UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.            )
 
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  lazboylogo.jpg

La-Z-Boy Incorporated
 
  (Name of Registrant as Specified In Its Charter)  
 
       
 
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

   
Day: Wednesday, August 19, 2015
Time: 9:30 a.m., Eastern Daylight Time
Place:

The Westin Detroit Metropolitan Airport
Wright Room

2501 Worldgateway Place
Romulus, Michigan

Monroe, Michigan
July 8, 2015

To our shareholders:

We invite you to attend our 2015 annual meeting of shareholders to be held Wednesday, August 19, 2015, in the Wright Room of The Westin Detroit Metropolitan Airport, located at 2501 Worldgateway Place, Romulus, Michigan (see the map on the back cover). Only shareholders of record at the close of business on June 30, 2015, will be entitled to vote at the meeting. At the meeting, we intend to:

Elect nine directors for one-year terms expiring in 2016;

Hold a non-binding advisory vote on a proposal to approve the compensation of our named executive officers;

Ratify the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for fiscal 2016; and

Transact any other business that properly comes before the meeting.

The Board of Directors recommends a vote "FOR" each proposal. The proxy holders will use their discretion to vote on any other matters that come before the shareholders at the annual meeting.

We encourage you to exercise your right as a shareholder and cast your vote promptly. If you received a paper copy of the proxy materials, you may vote by mail by signing, dating, and returning the enclosed proxy card in the accompanying envelope. You may also vote by telephone or on the Internet (see the instructions attached to the proxy card or on the Notice of Internet Availability of Proxy Materials). Even if you vote by one of these methods prior to the meeting, you may still vote your shares in person at the meeting, and doing so will revoke your previous vote.

BY ORDER OF THE BOARD OF DIRECTORS

James P. Klarr,
Secretary


Proxy Summary

     
Where: When: Proposals

The Westin Detroit Metropolitan Airport

Wright Room

2501 Worldgateway Place

Romulus, Michigan

August 19, 2015

at 9:30 A.M. (Eastern)

1. Elect nine directors
2. Advisory approval of our executive compensation
3. Ratify the selection of an independent registered public accounting firm

We are furnishing this proxy statement, form of proxy and accompanying materials to our shareholders on or about July 8, 2015.

Our board nominees


                   
Nominee Director since   Occupation and other Boards Audit Comp Nom & Govern
Kurt Darrow 2003   Our Chairman, President and CEO        
Richard Gabrys* 2006   Director, CMS Energy and TriMas Corporation    
David Hehl* 1977   Retired partner, Cooley Hehl Wohlgamuth & Carlton, PLLC    
Edwin Holman* 2010   Director, Christopher & Banks    
Janet Kerr* 2009   Director, AppFolio, Inc., TCW Strategic Income Fund, Inc., and Tilly's, Inc.     Chair  
Michael Lawton* 2013   Executive Vice President and CFO, Domino's Pizza, Inc. Chair    
Dr. George Levy* 1997   Otorhinolaryngologist    
Alan McCollough* 2007   Director, Goodyear Tire & Rubber Company and VF Corporation   Chair    
Dr. Nido Qubein* 2006   Director, BB&T Corporation    

* Independent directors

Operations highlights


   

Comparison of 5-Year Total Return

Assumes Initial Investment of $100 - April 2015

 

performance_graph.jpg

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PROXY STATEMENT

   
Shareholder Return 5-Year Sales and Operating Margin

Returned to our shareholders in fiscal 2015:

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Executive Compensation Highlights


         
  What we do     What we don't do
Pay for performance - emphasizing variable pay linked to our financial or market results   X Provide employment agreements
Executive stock ownership guidelines - to align executives' interests with our shareholders   X Gross up excise taxes upon change in control
Use relative total shareholder return (TSR) in long-term performance award   X

Reprice options without shareholder approval

Base company contributions to executive retirement plans on performance   X Pay dividends on unearned performance shares or units
Mitigate undue risk with caps on potential incentive payments and a clawback policy      
Utilize double-trigger change in control agreements      
Include only independent directors on the compensation committee      
Engage an independent compensation consulting firm to assist the compensation committee      
Align severance and change in control arrangements with market practices      
Prohibit executives from hedging and short selling of our shares      

Ways you can vote


       
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Online

www.proxyvote.com

By Phone

1.800.690.6903

By Mail

Completing, signing and returning your proxy card

In Person

With proof of ownership and a valid photo ID

PROXY STATEMENT | 2015 3

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2015 Proxy Statement


Table of Contents

   
Corporate Governance 5
Board and Committee Operations 9
Share Ownership 11
Director Compensation 14
Proposal No. 1: Election of Directors 16
Compensation Discussion and Analysis 23
Compensation Committee Report 35
Executive Compensation 36
Proposal No. 2: Advisory Vote on the Compensation of the Company's Named Executive Officers 47
Audit Committee Report 48
Proposal No. 3: To Ratify the Selection of Independent Registered Public Accounting Firm 49
Other Matters 49

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Corporate Governance

Board of Directors


Our board of directors is committed to good governance practices that further the company's strategic growth plans and enhance shareholder value over the long term, while also considering the interests of other stakeholders, including our employees, customers, vendors, and the communities we impact. The board oversees the company's performance, including its strategic direction and critical corporate policies that have the largest impact on our operations. In exercising its oversight responsibility, the board evaluates the performance of our president and chief executive officer and directs succession planning for the president, directors, and, to the degree appropriate, other leadership positions. The board monitors our strategic plan, our performance against the plan, and management's assessment and remediation of the company's risks. The board regularly reviews our governance practices and compares them to evolving best practice, making changes when appropriate. It also monitors the company's culture to ensure we maintain the highest levels of ethics and integrity, especially with respect to our financial statements and disclosures.

In the following section, we describe our governance policies and practices. Our governance guidelines can be found on our website at http://investors.la-z-boy.com, under "Corporate Governance," and they address our policies related to director selection, membership criteria, independence, orientation, and assessment of board performance. At the same site, we post our other key governance documents, such as the lead director charter, the charters for each of the board's key committees, and our Code of Business Conduct.

Leadership Structure


Our current leadership structure incorporates a combined position of chairman and chief executive officer reporting to a board of otherwise independent directors, with a strong independent lead director. At the time we combined the roles of chairman and CEO, we felt it was imperative that the leadership of the company be focused in one position to ensure effective leadership to implement our strategic plan and initiatives. Our results since then confirm that we were correct, and we believe this remains the appropriate structure for our company.

Our Corporate Governance Guidelines require that when the roles of our chairman and CEO are combined, we elect an independent lead director. Our lead director serves as the principal liaison between our independent directors and our chairman, facilitating a steady stream of communications between management and our independent directors. Among other duties, the lead director:

collaborates on the board and committee meeting agendas;

solicits and recommends matters for the board and committees to consider;

advises the chairman as to the quality, quantity, and timeliness of the information submitted to the directors;

calls meetings of the independent directors or calls for executive sessions during board meetings;

serves as chairman of the meetings of the independent directors or executive sessions of the board;

collaborates with committee chairs to ensure board work is conducted at the appropriate level, coordinating on issues involving multiple committees;

meets with our CEO to discuss his performance;

communicates directly with shareholders when appropriate; and

presides at board meetings when the chairman is absent.

Our strong independent lead director structure, in combination with a board composed solely of independent directors other than the chairman and regular executive session meetings without management, ensures that our board exercises effective oversight of our executive chairman and the interests of our shareholders.

