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Ethan Allen Interiors: Sandell Comments On Recent Board Changes At Ethan Allen

The following excerpt is from the company's SEC filing.

Belated and Transparent Attempt to Address Years of Governance Failings Falls Short of Real Change Needed at Ethan Allen

Farooq Kathwari Granted Five-Year Employment Agreement; Represents Continuation of “Imperial CEO” Status Quo

Sandell Launches “Redesign Ethan Allen” Website

- Sandell Asset Management Corp. (“Sandell”), a large shareholder of Ethan Allen Interiors Inc. (“Ethan Allen” or the “Company”) (NYSE:ETH), has issued the following statement after reviewing recent announcements by Ethan Allen:

We believe the announcement by Ethan Allen on Octobe r 1 of the upcoming retirement of Frank Wisner and Kristin Gamble, two long-tenured Directors who have served on the Board of Directors (the “Board”) for 14 years and 23 years, respectively, is a self-serving and transparent attempt to address but one of the numerous governance failings that we have pointed out at the Company. Notably, this is yet another example of Farooq Kathwari and the Board that he chairs being reactive, not proactive, as this step was taken only after the nomination of Sandell’s highly-qualified and experienced slate of Director candidates and our firm’s public condemnation of what we believe to be the Company’s stale and entrenched Board and other poor governance practices. Shareholders should not be misled by what in our opinion is the Company’s superficial ploy to portray itself as embracing good governance practices – this is clearly too little, too late. To make a home design analogy, we believe these actions are the equivalent of Ethan Allen putting a fresh coat of paint on a house whose walls are cracked and whose foundation is sagging and attempting to pass it off as a new home.

Furthermore, we question the ability of the two new Directors, Domenick Esposito and Tara Stacom, that Ethan Allen has recently appointed to replace these “retiring” Directors, to effectively serve as a counter-weight to the will of Mr. Kathwari. As evidence of our concerns, we note that on October 2, Ethan Allen disclosed that Farooq Kathwari, the Company’s 71-year old Chairman, President...