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THIRD AMENDMENT TO CREDIT AGREEMENT
 THIS THIRD AMENDMENT TO CREDIT AGREEMENT Amendment LA-Z-BOY INCORPORATED Borrower Guarantor Guarantors WACHOVIA BANK,
NATIONAL ASSOCIATION Administrative Agent
 WITNESSETH
 WHEREAS Lenders Credit Agreement
 WHEREAS
 WHEREAS
 NOW, THEREFORE
 ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT
 1.1 New Definitions .
 Accounts Receivable
 Asset Coverage Ratio plus




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plus
 Eligible Accounts Receivable
 Eligible Finished Goods Inventory
 Eligible Raw Materials Inventory
 Finished Goods Inventory
 Raw Materials Inventory
 Third
Amendment Effective Date
 1.2 Definition of Applicable Percentage . Applicable Percentage
 Alternate
    
    LIBOR Rate MarginBase Rate
    
    for Revolving LoansFunded Debt to
    
    Margin for
    
    and Standby Letter
    
    Commercial andTotal Capitalization
    
    Revolving
    
    of
    
    Trade Letters of
    
    FacilityLevel
    
    Ratio
    
    Loans
    
    Credit Fee
    
    Credit Fee
    
    FeeI
    
    > .400 to 1.0
    
    
    0.475
    %
    
    
    1.475
    %
    
    
    1.075
    %
    
    
    0.325
    %II
    
    < .400 to 1.0 but
    
    
    0.225
    %
    
    
    1.225
    %
    
    
    0.950
    %
    
    
    0.275
    %> .250 to 1.0III
    
    < .250 to 1.0
    
    
    0.150
    %
    
    
    1.150
    %
    
    
    0.9125
    %
    
    
    0.250
    %
 1.3 Fixed Charge Coverage Ratio .
 ; provided that, notwithstanding the foregoing, the Fixed Charge Coverage Ratio as of
the end of the fiscal quarter ended October 27, 2007 shall be greater than or equal to 2.00
to 1.0.
 1.4 Asset Coverage Ratio .
 (c) Asset Coverage Ratio . The Asset Coverage Ratio measured as of the last day
of the twelve month period ending as of each fiscal month end shall be greater than
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or equal to 1.10 to 1.0 at all times; provided that it is acknowledged and
agreed that Credit Parties shall not be required to show such calculations except in
connection with the delivery of the financial statements referred to in Sections 6. 1(a) and
6. 1(b) in accordance with Section 6. 2(a) .
 1.5 Indebtedness .
 (b) Priority Debt existing as of the Third Amendment Effective Date; and
 (c) Indebtedness existing as of the Third Amendment Effective Date plus  other Indebtedness (other than Priority Debt) in an aggregate amount not to exceed
$5,000,000 at any time outstanding; provided that the Credit Parties are in
compliance with the financial covenants set forth in Section 6.7 on a Pro Forma Basis.
 1.6 Liens .
 (a) (i) purchase money security interests in fixed assets granted prior to the Third
Amendment Effective Date (including such security interests granted in connection with the
issuance of industrial development revenue bonds issued to permit the Borrower or any of its
Subsidiaries to acquire fixed assets) and (ii) purchase money security interests in fixed
assets granted after the Third Amendment Effective Date in an aggregate amount not to exceed
$4,000,000 at any time outstanding (including such security interests granted in connection
with the issuance of industrial development revenue bonds issued to permit the Borrower or
any of its Subsidiaries to acquire fixed assets), provided that each such security
interest is created substantially contemporaneously with the acquisition of such fixed
assets and does not extend to any property other than the fixed assets so financed;
 1.7 Mergers, Sale of Assets and Indebtedness of Subsidiaries .
 (v) in addition to the foregoing, the sale, lease or transfer of property or assets to
Persons other than the Borrower and its Subsidiaries not to exceed 10% of Consolidated
Assets (determined as of the end of the most recently ended fiscal quarter prior to the
