was Managing Director of
Trust Company of the West; Ms. Bell who has been associated with
Button Brand Development, Inc. since 1994 and prior thereto was
Executive Director of Marketing Communications for Converse Inc.; and
Dr. Portera who became President of Mississippi State University in
1998. Prior thereto, from 1996 until 1998 he was owner of Portera and
Associates, which provided business development and strategic planning
consulting services to state and local industrial development
organizations, and from 1993 until 1996 he was Vice Chancellor for
External Affairs of the University of Alabama System.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on a review of the copies of forms received by it
and on written representations from certain reporting persons, the
Company believes that during 1998, all Section 16(a) filing
requirements applicable to its directors and officers were complied
with, with the exception of Albert E. Suter who inadvertently filed
one report of one transaction involving a stock purchase late.

Compensation and Organization of Board of Directors

There were six meetings of the Board during the year ended
December 31, 1998, and all nominees who were directors during 1998
were present for at least 75% of the meetings of the Board and
committees of the Board on which they served. Each director who is
not an employee of the Company or of a subsidiary of the Company is
paid a monthly fee of $2,000 and a fee of $1,000 plus expenses for
each meeting of the Board attended, plus an annual award of restricted
shares of Common Stock with a market value on the date of the award of
$25,000. Such restricted stock does not vest and cannot be sold until
the director's retirement or earlier death or disability. There is
also a one year vesting period in the event of resignation for a
reason other than retirement, death or disability. In addition, for
attending a meeting of a committee of the Board each is paid a fee of
$700 plus expenses if the director is a member of the committee, or
$950 plus expenses if the director is the Chairman of the committee.
Such fees are not paid to directors who are employees of the Company
or a subsidiary of the Company.

In addition, the Company has a retirement plan for non-employee
directors. Under the plan, a director who is not an employee of the
Company or of a subsidiary of the Company and who has reached age 62
or older and has served as a director for at least five years will,
after termination of service as a director, receive for life a
percentage of the monthly fee for directors in effect at the time of
termination of service. Currently, only Messrs. Lasater and Liberman<PAGE>

will qualify for benefits under this plan, and after termination of
service as a director each will receive for life 100% of the monthly
fee for directors in effect at the time of termination of service.
Participation in and benefits under the plan have been frozen and
there will be no further vesting or new participants added.

The Board has a number of standing committees, including an Audit
Committee and an Executive Compensation and Stock Option Committee.
The Board does not currently have a Nominating Committee.

The Audit Committee, which currently consists of Mr. Liberman,
Chairman, Mr. Karsh and Dr. Portera and Ms. Bell, met four times
during the year ended December 31, 1998. The Committee recommends the
selection and retention of independent accountants; reviews auditing
and financial accounting and reporting matters, the adequacy of
internal accounting controls and asset security, audit fees and
expenses, and compliance with the code of corporate conduct; and
counsels regarding auditing and financial accounting and reporting
matters.

The Executive Compensation and Stock Option Committee, which
currently consists of Mr. Suter, Chairman, and Messrs. Karsh, Lasater
and Liberman, met six times during the year ended December 31, 1998.
The Committee reviews and approves compensation of officers and
directors; administers supplementary retirement, performance incentive
and stock option plans; and counsels regarding compensation of other
key employees, management development and succession, and major
personnel matters.<PAGE>

Executive Compensation

The following table shows compensation awarded to, earned by or paid
to the Chief Executive Officer and the four most highly compensated
executive officers of the Company other than the Chief Executive
Officer who were serving at December 31, 1998.

SUMMARY COMPENSATION TABLE

Long-Term
Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
-------------
Annual Compensation / Awards /
----------------------------------------------/------------/
/ Other / / All
/ Annual / Securities/ Other
Name and / Salary Bonus Compensation / Underlying/ Compensation
Position Year / $ $ $ / Options # / $(a)
--------------------------------------------------------------------------------------------------------
Wilbert G. Holliman 1998 825,000 628,147 0 0 92,616
Chairman of the Board, 1997 750,000 505,172 0 0 98,842
President and Chief 1996 130,000 1,189,765 0 250,000 35,626
Executive Officer (b)

Richard B. Loynd 1998 1,000,000 0 0 0 96,630
Chairman of the 1997 1,000,000 250,000 0 0 92,078
Executive Committee 1996 710,000 514,324 0 0 71,730
of the Board (c)

John T. Foy 1998 205,000 352,410 0 50,000 21,914
President, Action
Industries, Inc. (d)

Brent B. Kincaid 1998 335,623 281,645 0 0 5,369
President, Broyhill 1997 309,528 256,854 0 0 5,081
Furniture Industries, 1996 282,453 260,000 0 50,000 5,114
Inc. (d)

Christian J. Pfaff 1998 278,100 258,313 0 50,000 20,960
President, Thomasville
Furniture Industries,
Inc. (d)

-----------------<PAGE>

</TABLE>

(a) Amounts shown for 1998 consist of the following: life insurance
premiums for Mr. Loynd $96,630; annual contribution to the
Broyhill Furniture Industries, Inc. Profit Sharing Retirement
Plan for Mr. Kincaid $5,269; "split dollar" life insurance premiums,
substantial percentages of which will be recovered at age 65 or death
of the executive, for Messrs. Holliman, Foy and Pfaff, $92,516,
$21,814 and $20,860, respectively; and a matching contribution of
$100 to a 401(k) savings plan for Messrs. Holliman, Kincaid, Foy
and Pfaff.

(b) Mr. Holliman has an employment agreement with the Company for a term
of two years beginning on January 1, 1999 at an initial salary of
$925,000 per year with an initial target incentive bonus of 70% of
base salary under the Furniture Brands Executive Incentive Plan.
At age 65 he will be entitled to a bonus payment of $1,000,000 per
year for three years.

(c) Mr. Loynd has an employment agreement with the Company for a term of
three years beginning on January 1, 1997 pursuant to which he will
receive $1,000,000 per year in salary.

(d) Mr. Foy has an employment agreement with Action Industries, Inc.
beginning on April 29,1997, and Mr. Pfaff has an employment
agreement with Thomasville Furniture Industries, Inc. beginning
on January 28, 1998. Each of these agreements is for one year
from the date each is terminated other than for cause or as the
result of death or disability. Each shall be entitled to receive
his annual base salary on the date of termination and an amount
equal to his average annual bonus for the three years prior to
termination.

