EX-10.1






EXHIBIT 10.1




LA-Z-BOY INCORPORATED

DEFERRED STOCK UNIT PLAN FOR NON-EMPLOYEE DIRECTORS




     La-Z-Boy Incorporated, a Michigan corporation (the “Company”), has adopted this Deferred Stock
Unit Plan for Non-Employee Directors (the “Plan”).



ARTICLE I

INTRODUCTION




     1.1. Purposes. The purposes of the Plan are to enhance the Company’s ability to attract and
retain highly qualified non-employees to serve as directors of the Company and to strengthen the
commonality of interest between the Company’s directors and shareholders by providing directors
compensation based on the value of the Company’s common stock.



     1.2. Effective Date. The Plan is effective as of August 1, 2008 (the “Effective Date”).



ARTICLE II

DEFINITIONS




     In this Plan, the following definitions apply:



     2.1. “Account” means a bookkeeping account established for a Participant pursuant to Section
5.1.



     2.2. “Award” means an award granted pursuant to this Plan.



     2.3. “Beneficiary” shall mean a Participant’s beneficiary, designated in writing and in a form
and manner satisfactory to the Committee, or if a Participant fails to designate a beneficiary or
the Participant’s designated Beneficiary predeceases the Participant, the Participant’s estate.



     2.4. “Board” means the Board of Directors of the Company.



     2.5. “Closing Price” means, with respect to any date specified by the Plan, the price at which
the Common Stock last traded during normal trading hours on the New York Stock Exchange (or, if the
Common Stock no longer trades on the New York Stock Exchange, then on a comparable exchange) on
such date, or if there was no reported sale of Common Stock on such date, on the next preceding day
on which there was such a reported sale. In the event the Common Stock permanently ceases trading
on the New York Stock Exchange or comparable exchange, including by virtue of acquisition or merger
into an acquiring corporation, then as of such event, “Closing Price” shall mean the price at which
the Company’s Common Stock last traded during normal trading hours prior to the day of such event.



     2.6 “Committee” means the Compensation Committee of the Board.



     2.7. “Common Stock” means common shares of stock of the Company.



 









 





     2.8. “Non-Employee Director” means any member of the Board who is not also an employee of the
Company or of an affiliate of the Company.



     2.9. “Participant” means each Non-Employee Director who has accepted an award granted under
the Plan, and, upon the death of any Non-Employee Director, such Non-Employee Director’s
Beneficiary.



     2.10. “Payment Commencement Date” means the first business day of the first month following
the month in which a Participant ceases to be a Non-Employee Director and incurs a separation from
service within the meaning of Internal Revenue Code section 409A, including as a result of such
Participant’s death.



     2.11. “Stock Unit” means a hypothetical share of the Company’s Common Stock as described in
Section 5.2.



ARTICLE III

ADMINISTRATION




     3.1. In General. The Plan shall be administered by the Committee, which shall have the
discretionary authority to interpret the Plan and to decide any and all matters arising under the
Plan, including, without limitation, the authority to determine eligibility for participation,
benefits, and other rights under the Plan, the persons who shall receive Awards, the time when
Awards shall be granted, the terms of such Awards, the number of Stock Units subject to such
Awards, whether any election or notice requirement or other administrative procedure under the Plan
has been adequately observed, the proper recipient of any distribution under the Plan; the
authority to remedy possible ambiguities, inconsistencies, or omissions by general rule or
particular decision; and the authority otherwise to interpret the Plan in accordance with its
terms. The Committee is authorized, subject to the provisions of the Plan, to establish such rules
and regulations as it deems necessary for the proper administration of the Plan and to make such
determinations and interpretations and to take such action in connection with the Plan and any
Award granted thereunder as it deems necessary or advisable. All determinations and
interpretations made by the Committee shall be final, binding, and conclusive on all grantees and
on their legal representatives and beneficiaries. The Committee may allocate its responsibilities
under the Plan among its members and may delegate to officers or other employees of the Company any
and all authority with which it is vested under the Plan. Notwithstanding anything to the contrary
contained herein, the Board may, in its sole discretion, at any time and from time to time, grant
Awards or administer the Plan, in which case the Board shall have all of the authority and
responsibility granted to the Committee herein.