Board Risk Oversight


While management is responsible for the day-to-day assessment, monitoring and remediation of the company's risks, our board of directors is responsible for oversight of these risk activities. To ensure vigilant monitoring of the risks, the board has delegated risk oversight to various committees while maintaining certain key risks at the full board level. The board has directed the nominating and governance committee to assign oversight of the various risk categories, including strategic, operational, IT, and financial risk, to the various committees or the full board,

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Corporate Governance

while ensuring that all risks, including any emerging risks, are monitored. The nominating and governance committee regularly reviews management's enterprise risk management process, which is incorporated in the company's strategic planning process, to identify new and emerging risks.

Each committee regularly reviews and reports to the board on its respective risk categories. Throughout the year, our board and board committees review and discuss the various risks confronting the company, paying special attention to new operating and strategic initiatives. Our nominating and governance committee and our board as a whole encourage open communication and appropriate escalation of reporting of risk throughout the enterprise, striving to ensure that enterprise risk management is part of our corporate culture.

Succession Planning


Our board of directors engages in an effective planning process to identify, evaluate and select potential successors to the CEO and other members of executive management. The CEO provides quarterly updates to the directors of the significant changes in key personal and annually reviews with the board executive management succession planning. Each board member has complete and open access to any member of management. The senior members of management are invited regularly to make presentations at board and committee meetings and meet with directors in informal settings to allow the directors to form a more complete understanding of the executive's skill and character. The board periodically reviews and revises as necessary the company's emergency management succession plan, which details the actions to be taken by specific individuals in the event the CEO suddenly dies or becomes incapacitated.

Director Selection


Our nominating and governance committee is responsible for recommending director candidates to fill current and anticipated board vacancies. The committee identifies and evaluates potential candidates from recommendations from the committee's own members, referrals from other board members, management, shareholders, or other outside sources, including professional recruiting firms. (For information on how to propose a candidate to the committee or nominate a director, see "Next Annual Meeting—Shareholder Proposals for the 2016 Annual Meeting," page 51.) In evaluating proposed candidates, the committee may review their résumés, obtain references, and conduct personal interviews. The committee considers, among other factors, the board's current and future need for specific skills and the candidate's experience, leadership qualities, integrity, diversity, ability to exercise mature judgment, independence, and ability to make the appropriate time commitment to the board.

In anticipation of future retirements of current directors, the committee has begun a review of the skills desired to complement the skills of remaining directors. After determining the desired skill set, the committee will begin a focused search for qualified candidates.

Director Independence


Our board of directors strongly supports the concept of director independence, and only our chairman is an insider. Consistent with the NYSE rules, our Corporate Governance Guidelines require that a majority of our directors be independent, and we limit membership on each of our committees to independent directors.

Our board annually reviews and determines if any director has any material relationship with our company, our management, or our other directors that would impede the director's autonomy. As reflected in our Corporate Governance Guidelines, a director cannot be deemed independent if, in the previous three years, either the director or an immediate family member:

was employed by our company or our independent registered public accounting firm;

was employed by a company with a compensation committee that included one of our executive officers;

received more than $120,000 during any 12-month period in direct compensation from La-Z-Boy, other than director compensation or pension or other forms of deferred compensation for prior service (provided such compensation was not contingent in any way on continued service); and

was an executive officer or employee of an entity that made payments to or received payments (other than contributions to a tax-exempt organization or charity) from us for property or services that, in any single

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Corporate Governance

 
fiscal year, exceeded the greater of $1 million or 2% of the other entity's consolidated gross revenues.

In addition, our board has adopted the following categorical standards to clarify if a relationship is material. We will not treat a relationship as material if:

A director is an executive officer, director, or shareholder of a company that does business with us and the annual revenues derived from that business are less than 1% of each company's total revenues;

A director is an executive officer, director, or shareholder of a company that is indebted to us, or to which we are indebted, and the total amount of each company's indebtedness to the other is less than 1% of the total consolidated assets of each company; or a director is an executive officer, director, or shareholder of a bank or other financial institution (or its holding company) that extends credit to us on normal commercial terms and the total amount of our indebtedness to the bank or other financial institution is less than 3% of our total consolidated assets;

A director is an executive officer or director of a company in which we own common stock but our interest is less than 5% of that company's total shareholders' equity;

A director's family member is or was employed by us in a non-executive capacity with compensation that has not exceeded $120,000 in any fiscal year;

A director is a director, officer, or trustee of a charitable organization to which we contribute, but our annual contributions (exclusive of gift-match payments) are less than 1% of the organization's total annual charitable receipts, all of our contributions were approved through our normal approval process, and no contribution was made "on behalf of" any of our officers or directors; or a director is a director of the LaZBoy Foundation; or

A director is a member of, employed by, or of counsel to a law firm or investment banking firm that performs services for us, our payments to the firm during a fiscal year do not exceed 1% of the firm's gross revenues, and the director's relationship with the firm is such that the director's compensation is not linked directly or indirectly to our payments to the firm.

Following the NYSE listing standards and our Corporate Governance Guidelines described above, our board of directors has determined that each of our directors other than our CEO is an "independent" director.

Related Party Transactions


Our Code of Business Conduct, which applies to all of our employees and directors, requires that any potential conflict of interest be either avoided or fully disclosed to our president, secretary, or audit committee chairman. Each year, we require our directors and executive officers to disclose any transactions between them or their immediate family members and the company. The audit committee reviews any transactions related to directors or executive officers reported and takes appropriate action. We will disclose on our website any waivers of the Code of Business Conduct granted to our directors or executive officers. We granted no waivers in fiscal 2015.

Stock Ownership Requirements


We encourage significant stock ownership by our directors and executive management to align the interests of our leadership with those of our shareholders. We have established stock ownership guidelines that require each non-employee director to own La-Z-Boy equity (including deferred or restricted stock units) at least equal in value to a multiple of the director's annual cash retainer or salary:


   
Non-employee directors 5x
CEO 5x
Other named executive officers 3x
Other executives 1x

As of April 25, 2015, each director other than Mr. Lawton, who is in his second year as a director, had met the ownership requirements. Under our guidelines, Mr. Lawton has until May 1, 2019, to meet the requirement. We prohibit directors, officers, or employees from engaging in short-term speculative trading in our shares, including short sales, trading in puts and calls, or buying on margin.

PROXY STATEMENT | 2015 7

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Corporate Governance

Majority Vote Standard for Director Elections


Our Corporate Governance Guidelines require that any director who fails to receive a majority of votes cast in an uncontested election must submit his or her resignation at the board meeting that immediately follows the annual shareholders' meeting. The other directors must then act on the resignation at or before the next regularly scheduled meeting and publicly report the board's decision. An election is treated as contested for purposes of this rule if there are more nominees for board seats than there are positions to be filled by election at the meeting.

Communication with the Company or the Directors


Interested parties may communicate their comments, concerns or questions about La-Z-Boy to the company, or specifically to our chairman, lead director, or any or all of our other directors, by letter addressed to them and sent by U.S. mail to the attention of the Corporate Secretary at:

   
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La-Z-Boy Incorporated
One La-Z-Boy Drive
Monroe, Michigan 48162

The corporate secretary reviews and compiles any communications received, provides a summary of any lengthy or repetitive communications, and forwards them to the appropriate director or directors. The complete communication is provided when requested by the appropriate director or directors.

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Board and Committee Operations

Our board met seven times during fiscal 2015. At most meetings, the non-employee directors met in executive session, chaired by our lead director, without management present. During fiscal 2015, each director attended at least 75 percent of the meetings of the board and committees on which the director served. All of the directors attended the 2014 shareholders' meeting, and we expect all the nominated directors to attend the 2015 shareholders' meeting.