(e) Mr. Kincaid has an employment agreement with Broyhill Furniture
Industries, Inc.("Broyhill"), dated August 1, 1996 pursuant to
which he will continue as an employee of Broyhill at full pay and
with full benefits through July 31, 1999. Mr. Kincaid also has a
consulting agreement with Broyhill, dated May 15, 1995 and
amended on January 29, 1998,whereby he is entitled to receive
$4,167 per month from the date of his retirement until
the date of his death or for a term of ten years from the date of
his death, whichever is later.

----------------<PAGE>

Executive Compensation and Stock Option Committee
Report on Executive Compensation

Among its responsibilities, the Executive Compensation and Stock
Option Committee of the Furniture Brands International, Inc. Board of
Directors has oversight over the Company s executive compensation
programs and reviews and approves the compensation of the executive
officers of the Company and the officers of its primary operating
companies. We also administer the Company s long-term incentive
program. The Committee consists entirely of independent, non-employee
directors.

Our Compensation Philosophy

In our deliberations, we are guided by certain fundamental
considerations, including the need to attract and retain talented key
executives, the need to provide both short- and long-term incentives,
to focus executive performance on the achievement of company
objectives, and the need to provide compensation opportunities that
align executive compensation with the interests of the stockholders.

Beginning in 1997 and continuing through 1998, with the help of
our outside executive compensation consultants, we engaged in a top
to bottom review of the Company s compensation practices as applied
to senior executives. This included a detailed examination of base
pay, annual incentive bonuses, and long-term incentives. We concluded
that compensation packages for senior executives should be structured
in accordance with three principles:

1. Total compensation should be targeted at the 75th percentile
when benchmarked against comparable positions in industry and
when computed based on above-target performance;

2. Future base salary increases will be modest (in the 4.0% to 4.5%
range) in the near term; and

3. Any additional compensation required to achieve the 75th
percentile will be accounted for through the addition of
long-term incentive opportunities.

Proposals for Stockholder Consideration

In furtherance of these objectives, we have approved, as has the
Board of Directors, two matters which are submitted for your
consideration at the 1999 Annual Meeting:

1. The Furniture Brands Executive Incentive Plan. At the 1997
Annual Meeting the stockholders approved the Furniture Brands
Executive Incentive Plan a Plan providing for annual
performance-based incentive bonuses. At the 1999 Annual Meeting
we seek approval of an amendment to that Plan which will
increase the maximum bonus percentage from 50% to 100%. This
will enable us to leverage the annual cash compensation of
senior executives to tie a larger percentage of their cash
compensation to Company performance. We strongly support this
amendment.

2. The Furniture Brands 1999 Long-Term Incentive Plan. This Plan<PAGE>

is the culmination of our exhaustive review of the Company s
long-term incentives, which have previously been provided under
the 1992 Stock Option Plan. Adoption of the new Plan will
enable us to tie an increasing amount of senior executives
total compensation to the market price of the Company s common
stock which we believe will continue to focus senior
executives on stockholder return and will more closely align the
interests of the executives with your interests. We also
strongly support the approval of this Plan.

Base Salaries for 1998

Early in 1998 we reviewed base salaries for all Named Executive
Officers, including Mr. Holliman. Mr. Holliman, whose annual base
salary was set at $750,000 when he became Chief Executive Officer in
October 1996 and had not been adjusted in 1997, was increased by 10%
to $825,000. We make compensation decisions based on an analysis of
the Company's performance, an evaluation of comparative compensation
information, and an evaluation of the performance of executive
officers. The comparative compensation information was compiled by
the Company's outside executive compensation consultants and was used
to determine that the base salaries were both reasonable and
competitive. The Company's performance is evaluated on the basis of
criteria such as return on shareholder's equity, return on assets and
increase in earnings per share. The increase in annual salary rates
for all Named Executive Officers as a group, was based on
recommendations of Mr. Holliman and was designed to adjust for
inflation.

Bonus Compensation for 1998

Existing annual incentive plans for key personnel (including Mr.
Holliman and other Named Executive Officers) were continued in effect
during 1998. These plans utilized sales and earnings as objectives,
with earnings generally weighted more heavily. Under the provisions
of the plan applicable in 1998 to key personnel based at the corporate
offices (including Mr. Holliman), plan participants could earn a bonus
equal to percentages of their base salaries depending totally upon the
Company's degree of achievement against budgeted objectives (sales and
net earnings) which were met in 1997. Mr. Holliman's target bonus
percentage was 50%. Target percentages were payable when objectives
were met; lower or greater percentages (to a maximum of 150% of
target) were payable for degrees of achievement below or above
budgeted objectives.

For 1998, Mr. Holliman earned a bonus of $448,676 under the
Furniture Brands Executive Incentive Plan. That bonus was based on
50% of his base salary ($412,500) multiplied by the percentage of
achievement against target objectives (102.04% on sales and 111.01%
achievement on net earnings, for a blended rate of 108.77%). The
Committee also awarded him an additional bonus in the amount of
$179,471 under the discretionary provisions of the incentive plan in
recognition of his contributions in strategic areas.

Long-Term Incentive Awards in 1998

We believe management's ownership of a significant equity
interest in the Company is a major incentive in building stockholder
value and aligning the long-term incentive program. No stock options
were granted to Mr. Holliman during 1998. Among the other Named<PAGE>

Executive Officers, on January 29, 1998, Mr. Foy and Mr. Pfaff were
each granted an option to purchase 50,000 shares of common stock at
$24.0625 per share, the market price on the date of grant. We
determined the size and terms of these awards subjectively based on
the position, responsibilities and individual performance of Mr. Foy
and Mr. Pfaff.

Limits on Tax Deductibility of Executive Compensation

Under Section 162(m) of the Internal Revenue Code, the Company is
generally precluded from deducting compensation in excess of $1
million per year for its Chief Executive Officer and any of its next
four highest-paid executive officers, unless the payments are made
under qualifying performance-based plans. In years prior to 1997, in
circumstances in which compensation may have exceeded that amount, any
such compensation was deferred under the terms of a written agreement.