     3.2. Plan Amendment and Termination. Subject to Section 7.8, the Committee may amend any
grant made hereunder and may amend, suspend, or terminate the Plan at any time; provided that no
amendment, suspension, or termination of the Plan shall, without a Participant’s consent, reduce
the Participant’s benefits accrued under the Plan before the date of such amendment, suspension, or
termination. If the Plan is terminated in accordance with this Section, the terms of the Plan as
in effect immediately before termination shall determine the right to payment in respect of any
amounts that remain credited to a Participant’s Account upon termination.



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ARTICLE IV

ELIGIBILITY AND AWARDS




     At any time on or after the Effective Date, the Committee may make an award hereunder to any
Non-Employee Director in such amount and subject to such terms and conditions as the Committee in
its discretion determines. In making Awards to Participants, the Company will credit to the
Account of each Participant the number of Stock Units awarded to such Participant. On the date of
grant of any award hereunder, each recipient’s eligibility will be determined as of such date.



ARTICLE V

ACCOUNTS AND INVESTMENTS




     5.1. Accounts. A separate Account under the Plan shall be established for each Participant.
Such Account shall be credited with the number of Stock Units granted in accordance with this
Article and shall be adjusted as necessary to comply with the terms of this Plan (including, but
not limited to, adjustments for Stock Units as provided in Section 5.2, below). Within each
Participant’s Account, separate subaccounts shall be maintained to the extent the Committee
determines them to be necessary or useful in the administration of the Plan. The payment amount
ultimately made to a Participant will be determined at the time of distribution as provided herein
and the actual cash payment may be greater or less than the cash equivalent value of the Stock
Units at the time of grant, depending on the trading price of Common Stock.



     5.2. Hypothetical Nature of Accounts and Investments. Each Account established under this
Plan shall be maintained for bookkeeping purposes only. Neither the Plan nor any of the Accounts
established under the Plan will hold any actual funds or assets. The Stock Units established
hereunder shall be used solely to determine the amounts to be paid hereunder in cash, shall not be
or represent an equity security of the Company, shall not be convertible into or otherwise entitle
a Participant to acquire an equity security of the Company and shall not carry any voting or
dividend rights.



     5.3. Stock Units.


Simulated Investment in Common Stock. Except as otherwise provided herein, a Participant’s
Account shall consist of Stock Units each of which shall be equivalent in value to the fair market
value of one share of Common Stock in accordance with the following rules:





          (1) Conversion into Stock Units. The Committee may grant awards denominated either as
Stock Units or as cash. If such awards granted are denominated in cash, the amount awarded
shall be converted as of the grant date, for purposes of Participants’ Accounts, into Stock
Units by dividing the amount of cash awarded by the Closing Price on the date of grant. No
fractional Stock Units will be credited hereunder to an Account, and any fractional Stock Unit
that otherwise would be credited shall be rounded up to the nearest whole number.



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          (2) Conversion Out of Stock Units. When any payment is made hereunder, the dollar value of
the Stock Units credited to a Participant’s Account on such date that are being converted into
cash shall be determined by multiplying the number of affected Stock Units by the Closing Price
on the immediately preceding trading date, and the Account subsequently reduced by the number of
Stock Units paid out.




          (3) Effect of Recapitalization or Other Corporate Event. In the event of a transaction or
event described in this subparagraph (3), the number of Stock Units credited to a Participant’s
Account shall be adjusted in such manner as the Committee, in its sole discretion, deems
equitable. A transaction or event is described in this subparagraph (3) if (i) it is a dividend
(other than regular quarterly dividends) or other distribution (whether in the form of cash,
shares, other securities, or other property), extraordinary cash dividend, recapitalization,
stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
repurchase, or exchange of shares or other securities, the issuance or exercisability of stock
purchase rights, the issuance of warrants or other rights to purchase shares or other
securities, or other similar corporate transaction or event and (ii) the Committee determines
that such transaction or event affects the shares of Common Stock, such that an adjustment
pursuant to this subparagraph (3) is appropriate to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan. If the Common
Stock ceases to be traded publicly, the value of Participants’ Accounts will be fixed in a
manner the Committee deems appropriate and payments based on such value thereafter made as set
forth in Sections 6.2 and 6.3 below.