We currently have three standing committees of the board: the audit, compensation, and nominating and governance committees. Each committee is composed of only independent directors. Each committee operates under its own charter (which can be found at http://investors.la-z-boy.com, under "Corporate Governance") and has the ability to engage independent consultants and advisors at the company's expense to assist the committee in fulfilling its duties. While our chairman is not a member of any of the board committees, he coordinates the agendas and activities of the committees with the lead director and each committee chair. Our lead director serves on our audit and compensation committees and generally attends the nominating and governance committee meetings. The current membership of each of the committees is shown in the following table:

Current Committee Membership

               
Name     Audit   Compensation   Nominating
and
Governance
Kurt L. Darrow (Chairman and CEO)              
John H. Foss            
Richard M. Gabrys (Lead Director)          
Janet L. Gurwitch          
David K. Hehl          
Edwin J. Holman          
Janet E. Kerr             Chair
Michael T. Lawton     Chair      
H. George Levy, MD          
W. Alan McCollough         Chair    
Dr. Nido R. Qubein          

Audit Committee


     

Key oversight duties:

Financial reporting process

Compliance with legal and regulatory requirements

Effectiveness of our internal and external audit functions

Selection of the independent registered public accounting firm

Members: Michael T. Lawton (Chair)
John H. Foss
Richard M. Gabrys
David K. Hehl
Edwin J. Holman
Fiscal 2015 meetings: 9

The committee monitors our auditor's independence, annually requests and reviews the firm's written statement of relationships with the company, and reviews and limits our use of our outside auditors for non-audit work. The committee reviews the staff assigned to our audit and ensures the lead partner is rotated at least once every five years. The committee discusses with management and our outside auditor the quality and adequacy of our internal controls for financial reporting. Each member meets the enhanced independence standards for audit committees established in the SEC and NYSE listing standards, is financially literate, and is an audit committee financial expert within the meaning of the SEC rules. The committee does not provide any professional certification of our outside auditor's work or any expert or special assurance about our financial statements.

For further discussion of the audit committee's activities, see "Audit Committee Report" below at page 48.

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Board and Committee Operations

Compensation Committee


     

Key Oversight Duties:

Executive and director cash and equity compensation programs

Evaluating the CEO's and executive officers' performance

Members: W. Alan McCollough, Chairman
Richard M.Gabrys
Janet L. Gurwitch
Michael T. Lawton
H. George Levy, MD
Dr. Nido R. Qubein
Fiscal 2015 meetings: 5

Only directors who meet standards of independence promulgated by the SEC (i.e., "non-employee director" as defined in the rules under Section 16 of the Securities Exchange Act of 1934), the Internal Revenue Service (i.e., "outside director" as defined in the regulations under Section 162(m) of the Internal Revenue Code), and the NYSE listing standards may serve on the committee. The committee obtains advice on executive compensation matters from an independent outside compensation consultant (Hay Group since fiscal 2010). Each year, the committee reviews and discusses the independence of its advisers pursuant to NYSE rules, and it has determined that Hay Group is independent and its work for the committee does not raise any conflicts of interest. The committee annually produces a report on executive compensation for inclusion in the proxy statement (see "Compensation Committee Report" below).

Compensation Committee Interlocks and Insider Participation. The committee consists of the directors named as members in the box above. None of our named executive officers serves on the board of directors of any company that employs a member of our compensation committee. The membership of the committee was unchanged in fiscal 2015.

Nominating and Governance Committee


     

Key Oversight Duties:

Board governance practices

Director candidates

Enterprise risk management process

Members: Janet E. Kerr, Chairman
Janet L. Gurwitch
David K. Hehl
Edwin J. Holman
H. George Levy, MD
Dr. Nido R. Qubein
Fiscal 2015 meetings: 4
     
Our nominating and governance committee is composed entirely of independent directors. The committee makes recommendations on general corporate governance issues including the size, structure, and composition of the board and its committees. The committee also assists our board in overseeing our risks, including risk assessment, mitigation, and the determination of risk tolerance levels. See "Risk Oversight" above for more discussion of our risk oversight process. The committee's charter can be found on our website at http://investors.la-z-boy.com, under "Corporate Governance."

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Share Ownership

Directors and Executive Officers


The following table shows the beneficial ownership of our common stock by each director, each executive officer named in the Summary Compensation Table, and all directors and current executive officers as a group as of the record date for the annual meeting. The table and footnotes also contain information about restricted stock units credited to the non-employee directors that derive their value based on the market value of our shares. None of the shares shown in the table are pledged as security.

            
        Number of Shares or Units  
  Beneficial Owner     Common
Stock(1)(2)
    Percent of
Class
    Units
Settleable in
Cash(3)
 
  Mark S. Bacon, Sr.     100,757     *      
  J. Douglas Collier     144,911     *      
  Kurt L. Darrow     818,562     1.60      
  Darrell D. Edwards     49,802     *      
  John H. Foss     43,417     *     16,514  
  Richard M. Gabrys     37,317     *     16,514  
  Janet L. Gurwitch     28,317     *     5,000  
  David K. Hehl(5)     53,773     *     16,514  
  Edwin J. Holman     31,356     *     5,000  
  Janet E. Kerr     31,017     *     12,927  
  Michael T. Lawton     6,745     *      
  H. George Levy, MD     46,417     *     16,514  
  W. Alan McCollough     35,317     *     16,514  
  Dr. Nido R. Qubein     52,062     *     16,514  
  Louis M. Riccio Jr.     153,733     *      
  All current directors and current executive officers as a group (17 persons)(4)     1,929,263     3.74     122,011  

   
* Less than 1%
(1) This column lists beneficial ownership as calculated under the SEC rules, including stock options and restricted stock units that may be exercised or converted without the company's consent within 60 days of our record date of June 30, 2015.
(2) These amounts include 6,745 restricted stock units for Mr. Lawton and 28,317 restricted stock units for each other non-employee director which vest and settle in shares when the director leaves the board. See the Fiscal 2015 Non-employee Director Compensation table and related footnotes beginning on page 14 for additional detail.
(3) These restricted stock units vest and settle in cash, at the fair market value determined at the settlement date, when the director leaves the board.
(4) For purposes of calculating the percentage ownership of the group, all shares representing the restricted stock units (footnote 2) and shares subject to options held by any group member that currently are exercisable or that will become exercisable within 60 days of our record date of June 30, 2015, are treated as outstanding. For purposes of calculating the percentage of ownership of any individual, however, only the shares representing the restricted stock units and the shares subject to options exercisable or that become exercisable as described above that are held by that individual are treated as outstanding. For the computation of each individual's ownership percentage, shares representing restricted stock units and shares subject to options held by other directors or executives are not counted.

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Share Ownership

   
  In addition to the restricted stock units described in footnote 2, the table includes the following numbers of shares subject to options:

     
  Mr. Bacon 34,035
  Mr. Collier 48,329
  Mr. Darrow 278,103
  Mr. Edwards 38,287
  Mr. Riccio 44,702
  All current directors and current executive officers as a group 535,254

   
(5) The table also includes 1,956 shares owned by Mr. Hehl's wife, of which shares Mr. Hehl disclaims beneficial ownership.

Significant Shareholders


The tables below provide information about beneficial owners of our common shares. Under applicable SEC rules, anyone who has or shares the right to vote any of our common shares, or has or shares dispositive power over any of them, is a "beneficial owner" of those shares. The settlor of a trust with a right to revoke the trust and regain the shares, or a person who can acquire shares by exercising an option or a conversion right, may also be considered a beneficial owner under these rules. Consequently, more than one person can be considered the beneficial owner of the same common shares. Unless otherwise indicated below, each owner named in a table has sole voting and sole dispositive power over the shares reported for that person.