In 1995, the Board of Directors adopted, and at the 1997 Annual
Meeting you approved, the Furniture Brands Executive Incentive Plan.
Under the Plan, we have awarded executive officers that we select a
bonus conditioned upon their obtaining objective performance criteria
that we establish. In 1998, the only named executive officer who
participated in the Plan was Mr. Holliman.

We generally intend to pursue a strategy of maximizing the
deductibility of compensation paid to executives. This includes
applying the Furniture Brands Executive Incentive Plan and similar
plans at the Furniture Brands International operating companies to
executives whose compensation for a given year can reasonably be
expected to exceed $1 million.

Conclusion

At the Board of Directors meeting in May 1998, Albert E. Suter
was elected Chairman of this Committee, replacing Donald E. Lasater
who served in that capacity for 18 years. Because of his broad
experience in executive compensation matters at Emerson Electric Co.,
Mr. Suter is uniquely qualified to fill this role. Mr. Lasater will
remain as a member of the Committee, and the Committee and the Board
have expressed their appreciation to him for his years of wise counsel
and dedicated service as Chairman

We believe the Furniture Brands International compensation
programs are well structured and will serve your interests as
stockholders. These programs allow the Company to attract, retain and
motivate exceptional management talent and to compensate executives in
a manner that reflects their contribution to both the short- and long-
term performance of the Company. We will continue to emphasize
performance-based compensation programs that we believe positively
affect stockholder value.

Submitted by the Executive Compensation and Stock Option Committee of
the Furniture Brands International Board of Directors

Albert E. Suter, Chairman
Bruce A. Karsh
Donald E. Lasater
Lee M. Liberman<PAGE>

Compensation Committee Interlocks and Insider Participation

Mr. Loynd, Chairman of the Executive Committe of the Board,
serves on the Board of Directors of Emerson Electric Co. one of whose
executive officers, Albert E. Suter, is Chairman of the Executive
Compensation and Stock Option Committee.

Stock Options

The following table contains information concerning stock option
grants made during the year ended December 31, 1998, pursuant to the
Furniture Brands 1992 Stock Option Plan ("1992 Plan").<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

% of
Total Potential Realizable
Options Value at Assumed Annual
Number of Granted Exercise Rates of Stock Price
Securities to or Appreciation for Option
Underlying Employees Base Term(b)
Options In Fiscal Price Expiration ----------------------------------
Name Granted #(a) Year ($/SH) Date 5%($) 10%($)
----------------------------------------------------------------------------------------------------

J.T. Foy 50,000 11.5 24.0625 01/29/07 663,315 1,633,780

C.J. Pfaff 50,000 11.5 24.0625 01/29/07 663,315 1,633,780

---------------------

(a) The grants become exercisable in cumulative installments and at various dates during 1999-2003,
subject to provisions of the 1992 Plan that would accelerate the exercisability in the event of
a change of control of the Company. As defined, a change of control includes an acquisition by
a person or group of 20% or more of the Common Stock or combined voting power, a change in the
composition of at least a majority of the Board, or stockholder approval of a reorganization,
merger or consolidation resulting in former stockholder's retaining 50% or less of the combined
voting power.

(b) The value, if any, one may realize upon exercise of a stock option depends on the excess of the
then current market value per share over the exercise price per share. There is no assurance
that the values to be realized upon exercise of the stock options listed above will be at or
near the amounts shown.

-----------------<PAGE>

</TABLE>

The following table contains information concerning stock options
exercised during the year ended December 31, 1998 and unexercised stock
options held as of December 31, 1998 pursuant to the 1992 Plan.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES

Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Shares Options at FY-end at FY-End (a)
Acquired Value
on Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
Name # $ # # $ $

W.G. Holliman 0 0 240,000 160,000 4,602,960 2,307,190

R.B. Loynd 50,000 823,035 200,000 0 4,773,400 0

J.T. Foy 0 0 97,500 102,500 1,978,268 972,704

B.B. Kincaid 50,000 1,357,413 110,000 40,000 2,369,610 747,190

C.J. Pfaff 0 0 77,600 97,400 1,626,560 848,595

-----------------------

(a) Based on the $27.25 per share closing price of the Common Stock on the New York Stock Exchange on December 31,
1998.
------------------------<PAGE>

</TABLE>

Retirement Plans

Mr. Holliman is a participant in that segment of the Furniture
Brands Retirement Plan which applies to corporate office employees as
described below for Mr. Loynd. In addition, Mr. Holliman was a
participant, and has a frozen benefit, in the segment of the Furniture
Brands Retirement Plan which applies to employees of Action
Industries, Inc. as described below for Mr. Foy. Mr. Holliman has
eleven years of credited service under the corporate office plan and
28 years under the Action plan segment, which service includes service
with Action Industries prior to its acquisition by the Company. Mr.
Holliman has estimated annual benefits payable at retirement from
these plans, including benefits payable from supplemental plans as
described below, of $260,661, assuming continuation of current covered
compensation.

Mr. Loynd is a participant in that segment of the Furniture
Brands Retirement Plan which applies to corporate office employees.
The plan is a noncontributory, defined benefit pension plan designed
to provide retirement benefits upon normal retirement at age 65.
Covered remuneration is base salary and incentive compensation and,
based on straight life annuity, annual benefits at normal retirement
are equal to the sum of 1.1% of final average compensation (the
highest five consecutive calendar years of the last 10 years)
multiplied by credited service up to a maximum of 35 years and 0.45%
of final average compensation in excess of "covered compensation" as
defined by the IRS multiplied by credited service up to a maximum of
35 years, without deduction for Social Security benefits. Mr. Loynd
has eleven years credited service under the plan and has estimated
annual benefits payable at retirement, including benefits payable from
supplemental plans as described below, of $233,952 assuming
continuation of current covered remuneration.