     5.4. Dividend Equivalents. Participants’ Accounts will not be adjusted as a result of any
quarterly dividends paid on Common Stock. When, however, the Company pays any quarterly dividends
to holders of Common Stock, the Company may, in its discretion, make cash payments to each
Participant equal to the cash dividends that would otherwise be paid if the Stock Units then in
such Participant’s Account were shares of Common Stock instead of Stock Units; provided, however,
that nothing in this Section 5.4 shall be construed to change any provision or meaning of Section
5.2.  A Participant must be a Participant in this Plan and must be currently serving as a
Non-Employee Director on the dividend declaration date and record date associated with a particular
Common Stock dividend, as well as the payment date (as provided herein) in order to receive a
dividend equivalent payment pursuant to this Section 5.4.  No Participant shall have any
rights to any payment referred to in this Section 5.4 until the Company’s payment of the dividend
equivalent amount, which shall be made within 74 days of the respective dividend declaration date. 
This Section 5.4 shall be considered a documentary arrangement separate from the payments governed
by Article VI, and each such payment shall be considered separate from the others, to the extent
necessary to qualify for exemption from Section 409A of the Internal Revenue Code, with the
remaining provisions of this document applicable to the extent necessary for its administration.



     5.5. Reports to Participants. At least once annually, the Committee shall furnish a statement
to each Participant reporting the value of the Participant’s Account.



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ARTICLE VI

PAYMENTS




     6.1. Entitlement to Payment. The Company will make payments pursuant to the Plan to a
Participant following such Participant’s ceasing to be a Non-Employee Director, including as a
result of such Participant’s death. The right of any person to receive one or more payments under
the Plan shall be an unsecured claim against the general assets of the Company. All payments
hereunder to Participants shall be in cash.



     6.2. Payment Commencement Date. Payments to a Participant with respect to the Participant’s
Account shall begin as of the Participant’s Payment Commencement Date.



     6.3. Form and Amount of Payment.



          (a) Ten Annual Installments. A Participant shall receive benefits in ten annual installments
unless the Participant elects to receive benefits under the Plan in the form of a lump-sum payment
or in fewer than ten annual installments in accordance with subsection (b) below. Annual
installments shall be payable to the Participant in cash beginning on the Payment Commencement Date
and continuing on each annual anniversary date thereafter until all installments have been paid.
The first annual installment shall equal one-tenth (1/10th) of the value of the Stock Units
credited to the Participant’s Account, determined as of the day immediately preceding the Payment
Commencement Date. Each successive annual installment shall equal the value of the Stock Units
credited to the Participant’s Account, determined as of the day immediately preceding the
applicable annual anniversary date of the Payment Commencement Date, multiplied by a fraction, the
numerator of which is one, and the denominator of which is the excess of ten over the number of
installment payments previously made (i.e., 1/9th, 1/8th, etc.). If the Participant dies before
receiving all payments provided for herein, the full value of the Participant’s remaining Account
shall be paid to the Participant’s Beneficiary in accordance with the schedule in this subsection
(a) or the schedule the Participant elected pursuant to subsection (b) below, whichever is
applicable.




          (b) Lump Sum or Fewer Than 10 Annual Installments. A Participant may, prior to the date on
which the Company first makes an Award to that Participant pursuant to this Plan, elect to receive
all benefits under the Plan in the form of a lump-sum payment or in two to nine annual installments
in lieu of the ten installment payments determined under subsection (a), above. The lump sum shall
be payable to the Participant in cash as of the Payment Commencement Date and shall equal the value
of the Stock Units credited to the Participant’s Account, determined as of the day immediately
preceding the Payment Commencement Date. Installments shall be paid in the manner set forth in
subsection (a) above, except that for purposes of determining the amount of the first annual
installment, the denominator of the fraction shall equal the number of scheduled annual
installments. An election under this subsection (b) may be made only as to a Participant’s entire
Account, shall be irrevocable and made in writing in a form and manner satisfactory to the
Committee, and shall be effective only for future service periods and only if made prior to the
first Award made pursuant to this Plan by the Company to the Participant.