Security Ownership of Known Over 5% Beneficial Owners
(as of December 31, 2014, except as otherwise indicated)

         
  Name and Address     Number
of Shares
    Percent
of Class
 
  Franklin Resources, Inc. and related parties
    One Franklin Parkway
    San Mateo, CA 94403
    5,579,800     10.98  
  BlackRock, Inc. and subsidiaries
    55 East 52nd Street
    New York, NY 10022
    4,534,361     8.92  
  The Vanguard Group
    100 Vanguard Blvd.
    Malvern, PA 19355
    3,561,456     7.01  
  Victory Capital Management, Inc.
    4900 Tiedeman Rd., 4th Floor
    Brooklyn, Ohio 44144
    2,788,253     5.49  

Information about Franklin Resources, Inc., Charles B. Johnson and Rupert H. Johnson, Jr., principal shareholders of Franklin Resources, Inc., and Franklin Advisory Services, LLC is based on an amended Schedule 13G they filed jointly after December 31, 2014, in which they reported that as of that date, they had sole voting power over 5,129,000 common shares and sole dispositive power over 5,579,800 common shares through their control of Franklin Advisory Services, LLC, a wholly owned subsidiary of Franklin Resources, Inc., that acts as investment manager to various investment companies that hold our shares.

Information about BlackRock, Inc. and its subsidiaries is based on an amended Schedule 13G BlackRock, Inc. filed after December 31, 2014, in which it reported that as of that date, it and its subsidiaries had sole voting power over 4,412,703 common shares and sole dispositive power over 4,534,361 common shares. The other companies reported as beneficial owners of our common shares were BlackRock Advisors (UK) Limited, BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A., BlackRock Investment Management (Australia) Limited, BlackRock Investment Management (UK) Limited, BlackRock Investment Management, LLC.

Information about The Vanguard Group is based on an amended Schedule 13G it filed after December 31, 2014, in which it reported that as of that date, it had sole voting power over 70,260 common shares, sole dispositive power over 3,495,596 common shares and shared dispositive power over 65,860 common shares.

Information about Victory Capital Management, Inc. is based on a Schedule 13G it filed after December 31, 2014, in which it reported that as of that date, it had sole voting power over 2,594,384 common shares and sole dispositive power over 2,788,253 common shares.

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Share Ownership

Section 16(a) Beneficial Ownership Reporting Compliance


Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers and directors, some over 10% owners of our common shares, and some persons who formerly were directors, executive officers, or over 10% owners to file reports of ownership and changes in ownership with the SEC and the NYSE and to furnish us with a copy of each report filed. Based solely on our review of copies of the reports filed by some of those persons and written representations from others that no reports were required, we believe that during fiscal 2015, all Section 16(a) filing requirements were complied with in a timely fashion.

PROXY STATEMENT | 2015 13

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Director Compensation

Working with an independent compensation consultant, we designed our annual pay package for directors to attract and retain highly qualified professionals to represent our shareholders. Directors who are also our employees receive no additional compensation for serving on the board. Non-employee directors receive a combination of cash and restricted stock units as compensation for their service. We reimburse our directors for their costs of travel, lodging, and related expenses while on company-related business. We provide membership in the National Association of Corporate Directors (NACD) for each director and reimburse directors for fees and expenses for participation in NACD and other programs on corporate governance and other issues related to their duties as directors. We encourage our directors to enhance their understanding of our operations and business by visiting our facilities, retail outlets, and competing retailers.

Effective May 1, 2015, we increased our directors' annual retainers by $5,000 (approximately 3.4%), split evenly between cash and equity compensation. For fiscal 2015, we paid each director cash and equity compensation in the following amounts:

Cash Compensation

We paid each non-employee director an annual cash retainer of $72,500. We paid our lead director an additional cash retainer of $20,000 for serving in that capacity, and we paid the chairs of our audit, compensation, and nominating and governance committees additional cash retainers of $15,000, $12,000, and $8,500, respectively. The board held fewer than 25 meetings in fiscal 2015, so we did not pay additional meeting fees.

Equity Compensation

On September 2, 2014, we issued each non-employee director a grant of 3,325 restricted stock units with a grant date value of $72,518. Each restricted stock unit is equivalent in value to a share of La-Z-Boy common stock. Dividend equivalents are awarded on restricted stock units at the same time and in the same amount as dividends declared on our common shares. The restricted stock units do not include voting rights. The units vest and are settled, in shares only, when the director leaves the board.

The following table provides details of each non-employee director's compensation for fiscal 2015. Compensation varied between directors based on lead director status, committee membership, and committee chairs held. Stock awards reflect the grant date fair value.

Fiscal 2015 Non-employee Director Compensation

               
  Name     Fees Earned
or Paid in
Cash
$(1)
    Stock
Awards
$(2)
    All Other
Compensation
$(3)
    Total
($)
 
  John H. Foss (4)     80,750     72,518     12,154     165,422  
  Richard M. Gabrys     92,500     72,518     12,154     177,172  
  Janet L. Gurwitch     72,500     72,518     8,930     153,948  
  David K. Hehl     72,500     72,518     12,154     157,172  
  Edwin J. Holman     72,500     72,518     8,930     153,948  
  Janet E. Kerr     81,000     72,518     11,149     164,667  
  Michael T. Lawton (4)     79,375     72,518     1,490     153,383  
  H. George Levy, MD     72,500     72,518     12,154     157,172  
  W. Alan McCollough     84,500     72,518     12,154     169,172  
  Dr. Nido R. Qubein     72,500     72,518     12,154     157,172  

   
(1) Includes actual annual board retainer fees, lead director retainer fees, and committee chairman fees.

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Director Compensation

   
(2) Reflects the grant date fair value computed in accordance with FASB ASC Topic 718. Each director then in office received 3,325 restricted stock units on September 2, 2014. Restricted stock units granted to non-employee directors in 2008 and 2009 under our former plan were settleable in cash; units granted since September 1, 2010, and to be granted in future years under our 2010 Omnibus Incentive Plan, will be settleable in shares. As of April 25, 2015, the number of restricted stock units of each type held by each non-employee director (which vest and settle when the director leaves the board) were:

            
              Units
Settleable
in Cash
    Units
Settleable in
Shares
 
        John H. Foss     16,514     28,317  
        Richard M. Gabrys     16,514     28,317  
        Janet L. Gurwitch     5,000     28,317  
        David K. Hehl     16,514     28,317  
        Edwin J. Holman     5,000     28,317  
        Janet E. Kerr     12,927     28,317  
        Michael T. Lawton         6,745  
        H. George Levy, MD     16,514     28,317  
        W. Alan McCollough     16,514     28,317  
        Dr. Nido R. Qubein     16,514     28,317  

   
(3) Reflects payments of dividend equivalents on restricted stock units at the time and in the amount that dividends were declared for common shares.
(4) Mr. Lawton succeeded Mr. Foss as chairman of the audit committee in November of 2014, and each received a prorated committee chair retainer.

PROXY STATEMENT | 2015 15

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Proposal No. 1: Election of Directors

Shareholders will elect nine directors to serve a one-year term until our 2016 annual meeting of shareholders when their successors are elected and qualified. Our board currently has eleven directors, but two directors have, because of personal and business constraints, requested not to be nominated for re-election for the 2016 term, and the board has therefore reduced the board's size to nine seats effective immediately upon the expiration of the terms of those two directors at the annual meeting. In addition, Richard Gabrys has reached our retirement age for directors and normally would not be nominated for the 2016 term. To minimize the disruption from losing multiple seasoned directors in the same year, the board has waived Mr. Gabrys' normal retirement date and asked him to serve for an additional term. Upon the recommendation of the board's nominating and corporate governance committee, the board has nominated for re-election:

 
Kurt L. Darrow
Richard M. Gabrys
David K. Hehl
Edwin J. Holman
Janet E. Kerr
Michael T. Lawton
H. George Levy, M.D.
W. Alan McCollough
Dr. Nido R. Qubein

Each nominee has consented to being named in this proxy statement and has agreed to serve if elected. If a nominee is unable to stand for election, the board may either reduce the number of directors to be elected or select a substitute nominee. If a substitute nominee is selected, the proxy holders may vote your shares for the substitute nominee.