Mr. Foy is a participant in that segment of the Furniture Brands
Retirement Plan which applies to employees of Action Industries, Inc.
and its subsidiaries. The plan is a noncontributory, defined benefit
pension plan designed to provide retirement benefits upon normal
retirement at age 65. Covered remuneration is base salary and
incentive compensation and, based on a straight life annuity, annual
benefits at normal retirement are equal to the greater of (a) the sum
of 0.65% of an average of the highest five consecutive years (of the
last 10 years) of covered remuneration and 0.65% of the said average
in excess of the greater of (i) 10,000 or (ii) 50% of "covered
compensation" as defined by the IRS, multiplied by years of credited
service (not to exceed 35 years), without deduction for Social
Security benefits, or (b) $28 multiplied by years of credited service.
Mr. Foy has 13 years credited service under the plan, and estimated
annual benefits at normal retirement, including benefits payable from
supplemental plans as described below, of $225,216.

Mr. Pfaff is a participant in that segment of the Furniture
Brands Retirement Plan which is applicable to employees of Thomasville
Furniture Industries, Inc. The Plan is a noncontributory, defined
benefit pension plan designed to provide retirement benefits upon
normal retirement at age 65. Covered remuneration is base salary and
incentive compensation and, based on straight life annuity, annual
benefits at normal retirement are the sum of 1.4% of final average
compensation (the highest five consecutive calendar years of the last
10 years) multiplied by total Thomasville service; less 1.4% of<PAGE>

Primary Social Security multiplied by total Thomasville service with a
maximum offset of 50% of Social Security. Mr. Pfaff has one year of
credited service under the plan and estimated annual benefits at
normal retirement of $33,239. Mr. Pfaff also has a profit sharing
account balance associated with his prior service with Broyhill.

Benefits payable pursuant to provisions of Company-sponsored
retirement plans may be limited by applicable laws and regulations.
Supplemental retirement plans have been adopted providing for payments
from general funds to certain executives, including the Chairman of
the Board and Named Executive Officers, of any retirement income that
would otherwise be payable pursuant to the retirement plans in the
absence of any such limitations. With respect to Mr. Loynd, following
retirement he will also receive under the supplemental plan an amount
equal to the difference, if any, between (i) the benefits he would
have received had he continued until retirement as a participant in
the Converse Inc. Retirement Plan (in which Mr. Loynd was formerly an
active participant) and (ii) the total of the benefits he will receive
from the Converse Inc. Retirement Plan and the Furniture Brands
Retirement Plan. With respect to Messrs. Foy and Kincaid, the
supplemental plans provide for payments, commencing at age 65 after 30
or more years service, equal to the differences, if any, between (i)
the total of the straight life annuities from their base retirement
plans plus social security benefits and (ii) 50% of an average of the
highest five consecutive years (of the last 10 years) of covered
remuneration.

Incentive Agreements

Each of the Named Executive Officers (except Mr. Loynd and Mr.
Kincaid), is a participant in an annual incentive compensation plan
under which the officer may earn a bonus during and payable following
the close of the calendar year ending December 31, 1999, contingent
upon the achievement of certain financial objectives by the Company as
a whole for Mr. Holliman and by their respective operating companies
for Messrs. Foy and Pfaff.

Performance Graph

The following graph shows the cumulative total stockholder
returns (assuming reinvestment of dividends) following assumed
investment of $100 in shares of the Common Stock that were outstanding
on December 31, 1993. The indices shown below are included for
comparative purposes only and do not necessarily reflect the Company's
opinion that such indices are an appropriate measure of the relative
performance of the Common Stock.

/ 12/31/93 / 12/31/94 / 12/31/95 / 12/31/96 / 12/31/97/ 12/31/98/
--------------------------------------------------/---------/----------/----------/----------/----------/---------/
/Furniture Brands International Common Stock o/ 100 / 86 / 114 / 177 / 260 / 345 /
/S&P 500 Index o/ 100 / 98 / 132 / 159 / 208 / 264 /
/Dow Jones Home Furnishings & Appliances Index +/ 100 / 80 / 91 / 97 / 129 / 137 /
------------------------------------------------------------------------------------------------------------------<PAGE>
</TABLE>

II. To Adopt the Furniture Brands International, Inc.
1999 Long-Term Incentive Plan

The purpose of the 1999 Plan is to promote the interests of the
Company and its stockholders by attracting and retaining exceptional
executive personnel and other key employees, by motivating such key
employees to remain in the employ of and work to the best of their
abilities and to encourage ownership of the Company's Common Stock by
such key employees. Approximately 180 key employees are currently
eligible to participate in the 1999 Plan. To make shares available to
meet these purposes, the Board, on January 29, 1999, unanimously
adopted the 1999 Plan. The number of shares of Common Stock which may
be issued under the 1999 Plan is 2,250,000 subject to adjustment upon
the occurrence of contingencies set forth in Section 4(c) of the 1999
Plan. The shares when issued will be, in whole or in part, authorized
but unissued shares or shares held in the treasury. The 1999 Plan
authorizes awards of stock options, Stock Appreciation Rights,
Performance Shares and Restricted Stock. Other equity-based, long-
term incentives may be awarded to key employees of the Company and its
subsidiaries. The complete text of the 1999 Plan is set forth in
Appendix A to this Proxy Statement.

The 1999 Plan is administered by the Executive Compensation and
Stock Option Committee (the "Committee") of the Board of Directors of
the Company. The Committee is determined by the Board but must
consist of two or more non-employee directors. The Committee shall
have the authority, subject to the provisions of the 1999 Plan, to
determine the individuals to whom and the times at which awards shall
be made, the number of shares subject to each award and the terms and
provisions of each award.

Incentive and non-qualified options to purchase shares of Common
Stock may be granted under the 1999 Plan. The purchase price of
options, except for options awarded to replace pre-existing
compensation or benefit programs, must be at least 100% of the fair
market value of the shares subject to the option on the date of grant.
Option prices are payable in full upon the exercise of a stock option
and the proceeds are added to the general funds of the Company. The
Committee will fix the term of each option at the time of award, but
no option may be exercisable after the expiration of ten years from
the date of the award. To date no options have been granted under the
Plan. Options will be exercisable at such time or times, and subject
to such restriction and conditions, as the Committee shall determine.
No option may be exercisable before the first anniversary date of the
award.