Closing Date) in the aggregate during the term of this Credit Agreement; or
 1.8 Advances, Investments and Loans .
 (c) consummate any acquisition except for Permitted Acquisitions that are dealer
acquisitions in an aggregate amount not to exceed $6,000,000 from the Third Amendment
Effective Date through the end of this Agreement;
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provided that after giving effect to the making of any Investment, loan or advance
permitted by this Section 7.5, no Default or Event of Default shall have occurred and be
continuing.
 1.9 Restricted Payments .
 7.9 Restricted Payments .
 Directly or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same class of Capital
Stock of such Person, (b) to make dividends or other distributions payable to the Borrower
(directly or indirectly through Subsidiaries) and (c) the Borrower may pay cash dividends to
the shareholders of the Borrower so long as, after giving effect thereto on a Pro Forma
Basis, no Default or Event of Default shall exist.
 ARTICLE II
CONDITIONS TO EFFECTIVENESS
 2.1 Closing Conditions .
 Executed Amendment
 New Facility
 Fees and Expenses
 Miscellaneous
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ARTICLE III
MISCELLANEOUS
 3.1 Amended Terms
 3.2 Representations and Warranties of Credit Parties
       3.3 Acknowledgment of Guarantors .
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3.4 Credit Document .
 3.5 Entirety .
 3.6 Counterparts; Telecopy .
 3.7 Successors and Assigns .
 3.8 GOVERNING LAW . THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NORTH CAROLINA.
 3.9 Consent to Jurisdiction; Service of Process . mutatis mutandis
 3.10 GENERAL RELEASE . IN CONSIDERATION OF THE REQUIRED LENDERS ENTERING INTO THIS
AMENDMENT, THE CREDIT PARTIES HEREBY RELEASE THE ADMINISTRATIVE AGENT, THE LENDERS, AND THE
ADMINISTRATIVE AGENTS AND THE LENDERS RESPECTIVE OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS,
COUNSEL AND DIRECTORS FROM ANY AND ALL ACTIONS, CAUSES OF ACTION, CLAIMS, DEMANDS, DAMAGES AND
LIABILITIES OF WHATEVER KIND OR NATURE, IN LAW OR IN EQUITY, NOW KNOWN OR UNKNOWN, SUSPECTED OR
UNSUSPECTED TO THE EXTENT THAT ANY OF THE FOREGOING ARISES FROM ANY ACTION OR FAILURE TO ACT UNDER
THE CREDIT AGREEMENT OR UNDER THE OTHER CREDIT DOCUMENTS ON OR PRIOR TO THE DATE HEREOF.
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BORROWER:
    LA-Z-BOY INCORPORATED, a Michigan corporationBy:

/s/
M. SkrzypczakName:
    Michael S. SkrzypczakTitle:
    VP and TreasurerGUARANTORS:
    KINCAID FURNITURE COMPANY
INCORPORATED, a Delaware corporation
ENGLAND, INC., a Michigan corporation
BAUHAUS U.S.A., INC., a Mississippi corporation
LA-Z-BOY GREENSBORO, INC., a North Carolina corporation
LZB MANUFACTURING, INC., a Michigan corporationBy:

/s/
M. SkrzypczakName:
    Michael S. SkrzypczakTitle:
    VP and Treasurer




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ADMINISTRATIVE AGENT:
    WACHOVIA BANK, NATIONAL ASSOCIATION,
as a Lender and as Administrative AgentBy:
    /s/ Martha M. WintersName:  Martha M. WintersTitle:  Director




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LENDERS:
    JPMORGAN CHASE, N.A.,as a lenderBy:

/s/
James M. SumoskiName:
    James M. SumoskiTitle:
    Vice President




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LENDERS:
    THE NORTHERN TRUST COMPANY,
as a LenderBy:

/s/
J. T. HallName:  Jared T. HallTitle:  Vice President




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LENDERS:
    SunTrust Bank,
as a LenderBy:
    /s/ William HumphriesName:  William HumphriesTitle:    Managing Director




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LENDERS:
    COMERICA BANK,
as a LenderBy:

/s/
Steven J. McCormackName:  Steven J. McCormackTitle:  Vice President




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LENDERS:
    BRANCH BANKING AND TRUST COMPANY,
as a LenderBy:

/s/
Jennifer L. CuddName:  Jennifer L. CuddTitle:  Senior Vice President