In accordance with Michigan law, directors will be elected at the meeting by a plurality of votes cast from among those persons duly nominated, with separate balloting for each of the nine positions. The nominees who receive the highest through the ninth highest number of votes will be elected, regardless of any votes that are not cast for the election of those nominees, including abstentions, broker non-votes, and withholding of authority. Under our corporate governance guidelines, however, any director who does not receive a majority of the votes cast must tender his or her resignation at the board meeting that immediately follows the shareholders' meeting. The board must act on the offer of resignation at or before its next meeting, which is currently planned for mid-November, and publicly disclose its decision. Any vacancy created by such a resignation could then be filled by the board of directors pursuant to our bylaws. For more information, please see "Corporate Governance Matters — Majority-Voting Standard for Director Elections."

 
YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NINE NOMINEES.

Director Qualifications


The board, acting through its nominating and governance committee, seeks directors who collectively possess the experience, skills, backgrounds, and qualifications necessary to effectively oversee our company in our current and evolving business circumstances. The committee seeks directors with established records of significant accomplishments in business and areas relevant to our strategies. In determining the slate of nominees and whether to seek one or more new candidates, the committee reviews the board's size and our current directors' qualifications. All of our current directors bring to our board a wealth of executive leadership experience derived from their service as executives and entrepreneurs, as well as valuable board experience. The following chart summarizes the director nominees' key qualifications, experience, and skills.

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Proposal No. 1: Election of Directors

                     
La-Z-Boy Board of Directors: Kurt
Darrow
Richard
Gabrys
David
Hehl
Edwin
Holman
Janet
Kerr
Michael
Lawton
George
Levy
Alan
McCollough
Nido
Qubein
   
Leadership experience   leadership.jpg
Public Company Board Experience   bod1.jpg      
Finance   financial.jpg  
Technology   technology2.jpg      
Global Perspective   global.jpg    
Sourcing/Manufacturing   industry.jpg          
Consumer Marketing   marketing.jpg      
Retail   retail.jpg      

We provide information below about each person nominated for election at the meeting. Unless otherwise indicated, the principal occupation of each nominee has been the same for at least five years.

PROXY STATEMENT | 2015 17

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Proposal No. 1: Election of Directors

                     
  Kurt L. Darrow Age 60 Director since 2003
  darrow_photo.jpg

Executive Roles:

Our president and chief executive officer since 2003

Our chairman since 2011

Formerly president of La-Z-Boy Residential, our largest division

Public Boards:

CMS Energy Corp., an integrated energy company

Other Leadership Roles:

Member of the board and the executive committee of Business Leaders for Michigan, a non-profit executive leadership organization

Member of the ProMedica Board of Trustees and Chairman of the ProMedica Monroe Regional Hospital Board of Trustees

Former chairman of the American Home Furnishings Alliance (an industry association) and continues to serve as director emeritus on its board

Former Trustee of Adrian College (Adrian, Michigan) until May 2011

Mr. Darrow's proven leadership skills and extensive knowledge of the company and the furniture industry, developed over his 35 years at La-Z-Boy, qualify him to serve on our board.

    leadership.jpg   bod1.jpg   financial.jpg   technology2.jpg   global.jpg   industry.jpg   retail.jpg   marketing.jpg
  Leadership
Experience
Public Company
Board Experience
Finance Technology Global
Perspective
Sourcing/
Manufacturing
Retail Consumer
Marketing


                     
  Richard M. Gabrys Age 73 Director since 2006
  gabrys_photo.jpg

Our lead director / Audit Committee member / Financial expert / Compensation Committee

Executive Roles:

Retired as vice chairman of Deloitte & Touche, a professional services firm providing audit and financial advisory services

Certified Public Accountant

Former Dean of Wayne State University School of Business Administration

Public Boards:

CMS Energy Corp., an integrated energy company

TriMas Corporation, a manufacturer of high-quality trailer products, recreational accessories, packaging systems, energy products and industrial specialty products

Formerly Massey Energy Company, a coal producer

Other Leadership Roles:

Member of the Management Board of Renaissance Venture Capital Fund, an affiliate of Business Leaders for Michigan, a non-profit executive leadership organization

Board member, The Detroit Institute of Arts

Board member, Karmanos Cancer Institute

Board member, Alliance for Safer Streets in Detroit (Crime Stoppers)

Board member, Detroit Regional Chamber

Mr. Gabrys' extensive knowledge and experience related to public company reporting, international business, mergers and acquisitions, risk oversight, executive compensation and corporate governance matters gained from 42 years in public accounting and service on the boards of multiple publicly-traded companies qualify him to serve on our board.

    leadership.jpg   bod1.jpg   financial.jpg   global.jpg   industry.jpg      
  Leadership
Experience
Public Company
Board Experience
Finance Global
Perspective
Sourcing/
Manufacturing
     

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Proposal No. 1: Election of Directors

                     
  David K. Hehl Age 68 Director since 1977
  hehl_photo.jpg

Audit Committee member / Financial expert / Nominating and Governance Committee member

Executive Roles:

Certified Public Accountant

Retired member of the public accounting firm of Cooley Hehl Wohlgamuth & Carlton P.L.L.C.

Mr. Hehl's long tenure on our board provides a unique historical perspective and appreciation of our heritage. Through his extensive experience in providing audit and tax services as a certified public accountant, along with his experience on the board, Mr. Hehl has developed financial, risk oversight and corporate governance skills that qualify him to serve on our board.

  leadership.jpg   financial.jpg            
  Leadership
Experience
Finance            


                     
  Edwin J. Holman Age 68 Director since 2010
  holman_photo.jpg

Audit Committee member / Financial expert / Nominating and Governance Committee member

Executive Roles:

Interim chief executive officer of The Pantry, Inc. (October 2011 until March 2012)

Formerly chairman of RGIS International (2010-2013), a portfolio company of the Blackstone Group

Formerly chairman and chief executive officer of Macy's Central, a division of Macy's Inc. (an operator of department stores)

Formerly president and CEO Galyans Trading Company, a publicly traded sporting goods chain

Senior executive positions at a variety of retailers, including Bloomingdale's, the Rich's/Lazarus/Goldsmiths divisions of Federated Department Stores, Inc., Petrie Retail, Inc., Woodward & Lothrop, The Carter Hawley Hale Stores, and The Neiman Marcus Group

Public Boards:

Christopher and Banks Corporation (women's apparel)

Formerly The Pantry, Inc. (convenience chain store), and its chairman from 2009 to 2014

Formerly Office Max, an office supply retailer

Formerly Circle International, a provider of international transportation and logistics

Other leadership roles:

National Association of Corporate Directors (NACD) Governance Fellow (2011) and named a "Top 100 Director" by NACD in 2011

Mr. Holman's 40 years of executive and operational experience in department stores and specialty retailing, combined with his experience on public company boards, qualify him to serve on our board.

    leadership.jpg   bod1.jpg   financial.jpg   technology2.jpg   global.jpg   industry.jpg   retail.jpg  
  Leadership
Experience
Public Company
Board Experience
Finance Technology Global
Perspective
Sourcing/
Manufacturing
Retail  

PROXY STATEMENT | 2015 19

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Proposal No. 1: Election of Directors