Generally, stock options may be exercised only during the term of
employment or within three months following termination of employment.
In the event of the death of an optionee while employed, stock options
may be exercised within one year of such death. In the event of an
optionee's termination by reason of disability stock options may be
exercised within one year of termination. In the event of retirement
of an optionee stock options may be exercised within three years of
retirement. Each stock option will be non-transferable otherwise than
by will or the laws of descent and distribution except that the
Committee may authorize all or part of an option to be granted on
terms which permit transfer to immediate family members, trusts for
the exclusive benefit of immediate family members or partnerships in
which immediate family members are the only partners. <PAGE>

The 1999 Plan authorizes the award of Stock Appreciation Rights,
either on a free-standing basis or in tandem with a stock option
grant. A Tandem Stock Appreciation Right gives the option holder the
right to surrender the related stock option and to receive from the
Company cash 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. A Free-Standing Stock Appreciation Right gives
the participant the right to receive from the Company cash or shares
equal to the excess of the fair market value per share on the date the
right is exercised over a base price established at the time of the
award. Stock Appreciation Rights may be payable in cash or shares or
in any combination thereof. To date no Stock Appreciation Rights have
been awarded.

Performance Shares may also be awarded under the 1999 Plan.
Performance Shares represent the right to receive future payment
contingent on both continuation of service with the Company and the
achievement of specified performance objectives which are established
at the time of the award. No shares will be issued at the time of the
award, but the award will represent the right to receive payment if
the performance objectives are achieved over a period of at least
three years. Payment for Performance Shares may be in cash, shares,
stock equivalent units or in any combination thereof. To date no
Performance Shares have been awarded.

Awards of Restricted Stock may be made under the 1999 Plan.
Each award of Restricted Stock will constitute an immediate transfer
of shares to the participant in consideration of the performance of
services, entitling each participant to voting, dividend and other
ownership rights. Awards are forfeited if the participant resigns or
is discharged, with or without cause, within the restriction period
which shall be no less than three years.<PAGE>

The following table shows the awards of Restricted Stock under
the 1999 Plan.

<S> <C> <C>
NEW PLAN BENEFITS
Furniture Brands International, Inc.
1999 Long-Term Incentive Plan

Dollar Number
Name and Position Value(a) of Shares
----------------------------------------------------------------------
W.G. Holliman
Chairman of the Board,
President and Chief Executive
Officer 1,068,750 50,000

C.J. Pfaff
President, Thomasville Furniture
Industries, Inc. 128,250 6,000

J.T. Foy
President, Action Industries, Inc. 128,250 6,000

Executive Group
(7 persons including 3 named above) 1,688,625 79,000

Non-Executive Director Group 0 0

Non-Executive Officer Employee Group 0 0

--------------------

(a) Based on the $21.375 per share closing price of the Common Stock
on the New York Stock Exchange on February 26, 1999.
--------------------
</TABLE>

In the event of a Change of Control, as defined in Section 11 of
the 1999 Plan, all outstanding stock options and Stock Appreciation
Rights shall become fully exercisable, participants holding
Performance Shares shall be entitled to receive such shares as if the
specified periods had elapsed and the performance objectives had been
fully achieved and the restriction period applicable to outstanding
Restricted Stock shall be deemed to be satisfied.

Lynn Chipperfield, Esq., General Counsel of the Company, has
advised that the federal income tax consequences with respect to
awards under the 1999 Plan are as follows:

(1) with respect to incentive stock options: grants and
exercises thereof are not taxable events; but upon the
subsequent disposition of the shares acquired in an
exercise, the optionee realizes, as long-term capital gain
or loss, the difference between the sale price and the
option price, provided the shares are held by the optionee
for one year after the date of the exercise; but if the
shares are disposed of before the expiration of the one-year
holding period, the optionee realizes ordinary compensation
income at the time of the disposition limited to the lesser<PAGE>

of (a) the gain, if any, or (b) the excess of the fair
market value of the shares at the time the option was
exercised over the option price, and the Company is entitled
to a deduction equal to the ordinary compensation income
realized by the optionee;

(2) with respect to non-qualified stock options: grants thereof
are not taxable events; but upon exercise the optionee
realizes ordinary compensation income in the amount that the
fair market value of the shares so acquired exceeds the
option price and the Company is entitled to a deduction
equal to the ordinary compensation income realized by the
optionee.

(3) with respect to Restricted Stock Awards: grants thereof are
not taxable events; but the fair market value of the shares
are taxed as ordinary compensation on the date the
restriction lapses and the Company is entitled to a
deduction equal to the ordinary compensation realized by the
employee; and

(4) with respect to Performance Shares and Stock Appreciation
Rights: grants thereof are not taxable events; but the
payments are taxed as ordinary compensation when made, and
the Company is entitled to a deduction equal to the ordinary
compensation income realized by the employee.

For the reasons stated in the Report of the Executive
Compensation and Stock Option Committee, the Board of Directors
strongly supports approval of this Plan.

Vote required. Approval of the proposal to adopt the Furniture
Brands International, Inc. 1999 Long-Term Incentive Plan requires the
affirmative votes of the holders of a majority of the outstanding
shares entitled to vote during the annual meeting.

The Board of Directors unanimously recommends a VOTE FOR the
proposal.

III. To Amend the Furniture Brands Executive Incentive Plan
Increasing the Maximum Bonus Percentage from 50% to 100%

On April 29, 1997 the stockholders approved adoption of the
Furniture Brands Executive Incentive Plan (the Incentive Plan ), a
program designed to provide annual incentive compensation to those
management persons at the corporate headquarters of the Company who
directly and substantially influence achievement of certain corporate
goals. The Incentive Plan has been in effect substantially in its
present form since 1995.

The Executive Compensation and Stock Option Committee of the
Board of Directors (the "Committee") sets target bonuses of
participating employees under the Incentive Plan based upon a
percentage of base salary. The plan limits the maximum bonus
percentage to 50%. The amendment will increase that maximum bonus
percentage to 100%. The Incentive Plan provides that no such
amendment may be made without stockholder approval.

As is set forth more fully in the Committee s Report on Executive
Compensation earlier in this proxy statement, the Committee has<PAGE>

determined the best interests of the stockholders will be served if
the compensation of senior level executives of the Company is more
closely tied to performance. For this reason, the Committee has
determined that near-term increases in base salary for senior level
officers will be modest, with all other increases in compensation
being performance based. The proposed 1999 Plan, also described
earlier in this proxy statement, is intended to provide these
performance based incentives over a longer time frame. Shorter term
performance based incentives are provided for in the Incentive Plan.

