Fiscal year _____ cycle of the
LA-Z-BOY INCORPORATED 2010 OMNIBUS INCENTIVE PLAN
Agreement made effective ___________ (the "Grant Date") between La-Z-Boy Incorporated (the "Company") and Name (the "Employee").
This Agreement confirms grants to the undersigned Employee of Option Awards and conditional Performance Awards, and outlines terms of Short-term Cash Incentive award payable to such Employee pursuant to and subject to all terms and conditions of the La-Z-Boy Incorporated 2010 Omnibus Incentive Plan ("Plan"), as approved by the Company153s shareholders on August 18, 2010. This Agreement is also subject to the award notification letter dated ______________ ("Notification") as well as the applicable specific and general conditions set forth in attached Appendix A.
The principal features of the foregoing grants and award are as follows:
"OPTION DATE" is ___________
TOTAL SHARES SUBJECT TO PURCHASE OPTION: «FY10_NQSOs »
SCHEDULED VESTING DATES
NO. OF SHARES / PRICE PER SHARE:
«Options_vested_each_year » / $X.00
«Options_vested_each_year » / $X.00
«Options_vested_each_year » / $X.00
«Options_vested_each_year » / $X.00
All options not exercised by ___________ shall be forfeited.
Performance Award Shares (___________ Cycle)
MAXIMUM PERFORMANCE AWARD SHARES*
TARGET PERFORMANCE AWARD SHARES*
* Subject to attainment of Sales Growth and/or Earnings Per Share Performance Goals.
Short Term Incentive Award
The incentive payment you receive will be determined by multiplying (a) your Eligible Earnings (base compensation, including vacation and holiday pay, earned during the fiscal year), times (b) your Target Short-Term Cash Incentive Opportunity shown below, times (c) the Company Achievement Percentage, which will be determined by how your business unit performs in «Goals » during the fiscal year.
PERFORMANCE PERIOD: Fiscal Year _____
TARGET SHORT-TERM CASH INCENTIVE OPPORTUNITY: _____% of Eligible Earnings
COMPANY ACHIEVEMENT PERCENTAGE RANGE: 0% - 200%
Your signature below indicates your agreement that the foregoing grants and award are subject to all of the terms and conditions contained in the Plan, in attached Appendix A as well as in the accompanying Notification. Your signature below also indicates that you have received and read a copy of the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated by reference. In the event of a conflict between any term or provision contained in this Agreement and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
Chief Executive Officer
APPENDIX A - TERMS AND CONDITIONS
Terms not defined in this Appendix A are, where applicable, defined as in the Plan.
A. Exercising Options
Subject to the terms of Section 13 (Payment) and Section 18.3 (Withholding Taxes) of the Plan, you may exercise Options that have vested by delivering a notice of exercise as described in Section 5 of this Appendix A. When you exercise an Option, you pay the grant price for Company stock. You may retain the stock (and, if you choose, sell it at a later date), or you may direct that the stock be sold immediately. The Company has engaged Merrill Lynch to provide services for exercising Options.
You may exercise options in one of three ways:
(a) Cash Purchase Exercise
You pay the grant price multiplied by the number of shares covered by the Options you are exercising, plus applicable taxes by (i) sending a check or wiring funds to Merrill Lynch or (ii) having sufficient funds in your Merrill Lynch account before you deliver notice of exercise. All of the shares covered by the Options being exercised are credited to your Merrill Lynch account.
(b) Cashless Exercise
You may exercise your Options without any initial cash outlay. There are two methods of cashless exercise:
(i) Cashless Hold - Merrill Lynch sells enough shares covered by the Options you are exercising to purchase all of the shares covered by the Options being exercised and to pay applicable taxes, costs, and fees. The remaining shares are credited to your Merrill Lynch account.
(ii) Cashless Sell - Merrill Lynch sells all shares covered by the Options you are exercising, deducts the cost of the stock you purchased plus applicable taxes, costs, and fees, and sends you a check or wires the net proceeds to your bank account.
(c) Stock Swap
You may exercise your Options by delivering to Merrill Lynch shares of Company stock that you have owned for at least six months, duly endorsed for transfer to the Company, having a fair market value on the date you deliver it equal to the grant price multiplied by the number of shares covered by the Options you are exercising, plus applicable taxes.
You have access to the secure Benefits OnLine ® website at www.benefits.ml.com. Benefits OnLine provides grant summaries, modeling, and the ability to exercise options and direct that stock be sold. The Company153s executive officers and other Section 16 Insiders are required to open brokerage accounts and conduct equity award transactions through The Findley-Wise Group, the Merrill Lynch Financial Advisor team designated to service the accounts.