                     
  Janet E. Kerr Age 60 Director since 2009
  kerr_photo.jpg

Chairman of Nominating and Governance Committee

Executive Roles:

Of counsel to Navé & Cortel (law firm)

Strategic adviser to Bloomberg BNA

Professor Emeritus of the Pepperdine University School of Law

Former chief strategy officer of Exemplify, Inc., a technology knowledge management company until its acquisition by Bloomberg BNA in 2014

Founder and former Executive Director of the Palmer Center for Entrepreneurship and the Law at Pepperdine Law School

Professor Kerr was awarded the Laure Sudreau-Rippe Endowed Chair at Pepperdine University School of Law in 2011

A nationally recognized author, lecturer and consultant in the area of securities law compliance, banking law, corporate governance, and general corporate law

Co-Founder (with HRL Laboratories, LLC) of X-Laboratories

Public Boards:

AppFolio, Inc., provider of cloud-based business management software

TCW Strategic Income Fund, Inc., a NYSE-listed closed-end registered investment company

Tilly's, Inc., a NYSE listed retailer of apparel and accessories

Formerly CKE (Carl Karcher Enterprises), previously a publicly traded NYSE- company

Other leadership roles:

Advisor on corporate issues and entrepreneurial strategies to the People's Republic of China, France, and Thailand

Representative of the U.S. Department of Commerce as a speaker at international events

Ms. Kerr's service on public and private company boards and her skills and experience in the practice of law and corporate governance qualify her for service on our board.

    leadership.jpg   bod1.jpg   technology2.jpg   global.jpg   marketing.jpg   retail.jpg    
  Leadership
Experience
Public Company
Board Experience
Technology Global
Perspective
Consumer
Marketing
Retail    


                     
  Michael T. Lawton Age 56 Director since 2013
  mikelawton_photo.jpg

Chairman of Audit Committee / Financial expert / Compensation Committee

Executive Roles

Chief financial officer of Domino's Pizza, Inc. since August 2010

Executive vice president, supply chain services of Domino's Pizza, Inc. since October 2014

Former roles at Domino's Pizza, Inc.:

Interim chief information officer from October 2011 until March 2012

Executive vice president of international from October 2004 until March 2011

Senior vice president finance and administration of international

Various financial and general management positions with Gerber Products Company

Mr. Lawton's experience as a senior executive of a public company and well-known consumer brand qualifies him to serve on our board.

  leadership.jpg   financial.jpg   technology2.jpg   global.jpg   industry.jpg   marketing.jpg   retail.jpg  
  Leadership
Experience
Finance Technology Global
Perspective
Sourcing/
Manufacturing
Consumer
Marketing
Retail  

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Proposal No. 1: Election of Directors

                     
  Dr. H. George Levy Age 65 Director since 1997
  levy_photo.jpg

Compensation Committee member / Nominating and Governance Committee member

Executive Roles:

Maintains a practice specializing in otorhinolaryngology

Formerly chairman and chief executive officer of USI, Inc., a private firm engaged in consulting on e-commerce, Web design, and systems integration

Chief Executive Officer and founder of Enduenet, Inc., a firm providing electronic medical records for physicians and hospitals

Dr. Levy's entrepreneurial experience, coupled with his board experience, qualifies him for service on our board.

  leadership.jpg   technology2.jpg            
  Leadership
Experience
Technology            


                     
  W. Alan McCollough Age 65 Director since 2007
  mccollough_photo.jpg

Chairman of Compensation Committee

Executive Roles:

Former chairman and chief executive officer of Circuit City Stores, Inc., (retailer of consumer electronics, home office products, entertainment software, and related services) from 2000 to 2006

Public Boards:

VF Corporation (branded apparel) and

The Goodyear Tire & Rubber Company

Formerly Circuit City Stores, Inc.

Mr. McCollough's experience leading a large publicly traded consumer products company, as well as his service on multiple public company boards, qualifies him to serve on our board.

  leadership.jpg   bod1.jpg   financial.jpg   technology2.jpg   global.jpg   industry.jpg   marketing.jpg   retail.jpg
  Leadership
Experience
Public Company
Board Experience
Finance Technology Global
Perspective
Sourcing/
Manufacturing
Consumer
Marketing
Retail

PROXY STATEMENT | 2015 21

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Proposal No. 1: Election of Directors

                     
  Dr. Nido R. Qubein Age 66 Director since 2006
  qubein_photo.jpg

Compensation Committee member / Nominating and Governance Committee member

Executive Roles:

President of High Point University

Chairman of the board of bakery franchisor Great Harvest Bread Company

Public Boards:

BB&T Corporation (banking and financial services)

Other leadership roles:

Author of a dozen books on leadership, sales, communication, and marketing

Serves as advisor to businesses and organizations throughout the world on how to brand and position their enterprises successfully

Dr. Qubein's experience as a business advisor, entrepreneur, director of public companies and leader at multiple companies qualifies him to serve on our board.

  leadership.jpg   bod1.jpg   financial.jpg   technology2.jpg   global.jpg   marketing.jpg   retail.jpg  
  Leadership
Experience
Public Company
Board Experience
Finance Technology Global
Perspective
Consumer
Marketing
Retail  

 
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE ABOVE NOMINEES.

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Compensation Discussion and Analysis

In this section we summarize the compensation programs for our named executive officers (the individuals named in the "Summary Compensation Table" that follows this Compensation Discussion and Analysis). We discuss our compensation objectives and describe each pay element, the role it plays in the overall compensation program, and whether it pertains only to the named executive officers or to a broader group of employees. You should review this section with the pay disclosure tables that begin with the Summary Compensation Table on page 36.

Executive Summary


2015 Operating Performance

Our strategic initiatives have been focused on top line growth, improving our operating income and margin, and operating a profitable and growing retail segment. During fiscal 2015, we continued to progress against our strategic initiatives, which translated into improvements in our operating results. We increased sales by $68.1 million, or 5.0%, increased operating income by $13.9 million, or 15.5%, and generated $86.8 million in cash from operating activities. We returned value to shareholders during the year through $51.9 million of share purchases and $14.5 million of dividend payments, and we continued to invest in our business, including technology improvements to our ERP system and our website and e-commerce platform. In addition, we invested $70.3 million in capital spending, which included spending to complete construction of our new world headquarters, and paid down debt of $7.6 million during the year. As part of our 4-4-5 store growth initiative, during fiscal 2015 we opened eight stores and closed four stores in our company-owned retail segment. We also acquired five stores from independent La-Z-Boy Furniture Galleries® dealers during the year, bringing our total company-owned La-Z-Boy Furniture Galleries® store count to 110 at the end of fiscal 2015. Our 4-4-5 strategy is to penetrate the North American market with 400 La-Z-Boy Furniture Galleries® stores, averaging $4 million in revenue over a 5-year time period that began with fiscal 2014. For a more complete and detailed explanation of our financial results, please review our fiscal 2015 Form 10-K, which can be found on our website at under "SEC Filings."

Fiscal 2015 Compensation Actions

We continue to monitor all of our compensation program elements and practices to determine how they compare with current market practices and align with our overall compensation philosophy. Our compensation committee worked with Hay Group, the committee's independent executive compensation consultant, to evaluate our programs during fiscal 2015, and we made no significant changes to existing programs during the year.

At our annual meeting of shareholders in August 2011, we began providing our shareholders with the opportunity to cast an annual advisory vote on our executive compensation (a "say-on-pay proposal"). Approximately 97% of the votes cast annually by our shareholders beginning in 2011 have been to approve the compensation we paid to our named executive officers. In determining executive compensation for fiscal 2015, the Committee took into account the results of the advisory votes, which reflected shareholder approval of our compensation philosophy, and considered many other factors. We believe our executive compensation programs continue to provide a competitive pay-for-performance package that helps us attract, retain, and motivate our executives.