The Committee believes the current maximum percentage of 50% of
base salary provides insufficient flexibility with respect to the
appropriate mix of base pay and annual incentives. The Committee
believes at the higher corporate levels, an officer s pay should be
more highly leveraged, i.e., a larger percentage of total direct
compensation should be performance based rather than fixed. In some
cases, the Committee may determine that as much as half of a person s
direct compensation will be in the form of incentive bonus rather than
in base salary. Under similar programs currently in effect at two of
the Company s subsidiaries (Broyhill and Thomasville), bonus
percentages as high as 70% have been used with positive results.

If the amendment is approved, Mr. Holliman's target bonus under
the Incentive Plan for 1999 will be 70% of his base salary or
$647,500. Two other executive officers will have target bonuses of
60% of their base salaries or a total of $303,540. The bonuses of
non-executive officers will not be affected by the amendment.

The text of the amended Plan is contained in Appendix B. The
amendment will be effected by changing 50% in Section 5(A)(1) to
100%. The Committee proposes no other changes to the Incentive Plan
at this time.

Vote required. Approval of the proposal to amend the Furniture
Brands Executive Incentive Plan requires the affirmative votes of the
holders of a majority of the outstanding shares entitled to vote
during the annual meeting.

The Board of Directors unanimously recommends a VOTE FOR the proposal.

IV. To Ratify The Selection Of Independent Auditors

Upon recommendation of its Audit Committee, the Board continued
the engagement of KPMG LLP, certified public accountants,
as independent auditors for the calendar year ending December 31,
1999, and has unanimously recommended that the stockholders ratify
that action. A formal statement by representatives of KPMG
LLP is not planned for the annual meeting; however, as in
years past, such representatives are expected to be present during the
meeting and to respond to appropriate questions.

Vote required. A majority of the votes cast during the meeting,
a quorum being present, is required to ratify the engagement.

The Board of Directors unanimously recommends a VOTE FOR
ratification.

V. Stockholder Proposals

Neither the Board nor management knows of any matters other than<PAGE>

those items set forth above that will be presented for consideration
during the 1999 annual meeting. However, if other matters should
properly come before the meeting, it is intended that the persons
named in the proxies will vote, act and consent in accordance with
their best judgment with respect to any such matters.

Stockholder proposals submitted for inclusion in the Company's
proxy materials for the 2000 annual meeting should be addressed to the
Secretary of the Company and must be received at the Company's
executive offices not later than November 18, 1999. Upon receipt of
any such proposal, the Company will determine whether or not to
include such proposal in the proxy statement and proxy form in
accordance with SEC regulations governing the solicitation of proxies.

By order of the Board of Directors

/s/ Lynn Chipperfield

Lynn Chipperfield,
Vice-President and Secretary

St. Louis, Missouri, March 18, 1999.<PAGE>

APPENDIX A

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<PAGE>

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.<PAGE>

(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<PAGE>

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<PAGE>

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<PAGE>

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<PAGE>

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.<PAGE>

(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<PAGE>

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<PAGE>

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<PAGE>

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<PAGE>

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.<PAGE>

APPENDIX B

FURNITURE BRANDS

CORPORATE

EXECUTIVE INCENTIVE PLAN

1. INTRODUCTION

This Executive Incentive Plan (the "Plan") has been designed
for those management persons at the corporate offices of
Furniture Brands International, Inc. ("FBI") who directly and
substantially influence achievement of certain corporate goals.
The Plan provides monetary awards for the achievement of those
goals. In select cases, the Plan provides for additional special
discretionary awards.

FBI believes that the total annual income of key employees
should be influenced by their individual and collective effort,
and that rewards should directly relate to the achievement of
planned, meaningful results. The Plan is in addition to and
assumes the existence of a base salary which is competitive,
equitable, and subject to periodic performance-related
adjustments.

The overall administration and control of the Plan,
including final determination of annual bonus awards to each
participant, is the responsibility of the Executive Compensation
and Stock Option Committee of the FBI Board of Directors (the
"Committee"). The Committee (or a subcommittee thereof which has
been designated by the Committee to administer the Plan) shall
consist solely of three or more members of the FBI Board of
Directors who are "outside directors" as defined in Section
162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder. Members of the
Committee are not eligible to participate in the Plan.

2. OBJECTIVES OF PLAN

A. Objectives. The Plan has been created with several
objectives in mind:

(1) to emphasize achievement of planned strategic
objectives;

(2) to reinforce the importance of annual growth; and

(3) to motivate and challenge participating executives
through meaningful compensation opportunities.

B. Award Achievement. To achieve these objectives, the
Plan is designed to:

(1) provide for monetary awards of significant value
related directly to measurable FBI results;

(2) motivate participating individuals to achieve<PAGE>

results beyond the routine of position responsibilities; and

(3) be appropriate for both the level of
responsibility and total compensation for the position.

Total compensation, resulting from the combination of base
salary and monetary awards under the Plan, is designed to be
competitive with total compensation for similar positions in
American industry.

3. PARTICIPATION

A. Eligibility. Only management persons whose performance
directly and substantially influences the annual results of FBI
will be considered for participation in the Plan. Ordinarily the
extent of such influence will be reflected in the Bonus
Percentage (as herein defined).

B. Participation

(1) At the start of each Plan Year (as herein defined)
FBI management will submit a list of proposed participants and
Bonus Percentages for review and approval by the Committee. The
Committee may in its discretion change the participants and Bonus
Percentages, provided, however, that the Committee shall, within
the first 90 days of each Plan Year, set forth in writing, a
final approved list of participants and Bonus Percentages for
such Plan Year. Such final list of participants and Bonus
Percentages may not thereafter be modified except as provided in
this Plan. With respect to persons who have been determined to
be "covered employees" within the meaning of Code Section
162(m)(3) for such Plan Year (a "Covered Employee"), additional
participation in the Plan during a Plan Year shall be permitted
only in the event of an unusual circumstance, such as a new hire.
Executive officers of the Company may be participants in the Plan
to the extent approved by the Committee.

