Corporate Citizenship and Community Relations "community involvement is a part of our culture." The Importance of Community Community involvement is an absolute must. We have tremendous credibility in our communities and with our clients, which we believe is a direct result of the credibility we in the Ethan Allen community have with one another. As Chairman, President and CEO, Farooq Kathwari sets an example with his personal community leadership activities and encourages the leaders of the local manufacturing, logistics, and Design Centers to set an example as leaders in their communities. Our people are big champions of the causes that matter most to them and their local communities. In some communities where we have manufacturing facilities, we are the largest employer in the area, and at all levels of the company we take that responsibility very seriously. We are part of hundreds of communities in North America; we are deeply involved in them. And in many countries around the world, we have associates and business partners who are deeply involved in their communities as well. For more information on Farooq Kathwari’s leadership activities please go to his personal website, www.farooqkathwari.com. "our integrated company-wide environment, health, and safety initiatives." Environment, Health, and Safety It is Ethan Allen’s policy to ensure that every operating division makes it a priority to provide a safe workplace and protect the natural environment for the benefit of our employees, the community, and the company. Fulfilling this policy is a commitment shared at all levels of the company. We are committed to environmental leadership through sound practices, in the fields of environment, health, and safety. Through our Environment, Health and Safety (EH&S) Management Standard and by applying a process of continuous improvement, we identify and eliminate potential hazards, liabilities, and risks that may be associated with our operations. Management Ethan Allen’s EH&S Management Standard provides the systematic framework through which Ethan Allen incorporates worker health and safety and the protection of the environment into its business practices and operations. We actively share information with industry, employees, and community regarding the promotion of environmental issues and protection of the environment. We have participated with the EPA on several initiatives. Waste Minimization and Pollution Prevention We use a number of methods to reduce, control, and/or eliminate the release of pollutants into the environment during finishing, milling, and other furniture manufacturing processes. Ethan Allen believes that ecologically sound practices and procedures not only help the environment but often reduce costs as well. Recycling Recycling is an essential part of the overall plan for reducing the amount of waste generated by our business. Ethan Allen has instituted a recycling program throughout its operations. Technology New and innovative technology continues to be evaluated and applied to our manufacturing processes. These new technologies have led to improved efficiencies in production as well as provided the methods to reduce, control, and/or eliminate environmental emissions. Innovative technologies may include, but are not limited to: high pressure/low volume spray equipment, ultraviolet finishes, flat line roll coating, and water-based finishes. Energy Conservation We have instituted proven practices to conserve energy. We burn our wood waste from our manufacturing processes to produce steam and heat at many locations. Many air heaters used in our facilities run on an efficient, convection type of heat that reduces energy demands. In some of our manufacturing locations, we produce electricity with the excess steam generated from the burning of wood waste. Chemical Substitution Ethan Allen has traditionally worked with our chemical suppliers to reduce, control, and/or eliminate the types of chemicals used in the finish materials (sprayed onto our products) that cause air emissions. Through strong partnerships with our chemical suppliers, we have reduced the toxicity and hazards of their chemicals, thus protecting our employees and further reducing emissions from our processes. We apply water-based coatings to our products where appropriate. We have established practices to reduce toxic chemicals in our packaging materials. We have eliminated the use of chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) in our packaging material and have substituted water-based material for the solvent-based foam. Brownfield Economic Redevelopment Initiative The EPA’s Brownfield Economic Redevelopment Initiative is designed as an economic redevelopment or reuse program for sites that have actual or perceived contamination. Ethan Allen was one of the first companies in Vermont and Virginia to engage in the Brownfield and associated programs. CertiPUR-US® Certified Foam We use only CertiPUR-US certified foams in our mattresses and custom upholstery. This means that all foams used in our custom upholstery and mattresses have been rigorously tested and certified by an independent, accredited laboratory to meet specific criteria for physical performance, content, and emissions, as described in the U.S. Voluntary Physical Performance and Environmental Certification Guidelines for Flexible Polyurethane Foam for Use in Furniture and Bedding items. CertiPUR-US certified foams are low-VOC emission materials that are made without formaldehyde, mercury, lead, heavy metals, PBDEs, ozone depleters, or prohibited phthalates. "our future depends on healthy, well-managed forests." Our Forestry Practices Ethan Allen’s future depends on healthy, well-managed forests. Our Log and