The Compensation Committee took the following actions during the year:

Reviewed and approved increases to base salaries for the named executive officers (see pg. 28)

Reviewed and approved FY15 Management Incentive Program (MIP) performance levels (sales growth and margin improvement) and FY14 payouts, which were above target levels (see pg. 29)

Approved FY15 long-term incentive awards composed of stock options (50%) and performance-based shares (50%) and payouts and contingently earned awards for prior performance-based equity grants (see pg. 30)

Approved the FY15 Performance Compensation Retirement Plan performance goals and contribution percentages and FY14 company contribution (see pg. 33)

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Compensation Discussion and Analysis

Summary of Executive Compensation Practices

         
  What We Do     What We Don't Do
Pay for performance - Our compensation program for named executive officers emphasizes variable pay over fixed pay, with a majority of their target compensation linked to our financial or market results

Executive stock ownership guidelines - Our expectations for ownership align executives' interests with those of our shareholders

Use relative total shareholder return (TSR) in long-term performance awards

Require company contributions to executive retirement plans to be determined by Company performance

Mitigate undue risk - we have caps on potential incentive payments and a clawback policy on performance-based compensation

Use double-trigger change in control agreements

Engage an independent compensation consulting firm to assist the compensation committee and board with executive program design and compensation reviews

Provide severance and change in control arrangements that are aligned with market practices

Prohibit hedging and short sales by executive officers and directors

   
X
Provide employment agreements

X
Gross up excise taxes upon change in control

X
Reprice options without shareholder approval

X
Pay dividends on unearned performance shares or units

 

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Compensation Discussion and Analysis

Executive Compensation Approach


Our executive pay programs are designed to reflect the following objectives:

Total shareholder return. Align practices with shareholder interests.

Robust stock ownership requirement. The named executive officers are required to own company stock over a sustained period to ensure they have the perspective of long-term shareholders.

Pay for performance. The majority of target pay opportunity for the named executive officers' is provided through annual and long-term incentive award opportunities, which are earned, or increase in value, based on company and stock performance. In addition, long-term incentive opportunities include a portion that is earned based on our relative TSR performance.

Program effectiveness. We have clearly defined programs that provide meaningful award opportunities aligned to the achievement of our business strategy.

Market competitive. Pay packages, including base salaries and incentive opportunities, are designed to be market competitive with business models at U.S. manufacturers, U.S. retailers, and U.S. manufacturers with a retail focus.

Cost efficient. In designing our executive pay programs, we take into account the cost of various possible elements (share usage, cash flow, and accounting and tax impacts).

Our compensation philosophy is to provide a base salary targeted to the median of the competitive market, with the opportunity to earn a significantly higher level of compensation under incentive programs that link executive pay to company performance factors. All named executive officers participate in the same compensation programs and are subject to the same pay policies. The majority of each executive's target compensation is at risk with the amount realized, if any, based on company performance. The pay level and at-risk portion increases as an executive assumes greater levels of responsibility with greater impact on the company. Accordingly, the chief executive officer's pay level and at-risk pay portion are higher than those of other officers due to the greater level of responsibility.

Compensation Committee's Role

Each year, the compensation committee reviews and approves the overall design of our executive pay program and all pay elements for the named executive officers. Three senior executives (chief executive officer, chief financial officer, and chief human resources officer) provide input on program design (including goals and weighting) and information on the company's and the furniture industry's performance. Management is responsible for implementing the executive pay program that the committee approves.

The compensation committee has retained Hay Group as its independent executive compensation consultant to advise the committee on matters related to executive compensation. Hay Group does not provide any services to the company other than its work for the board of directors. Under the committee's direction, Hay Group does interact with members of the senior executive team to provide insight into company and industry practices and ensure that executives are informed with regard to emerging best practices and market trends. The committee has sole authority to retain and terminate consultants used to assist in the evaluation of executive compensation.

The committee reviews Hay Group's report on the consulting firm's independence on an annual basis. The report includes the following factors: (1) other services the consultant provided to us; (2) the fees we paid as a percentage of the consultant's total revenue; (3) the consultant's policies and procedures designed to prevent a conflict of interest; (4) any business or personal relationship of the consultant with a member of the committee; (5) any company stock owned by the consultant; and (6) any business or personal relationships between our executive officers and the consultant. The committee discussed the report and concluded that the consultant's work did not present any conflict of interest. In reaching that conclusion, the committee considered all factors specified in the NYSE's rules related to compensation advisor independence.

Pay-Setting Process Methodology

We assign executives to pay grades based on their duties and responsibilities. For each position, we establish a salary range and the target annual and long-term incentive award opportunities based on market median pay levels. In setting individual pay levels, we consider market pay data, company performance, and the executive's competencies, skills, experience, and performance, as well as our business needs, cost, and internal pay equity relationships.

In setting the named executive officers' pay levels (salary, annual and long-term incentive awards), the committee annually reviews pay data for the chief executive officer and other named executive officers of peer group companies. The peer group is composed of publicly-traded U.S. companies that generate annual revenues between 50% and 200% of our annual revenue and are either our direct competitors or manufacturing companies with a retail

PROXY STATEMENT | 2015 25

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Compensation Discussion and Analysis

focus. In setting fiscal 2015 pay levels, the committee considered the following 16 peer companies:

 
Aaron's, Inc.
Acuity Brands, Inc.
Callaway Golf Company
Ethan Allen Interiors, Inc.
Haverty Furniture Companies, Inc.
Herman Miller, Inc.
Interface, Inc.
Knoll, Inc.
Libbey Inc.
Pier 1 Imports, Inc.
Restoration Hardware Holdings, Inc.
Select Comfort Corporation
Tempur Sealy International
The Ryland Group
The Toro Company
Wolverine Worldwide

To maximize year-over-year comparability, the committee prefers that the peer group remain consistent from year to year. The committee evaluates each member annually to ensure that its inclusion remains appropriate. The committee worked with Hay Group to review the peer group of companies for fiscal 2016. Based on the current peer companies' size and performance, industry, and business model, the committee did not recommend any changes to the current peer group for fiscal 2016.

In addition, we review target total direct compensation for comparable jobs generally in retail and general industry companies based on compensation surveys conducted annually by Hay Group. We use both peer group comparator data and market survey data to benchmark pay. We believe this dual benchmarking provides a more rigorous process to validate pay decisions. Based on our fiscal 2015 compensation, the target total direct compensation of our named executive officers as a group was 100% of the median total direct compensation for comparable general industry companies and 91% of the median total direct compensation for retail companies.

Periodically, we also review market practices for executive retirement benefits, deferred compensation plans, and severance and change in control agreements.

To aid in its oversight of our executive compensation program, the committee requested that Hay Group conduct a total compensation review for each of the named executive officer positions. The analysis included base salary, short-term incentives, and long-term incentives and compared the compensation of the named executive officers with median levels for general industry, retail industry, and the company's peer group. The committee believes its use of data supplied by the independent consultant along with a review of current and historical compensation for the named executive officers provides the committee with a more complete picture of the named executive officers' compensation. In addition, the committee annually reviews estimated amounts to be paid to the named executive officers under various employment termination situations, including severance and a change in control of the company.