(2) To earn an award, an individual must be designated
a participant for the Plan Year and must participate effectively
for a minimum of eight full months of the Plan Year.

(3) A participant who has lost time due to illness, or
dies, retires or becomes totally disabled during the Plan Year,
will be considered for an award under the Plan provided that
his/her influence on goal achievement can be identified and that
achievement of results can be measured.

C. Non-Eligibility

(1) Any individual whose employment is terminated at
any time during the Plan Year by reason of voluntary or
encouraged resignation, or who is discharged, will not receive an
award.

(2) Any individual who has been demoted at any time
during the Plan Year to a position not included in the Plan will
not receive an award.

D. Plan Year. The Plan Year will correspond with the FBI
fiscal year.<PAGE>

4. HOW THE PLAN WORKS

A. Plan Factors. There are two factors which will be
measured in order to determine an award: opportunity and FBI
performance.

(1) Opportunity is the potential impact that a
participant may have on the achievement of goals. This is
expressed by the Bonus Percentage.

(2) FBI Performance is the result of achievement.
This is measured by the percentage of attainment of FBI's goals.

B. Setting FBI Goals. At or prior to the beginning of each
Plan Year, FBI management will recommend to the Committee for
approval, one or more objective measurable performance goals for
FBI (the "Goals") for such year, and the weighting to be assigned
to each Goal. The Goals will be based upon one or more of the
following criteria: sales; earnings; earnings per share; pre-tax
earnings; net profits; return on equity; cash flow; debt
reduction; asset management; stock price; market share; costs; or
selling, general and administrative ("SG&A") expenses. The Goals
will be realistic, yet rigorous. They will be attainable, but
attainment will require above average performance. The Committee
may, in its discretion, approve management's recommendations or
change the Goals and/or weightings, provided, however, that the
Company shall, within the first 90 days of the year (or, in the
case of a new hire added to the Plan during the year, before 25%
of such individual's services for the Company for the year has
elapsed), set forth in writing the final approved Goals, the
Minimum Percentages (as herein defined) for such year and the
weighting to be assigned to such Goals.

C. Notification of Participation. Each participant's
target Bonus Percentage will be communicated each Plan Year by
delivery of the Participation Form.

5. MECHANICS OF DETERMINING AWARDS

A. Definitions of Terms

(1) Bonus Percentage. The Bonus Percentage will be
expressed as a
percentage (not less than 10% and not more than 100%) of the
participant's base salary. That percentage will be higher for a
position with significantly greater responsibilities, thus
recognizing the direct relationship between position
responsibility and influence on FBI results. Participants who
are promoted during a Plan Year to a position with a higher Bonus
Percentage will receive a prorated award based on the percentage
of the Plan Year spent in each position.

(2) Aggregate Target Amount. The Aggregate Target
Amount will be expressed as a dollar amount, calculated by<PAGE>

multiplying the participant's base annual salary rate, as in
effect on March 1 of the Plan Year, which has been established at
or before the time of the setting of the Aggregate Target Amount,
by the Bonus Percentage. The result will be the total award to
which the participant will be entitled if FBI achieves 100% of
all Goals for that Plan Year.

(3) Weighted Target Amounts. For each Goal a Weighted
Target Amount will be calculated by multiplying the Aggregate
Target Amount by the weighted percentage applicable to the Goal.
The result for each Goal will be the portion of the total award
to which the participant will be entitled if FBI achieves 100% of
that Goal for that Plan Year. The sum of the Weighted Target
Amounts will equal the Aggregate Target Amount.

B. Mechanics of Determining Awards.

(1) FBI Performance. FBI's performance against the
Goals will be measured by the percentage of achievement of each
Goal. FBI's performance with respect to each Goal will be based
upon audited results.

(2) Achievement of Target. The Plan is designed to
provide the participant with 100% of his/her Weighted Target
Amount with respect to each Goal if FBI achieves 100%
satisfaction of that Goal.

(3) Minimum FBI Performance. Each Plan Year the
Committee will establish a minimum percentage (the "Minimum
Percentage") with respect to each Goal. Achievement below the
Minimum Percentage will result in no award with respect to that
Goal.

Under certain circumstances, the Committee may establish
Goals the achievement of which contemplate reducing rather than
increasing an amount, such as a reduced debt level or reduced
SG&A expenses. In any such case, the percentage which will be
applied to the Weighted Target Amount for such Goal will be
inversely proportional to the performance against the Goal. For
example, if a Goal is a year-end debt amount and the actual year-
end debt is 105% of the Goal, the percentage of Weighted Target
Amount to be paid with respect to that Goal would be 95%. In
these circumstances, the Minimum Percentage will be expressed in
terms of a figure greater than 100%.

(4) Calculation of Award. The percentage of FBI's
achievement of each Goal will be applied to the Weighted Target
Amount for that Goal to determine the amount of the award payable
with respect to that Goal. Awards will be calculated separately
for each Goal, but will be aggregated and paid as one award
check.

(5) Discretion to Increase Award. The Committee
shall, under no circumstances, increase an award granted under<PAGE>

this Section 5 except to the extent permitted under Treasury
Regulation Section 1.162-27(e)(2)(iii).

6. DISCRETIONARY AWARDS PROGRAM.

(1) To recognize special needs, a discretionary awards
program is part of this Plan. Its objective is to recognize the
performance of FBI through a more qualitative evaluation, rather
than a quantitative evaluation. This could occur, for example,
if FBI does not achieve one or more Goals due to business or
economic reasons beyond its control but, given these adverse
circumstances, nonetheless performed well. Under such
circumstances, a special award may be granted at the discretion
of the Committee.

(2) To the extent all or any portion of an award is not
immediately deductible as compensation expense by FBI for federal
income tax purposes, payment of such award or portion thereof, as
the case may be, will be deferred until following termination of
employment of the participant or until such earlier date as the
Committee shall, in its discretion, determine, either at the time
of deferral or thereafter, whereupon such award or any portion
thereof, as the case may be, less appropriate withholdings, will
be paid by check provided that the same shall then have become
immediately deductible as compensation expense by FBI for federal
income tax purposes. Simple interest shall be paid annually on
the deferred compensation at FBI's effective borrowing rate.