B. Termination of Options
The Options granted by this Agreement will terminate and be of no force or effect at the close of business on the ten-year anniversary of the date they are granted, unless they terminate earlier as provided below.
If you cease to be employed by the Company or one of its Affiliates, your Options will terminate or be exercisable as follows:
Termination of employment. If you cease to be an Employee for any reason other than your retirement, death, or Disability as described below, your unvested Options will immediately terminate and your vested Options will automatically terminate thirty (30) days after you cease to be an Employee except for any Options that expire earlier by their terms. For purposes of this Agreement, the following are not deemed to be a termination of employment: (i) a transfer from the Company to one of its Affiliates, from an Affiliate to the Company, or between Affiliates; or (ii) a leave of absence authorized by the Company or an Affiliate. For purposes of the Plan, termination of employment will be deemed to occur on the date on which you are no longer obligated to perform services for the Company or any of its Affiliates and your right to reemployment is not guaranteed either by statute or contract, regardless of whether you continue to receive compensation from the Company or any of its Affiliates.
Retirement. For purposes of this Agreement, "Retire" means that you are at least 55 years old, have been employed by the Company or an Affiliate for at least 10 years, and retire with the Company153s consent. If you Retire, all of your unvested Options will immediately fully vest, and you may exercise your Options during the following 12 months except for Options that expire earlier by their terms.
Death or Disability. If you cease to be an Employee because you die or you become Disabled as defined by the Plan, all of your unvested Options will immediately fully vest, and you (or your beneficiary or personal representative) may exercise your Options during the 12 months after you become Disabled or die (whichever occurs first) except for Options that expire earlier by their terms.
Termination of Employment. If you cease to be an Employee other than because you die or become Disabled, you forfeit any Restricted Stock that has not vested, or for which applicable restrictions and conditions have not lapsed, and you have no further rights with respect to your Award of Restricted Stock. If you die or become Disabled during the applicable restriction period, all of your Restricted Stock will immediately vest and all transfer restrictions imposed by the Plan or this Agreement will immediately terminate.
Termination of Employment. You will not be entitled to receive any Performance Shares if, except in the circumstances described below, you cease to be an Employee before the end of the three-year performance period.
Disability or Retirement. Unless the Company153s Compensation Committee in its discretion determines otherwise, if, before the expiration of the three-year performance period, you become Disabled, you will receive payout on Awards granted at least one year earlier, prorated based on the portion of the performance period during which you were actively employed by the Company and on the Company153s performance up to the termination of such active employment. If you Retire before the expiration of the three-year performance period and if the Compensation Committee determines that payment of a prorated award will be deductible compensation for Federal Income Tax purposes, then, in the discretion of the Compensation Committee, you may receive full or partial payout on Awards granted at least one year earlier, prorated based on the portion of the performance period during which you were actively employed by the Company and on the Company153s performance up to the termination of such active employment. Any payout will occur following the conclusion of the three-year performance period.
Death. If you die before the end of the three-year performance period, the Compensation Committee, in its discretion, may provide for payment of Performance Shares. If it does so, then in lieu of payment at the end of the three-year performance period and subject to the Compensation Committee153s approval, the personal representative of your estate may request payment of 35% of the maximum Performance Shares available under your Award if your last day of active employment occurred during the first half of the three-year performance period or 50% of the maximum Performance Shares if your last day of active employment occurred during the second half of the performance period.
Short-Term Cash Incentive (Management Incentive Program)
Termination of Employment. Except in the circumstances described below, you must be actively employed on the last day of the Fiscal Year to be eligible to receive payment of the short-term cash incentive (under the Management Incentive Program, or "MIP").
Disability or Retirement. If you Retire or became Disabled during the Fiscal Year, you will be entitled to receive payment based on your Eligible Earnings during the year, but only to the extent that, in the opinion of the Company153s legal counsel, such payment would not adversely affect the deductibility of your MIP payment under applicable law and published guidance.
Death. If you die during or after the Fiscal Year before receiving a MIP payment that you would otherwise receive, payment based on your Eligible Earnings will be made to your estate.
Approved Leave of Absence. Being on an approved leave of absence (including workers compensation leave, military leave, or leave approved pursuant to the Family and Medical Leave Act), does not affect your eligibility to receive a MIP payment based on your Eligible Earnings during the fiscal year.
Any notice under this Agreement to the Company should be addressed to La-Z-Boy Incorporated in care of its Secretary at 1284 N. Telegraph, Monroe, Michigan 48162 and to you at the address appearing in the Company153s personnel records, or to either party at a different address that the party designates in writing to the other party. Any such notice will be deemed effective when received.