Flexsteel Announces Inducement Grant Under Nasdaq Listing Rule 5635(c)(4)

DUBUQUE, Iowa–(BUSINESS WIRE)–Flexsteel Industries, Inc., (the “Company”) (NASDAQ: FLXS) today
announced that the Company granted Jerald K. Dittmer, in connection with
his appointment as the Company’s President and Chief Executive Officer,
an option to purchase 55,000 shares of the Company’s common stock with a
per share exercise price of $21.96, the closing trading price of the
Company’s common stock on the grant date of December 28, 2018. The stock
option vests one third on each of July 1, 2019, July 1, 2020 and July 1,
2021 and has a ten-year term. The stock option was granted outside of
the Company’s Omnibus Stock Plan in accordance with Nasdaq Listing Rule
5635(c)(4) as an inducement material to Mr. Dittmer entering into
employment with the Company. This option grant was previously disclosed,
as part of the terms of Mr. Dittmer’s Employment Agreement dated
December 17, 2018, in a Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 20, 2018.

About Flexsteel

Flexsteel Industries, Inc. and Subsidiaries (the “Company”) incorporated
in 1929 is celebrating its 125th anniversary of the Company’s
founding in 1893. Flexsteel Industries, Inc. is one of the oldest and
largest manufacturers, importers and marketers of residential and
contract upholstered and wooden furniture products in the United States.
Over the generations the Company has built a committed retail and
consumer following based on its patented, guaranteed-for-life Blue Steel
Spring™ – the all-riveted, high-carbon, steel-banded seating platform
that gives upholstered and leather furniture the strength and comfort to
last a lifetime. With offerings for use in home, hotel, healthcare,
recreational vehicle, marine and office, the Company distributes its
furniture throughout the United States Canada through the Company’s
sales force and various independent representatives.

Forward-Looking Statements

Statements, including those in this release, which are not historical or
current facts, are “forward-looking statements” made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995. There are certain important factors that could cause our
results to differ materially from those anticipated by some of the
statements made herein. Investors are cautioned that all forward-looking
statements involve risk and uncertainty. Some of the factors that could
affect results are the cyclical nature of the furniture industry, supply
chain disruptions, litigation, product recalls, the effectiveness of new
product introductions and distribution channels, the product mix of
sales, pricing pressures, the cost of raw materials and fuel, retention
and recruitment of key employees, actions by governments including laws,
regulations, taxes and tariffs, inflation, the amount of sales generated
and the profit margins thereon, competition (both U.S. and foreign),
credit exposure with customers, participation in multi-employer pension
plans and general economic conditions. For further information regarding
these risks and uncertainties, see the “Risk Factors” section in Item 1A
of our most recent Annual Report on Form 10-K.

For more information, visit our web site at http://www.flexsteel.com.