(3) Nothing contained in this Section 6 shall be deemed to
permit or provide for discretionary increases in awards payable
to Covered Employees under Section 5 hereof.

7. CERTIFICATION. Before any payments are made under this Plan,
the Committee must certify in writing that the Goals justifying
the payment of an award have been met.

8. PAYMENT OF AWARDS. Except as provided in Section 6 hereof,
awards, to the extent immediately deductible as compensation
expense by FBI for federal income tax purposes, less appropriate
withholdings, will be paid by check as soon as practical after
the audited close of a fiscal year.

9. ADMINISTRATION. Subject to the limitations as herein set
forth, the Committee is authorized and empowered to administer
the Plan; interpret the Plan; establish, modify and grant waivers
of award restrictions; prescribe, amend and rescind rules
relating to the Plan; and determine the rights and obligations of
participants under the Plan. All decisions of the Committee
shall be final and binding upon all parties including the
Company, its stockholders, and its participants.

10. MANNER OF EXERCISE OF COMMITTEE AUTHORITY. The express
grant of any specific power to the Committee and the taking of
any action by the Committee, shall not be construed, as limiting<PAGE>

any power or authority of the Committee. All designations of
participation, bonus percentages, goals, minimum percentages,
aggregate amounts, and certifications of performance shall be in
writing. A writing signed by all members of the Committee shall
constitute the act of the Committee without the necessity, in
such event, to hold a meeting. The Committee may delegate the
authority, subject to such terms as the Committee shall
determine, to perform administrative functions (excluding those
described in the second sentence of this Section 10) under the
Plan.

11. CERTAIN PERFORMANCE BASED AWARD. Any awards under Section 5
hereof are intended to be "qualified performance-based
compensation" within the meaning of Section 162(m) of the Code
and shall be paid solely on account of the attainment of one or
more preestablished, objective performance goals within the
meaning of Section 162(m). If any provision of this Plan does
not comply with the requirements of Section 162(m) of the Code as
then applicable to any employee, such provision shall be
construed or deemed amended to the extent necessary to conform to
such requirements with respect to such employee.

12. NO CONTRACT OF EMPLOYMENT. Participation in the Plan shall
not be considered an agreement to employ a participant for any
period of time or in any position.

13. ASSIGNMENTS AND TRANSFERS. With the exception of transfer
by will or by the laws of descent and distribution, rights under
the Plan may not be transferred or assigned.

14. GOVERNING LAW. The Plan shall be construed, administered
and governed in all respects under and by the applicable internal
laws of the State of Missouri, without giving effect to the
principles of conflicts of law thereof.

15. AMENDMENT AND TERMINATION OF PLAN AND AWARDS. The Board may
amend, alter, suspend, discontinue or terminate the Plan without
the consent of stockholders or participants, except as is
required by any federal or state law or regulation or the rules
of any stock exchange on which the shares of FBI ("Shares") are
listed, or if the Board in its discretion determines that
obtaining such stockholder approval is for any reason advisable,
provided, however, that (i) without the consent of an affected
participant, no amendment, alteration, suspension,
discontinuation, or termination of the Plan may impair the rights
of such participant under any award theretofore granted to such
participant, and (ii) the Plan may not be amended without the
consent of the stockholders of a majority of the Shares then
outstanding to (a) materially modify the requirements as to
eligibility for participation in the Plan, (b) change the
specified performance objectives for payment of awards under
Section 5, (c) increase the maximum award payable under Section
5, (d) withdraw administration of the Plan from the Committee or
(e) extend the period during which awards may be granted.<PAGE>

16. EFFECTIVE DATE OF THE PLAN. The Plan, as amended, shall
become effective on January 1, 1997 provided that the Plan is
approved by the affirmative vote of the holders of a majority of
the Shares present or represented and entitled to vote at the
1997 annual meeting of the stockholders of FBI. The terms of the
Plan shall be perpetual; subject to earlier termination by the
Board pursuant to Section 15, after which no awards may be made
under the Plan, but any such termination shall not affect awards
then outstanding or the authority of the Committee to continue to
administer the Plan.<PAGE>

I. Election of Directors FOR all nominees ---- WITHHOLD AUTHORITY to vote ---- *EXCEPTIONS ----
listed below / / for all nominees listed below / / / /
/ / / / / /
---- ---- ----

Nominees: K.B. Bell, W.G. Holliman, B.A. Karsh, D.E. Lasater, L.M. Liberman, R.B. Loynd, M. Portera and A.E. Suter
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the "Exceptions" box and write that
nominee's name in the space provided below.)

*Exceptions
----------------------------------------------------------------------------------------------------

II. Adoption of Long-Term Incentive Plan;

III. Amendment of Furniture Brands Executive Incentive Plan;
Change of Address and ----
IV. Ratification of Selection of Auditors; and or Comments Mark Here / /
/ /
V. In their discretion, upon such other matters as may properly ----
come before this meeting.
Please sign exactly as name appears hereon.
Executors, Administrators, Trustees, etc.
should so indicate.

Dated: , 1999
-------------------------------

-------------------------------------------
Signature

Votes MUST be indicated ----
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope. (x) in Black or Blue ink. / /
/ /
----
----------------------------------------------------------------------------------------------------------------------
</TABLE>

FURNITURE BRANDS INTERNATIONAL, INC.
Proxy for 1999 Annual Meeting of Stockholders
Proxy Solicited on Behalf of the Board of Directors

The undersigned hereby appoints R.B. Loynd, W.G. Holliman and
L. Chipperfield, and each of them, with power of substitution,
proxy or proxies to represent the undersigned, and to vote all
shares of Common Stock the undersigned would be entitled to vote,
at the Annual Meeting of Stockholders of Furniture Brands
International, Inc. to be held on April 29, 1999, and at any
adjournment thereof, upon the items set forth in the proxy
statement for the meeting and identified below.

The Board of Directors recommends a vote FOR

(Continued, and to be signed and dated on the reverse side)

FURNITURE BRANDS INTERNATIONAL, INC.
P.O. BOX 11246
NEW YORK, N.Y. 10203-0246<PAGE>