Lumber Director is a professionally trained and experienced forester, and most of Ethan Allen’s lumber requirements are satisfied with native hardwood species, including soft and hard maple, black cherry, ash, and yellow birch. These trees regenerate naturally by seeding and by stump and root sprouts. Because of this natural regeneration, hardwoods do not have to be planted. In fact, the natural regeneration often has to be thinned because it becomes too dense. There is approximately 82% more hardwood stock today than there was in 1952. Although Ethan Allen owns very little timberland, we encourage our suppliers to practice scientifically sound forest management on theirs. Much of our lumber comes from lands that are intensively managed by professional foresters on a sustained yield basis. These forest managers create conditions that are favorable for producing the type of high-quality timber we require for our furniture. We work very closely with these suppliers to achieve a climate that provides for a balanced and fully integrated use of the resource. We also work very closely with our suppliers of nonnative species, such as mahogany, to ensure that the lumber we obtain has been legally harvested from properly managed forests. Our Commitment to Environmental Protection Ethan Allen established its formal Environmental Health & Safety (EH&S) management system in 1999, and since then, we have set—and surpassed—increasingly high standards in environmental stewardship. We are continually striving to reduce how much energy we consume and waste we produce and to increase how much water we save and material we recycle. All of our manufacturing facilities in the United States are registered with the Enhancing Furniture’s Environmental Culture (EFEC) program. Launched by the American Home Furnishings Alliance (AHFA) in 1999, EFEC is an environmental management system that requires companies to analyze and better understand the environmental impact of their processes, raw materials, and finished products. Our registration is contingent upon a policy of continuous improvement in the areas of water and energy conservation, recycling, and waste reduction. We continually evaluate new technologies to see whether they can be applied to improve our manufacturing processes. The new technologies we have embraced have allowed us to manufacture more efficiently and provided means to reduce, control, and/or eliminate our environmental emissions. We have made strides in minimizing use of chemicals in finishes that produce toxic air emissions and have eliminated the use of chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) in our packaging material entirely. Of all our environmental efforts, we perhaps most proud of the successes we have had in our U.S. manufacturing plants in Vermont. All of the scrap wood and sawdust we produce there is now used to fuel the boilers that heat those facilities, thus reducing the carbon footprints of both. At our sawmill facility in Beecher Falls, VT, steam from those boilers also heats the kilns we use to dry the wood to the proper moisture content before it is turned into furniture and excess steam creates electricity. At our Orleans plant, we recycle nearly everything; over the past six years, we have reduced the amount of landfill waste we produce by more than seventy percent—and we don’t plan to stop there. In the near future, two of our distribution centers and about twenty of our retail service centers will also be participating in the EFEC program. Eventually, we plan to implement EFEC in all of our retail locations and to pursue Sustainable by Design (SBD) certification, for which we will not only be developing strategies for reducing the carbon footprints of all of our facilities but also establishing social responsibility programs that include codes of conduct for all of our overseas suppliers. Recognition for Our Efforts We have been recognized by several organizations for our environmental protection efforts: 2013 Vermont Governor’s Award for Environmental Excellence for reducing our fossil fuel oil use to near zero through increased recycling of sawdust, chips, and wood scrap and increasing recycling in general to reduce land-fill waste. Designated a Vermont Business Partner in 2013 by the Vermont Department of Environmental Conservation for our commitment to preserving Vermont’s environment. 2012 Environmental Leadership Award and 2012 Environmental Excellence Award by the American Home Furnishings Alliance (AHFA) for demonstrating exemplary environmental management and ongoing stewardship. Certificate of Environmental Stewardship in 2012 by the New Jersey Department of Environmental Protection’s (NJDEP) Environmental Stewardship Initiative for voluntary measures taken to improve the environment and ensure a sustainable future in our manufacturing facility in Passaic. Congressional Certificate of Special Recognition in 2012 by Congressman Christopher Murphy of the 5th Congressional District in Connecticut for our dedication to improving the environmental effects of our business operations. Sage Awards Honorable Mention in 2012 by AHFA for continually striving to achieve the highest levels of environmental stewardship. Outstanding Use of Wood Award in 2011 by the Northeastern Loggers Association (NELA) for our use of manufacturing byproducts to minimize oil consumption in our Vermont facilities. 2011 Environmental Merit Award by the New England office of the U.S. Environmental Protection Agency (EPA) for establishing practices that minimize hazardous air pollutant emissions. 2009 Vermont Governor’s Award for Environmental Excellence and Pollution Prevention for improvements in material formulation and electricity usage reduction.