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ARTICLE VII

MISCELLANEOUS




     7.1. Rights Not Assignable. No payment due under the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge in any other
way. Any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge such
payment in any other way shall be void. No such payment or interest therein shall be liable for or
subject to the debts, contracts, liabilities, or torts of any Participant. If any Participant
becomes bankrupt or attempts to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge in any other way any payment under the Plan, the Committee may direct that such payment be
suspended and that all future payments to which such Participant otherwise would be entitled be
held and applied for the benefit of such person, the person’s children or other dependents, or any
of them, in such manner and in such proportions as the Committee may deem proper.



     7.2. Certain Rights Reserved. Nothing in the Plan shall confer upon any person the right to
continue to serve as a member of the Board or to participate in the Plan other than in accordance
with its terms.



     7.3. Withholding Taxes. The Committee may make any appropriate arrangements to deduct from
all credits and payments under the Plan any taxes that the Committee reasonably determines to be
required by law to be withheld from such credits or payments.



     7.4. Incapacity. If the Committee determines, upon evidence satisfactory to the Committee,
that any Participant to whom a benefit is payable under the Plan is unable to care for such
Participant’s affairs because of illness or accident or otherwise, any payment due under the Plan
(unless prior claim therefor shall have been made by a duly authorized guardian or other legal
representative) may be paid, in the Committee’s sole discretion and upon appropriate
indemnification of the Committee and the Company, to the spouse of the Participant or other person
deemed by the Committee to have incurred substantial expense in providing for the care of such
Participant. Any such payment shall be a complete discharge of any liability under the Plan with
respect to the amount so paid.



     7.5. Obligation to Provide Contact Information. Each Participant entitled to receive a
payment under the Plan shall keep the Committee advised of such Participant’s current address and
contact information.



     7.6. Forfeitures. Notwithstanding any other provision contained herein, the Committee shall
have the right to cancel any Award and adjust any Account such that a Participant receives, as a
result of such Participant’s Account, a smaller payment than previously contemplated or no payment
at all, if the Committee determines, in its sole discretion, that such Participant, while a
Non-Employee Director, engaged in any activity in competition with the Company or activity
inimical, contrary, or harmful to the interests of the Company, irrespective of whether, at the
time the Committee makes such determination, such Participant is then currently a Non-Employee
Director or has already begun receiving payments pursuant to this Plan.



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     7.7. Successors. The provisions of the Plan shall bind and inure to the benefit of the
Company and its successors and assigns. The term “successors” as used in the preceding sentence
shall include any corporation or other business entity that by merger, consolidation, purchase, or
otherwise acquires all or substantially all of the business, stock, or assets of the Company, and
any successors and assigns of any such corporation or other business entity.



     7.8. Compliance with Laws. Notwithstanding anything in this Plan to the contrary, the
Committee, in its discretion, may amend the Plan or any Award to cause the Plan and such Award to
remain beyond the scope of the types of compensatory arrangements that are subject to the
requirements of Section 409A of the Code or to otherwise comply with the requirements of Section
409A. If any amendment to the Plan or any provision of an Award would cause the Participant to be
subject to a tax penalty under Section 409A of the Code, such amendment or provision shall be
deemed modified in such manner as to render the Plan or Award exempt from, or compliant with, the
requirements of Section 409A and to effectuate as nearly as possible the original intention of the
Company.



     7.9. Titles. Titles of Sections in this Plan are provided herein for convenience only and are
not to serve as a basis for interpretation or construction of the Plan.



     7.10. Separability of Provisions. If any provision of the Plan is held to be invalid or
unenforceable, the other provisions of the Plan shall not be affected but shall be applied as if
the invalid or unenforceable provision had not been included in the Plan.



     7.11. Governing Law. Except to the extent governed by federal law, the Plan and any
agreements hereunder shall be administered, interpreted, and enforced under the internal laws of
the State of Michigan without regard to conflicts of laws thereof.



     The foregoing Plan was duly adopted by the Board of Directors of La-Z-Boy Incorporated on
August 20, 2008.



Executed on this 29th day of August, 2008.




	 	 	 
	 

Kurt L. Darrow

	 	 
	President and Chief Executive Officer
	 	 







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