Our process for setting compensation for our named executive officers includes a formal, individual performance evaluation each year for each executive. The independent members of our board of directors assess our chief executive officer's performance each year. This assessment includes an evaluation of critical areas, including customer relations, human capital, shareholder value, operating results, and strategic goals. Every third year, the committee's independent compensation consultant coordinates the committee's evaluation of the CEO's performance focusing on the same criteria. The consultant compiles the evaluations provided by each board member and prepares a detailed report for the board. The chief executive officer assesses the individual performance of the other named executive officers each year based on their overall performance throughout the year, accomplishment of specific goals, and their future potential within the organization. This assessment is used in determining base salary as noted below.

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Compensation Discussion and Analysis

Executive Compensation Program Elements


To best achieve our objectives for the executive pay program, we provide a compensation package composed of the following primary elements:

     
Compensation Elements
Component Description Performance-Based?
Base salary
(pg. 28)
Fixed compensation for services rendered No1
Management Incentive
Program (MIP)
(pg. 29)
Short-term incentive plan that pays cash bonuses to participants based on performance against pre-established goals for net sales and operating margin Yes
Long-Term Incentives
(pg. 30)
Annual awards of stock options/stock appreciation rights and performance shares/units. Stock options and stock appreciation rights attain value only if our stock price increases following the date of grant. Performance shares and units are earned based on performance against pre-established goals for net sales and operating margin, and total shareholder return relative to the S&P 600 Yes
Retirement Benefits
(pg. 32)
A qualified 401(k) plan and non-qualified executive deferred compensation plan. Amounts contributed to 401(k) and deferred compensation plans are determined by an executive's election. Matching contributions to 401(k) plans in excess of IRC limitations may be credited to the executive deferred compensation plan No2
Performance Compensation
Retirement Plan
(pg. 33)
A non-qualified retirement account to which contributions (percentage of the sum of base salary plus bonus earned) are made by the company depending on performance relative to pre-established operating income goals Yes

   
(1) We consider performance in making any adjustments to base salaries
(2) Executives may only contribute or elect to defer amounts earned and paid during the year (i.e. actual base salaries and bonuses paid)

The mechanics of these pay elements and our pay decisions are detailed below. In addition, we have change-in-control agreements with our named executive officers, and they participate in a severance plan. Additional information regarding the change-in-control agreements and executive severance plan can be found on page 34. We believe these elements assist us in attracting and retaining quality executive talent and ensure continuity of our leadership.

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Compensation Discussion and Analysis

Total Direct Compensation Mix - Pay-for-Performance

In line with our pay-for-performance philosophy, the majority of each executive's total target direct compensation is performance-based and therefore "at risk." Target total direct compensation is composed of base salary, target bonus, and target value of long-term equity incentives. The chart below shows the percentage of each element in the target direct compensation for our CEO and the average for our other Named Executive Officers.

Target Pay Mix of CEO and Other Named Executive Officers

(as a % of Total Direct Compensation)

   
  ceo_targetcomp.jpg   neo_targetcomp.jpg

Base Salary


We set base salaries for our named executive officers based on their duties, competencies, experience, and performance. We consider market competitiveness, specific job responsibilities, internal pay relationships, and total cost. Consistent with our practices for all management employees, named executive officers are eligible for annual merit salary increases based on individual performance, comparison with market levels, and the total salary budget.

Salary Changes in Fiscal 2015

In April 2014, the committee reviewed the salary levels for each of the then named executive officers. As part of the salary review process, the committee reviewed and considered the performance of each named executive officer, relevant market data provided by Hay Group, the comparison of compensation among various levels of management, and the company's overall performance. The committee approved salary increases for four of the named executive officers, rounded to the nearest thousand dollars.

Salary Changes for Fiscal 2016

In May 2015, the committee reviewed salary levels for each of our named executive officers. In determining the appropriate salary changes, the committee considered a combination of performance, current level of responsibility, and current salary relative to market data provided by Hay Group. Salaries were rounded to the nearest thousand dollars.

The named executive officers' fiscal 2015 and 2016 salaries are presented in the table below.

            
  Executive     Fiscal
2015
Salary
$(1)
    Fiscal
2016
Salary
$(2)
    %
Change
 
  Kurt L. Darrow     910,000     937,000     2.97  
  Louis M. Riccio Jr.     436,000     449,000     2.98  
  Mark S. Bacon, Sr.     500,000     515,000     3.00  
  J. Douglas Collier     380,000     416,000     9.47  
  Darrell D. Edwards     375,000     397,000     5.87  

(1)  Fiscal 2015 salary increases became effective on July 1, two months after the start of the fiscal year for Messrs. Darrow, Riccio and Bacon and May 1 for Messrs. Collier and

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Compensation Discussion and Analysis

Edwards. As a result, the amounts shown here for Messrs. Darrow, Riccio and Bacon are higher than those shown in the 2015 Summary Compensation Table on page 36 below.

(2)  Fiscal 2016 salary increases became effective on July 1 for all of the named executive officers.

Incentive Compensation

We designed the La-Z-Boy Incorporated 2010 Omnibus Incentive Plan to reward executives for achievement of both short-term and long-term corporate performance goals and enhance our ability to retain employees. The committee believes that designing the incentive compensation program with multiple objectives and performance periods promotes behavior consistent with creating shareholder value and reduces any incentive to pursue risky or unsustainable results.

Short Term Incentive Awards (Management Incentive Program)

Our annual cash bonus program, which we refer to as the Management Incentive Program, or MIP, is a short term incentive award plan that we designed to motivate and reward executives for achieving annual goals. Target awards, specified as a percentage of base salary, vary by pay grade. The named executive officers have the opportunity to earn awards between 50% of their target awards if we meet minimum performance requirements to a maximum of 200% of their target incentive opportunity, based on performance. For the named executive officers, we base the financial goals on the company's overall consolidated financial performance.

Fiscal 2015 financial measures were:

 
  financialmeasures_pie.jpg

The committee approved these financial measures because they drive shareholder value and reflect our emphasis on profitability (operating margin) and sales growth. For these purposes, we calculated operating margin without taking into account the impact of restructuring, goodwill and other intangible impairments. After defining required performance, the committee has discretion, in extraordinary circumstances, to modify incentive awards for the named executive officers, either up or down, to ensure a linkage between incentive plan payouts and the quality of performance. The committee did not exercise such discretion in awarding MIP payments for fiscal 2015.

The committee set the target financial performance goals to be challenging but achievable. Over the prior five years (fiscal years 2010 to 2014), our payouts under the MIP for overall company financial performance averaged approximately 96% of target.

Analysis — 2015 MIP Awards Were Above Threshold But Below Target, Reflecting Our Financial Performance

Our 2015 company financial performance results, on a combined basis, exceeded the established threshold levels but reflected operating results that were below our target expectations. In line with our compensation philosophy and in accordance with standards we set at the outset of the year, MIP payments to our named executive officers for 2015 were above threshold levels but below target.

Fiscal 2015 MIP Goals and Results

                 
  Performance Level     Net Sales
(in Billions)
    Operating
Margin
 
  Maximum       $ 1.561     9.53%  
  Target       $ 1.452     8.01%  
  Threshold       $ 1.384     7.06%  
  Actual       $ 1.425     7.21%  
  Individual Metric Payout     80.2%     57.9%  
  Individual Metric Weight     40%     60%  
  Overall Payout (% of Target)           67%  

Our named executive officers' fiscal 2015 target, achieved performance level, and actual MIP awards, expressed as a percentage of base salary, were as follows:

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Compensation Discussion and Analysis

       
  Fiscal 2015
Target
Incentive
(% of base
salary)
Achieved
Performance
Level
(% of target performance)
Actual
Fiscal 2015
Incentive
Payout
(% of base
salary)
Kurt L. Darrow 100% 67% 67.0%
Louis M. Riccio Jr. 75% 67% 50.3%
Mark S. Bacon, Sr. 75% 67% 50.3%
J. Douglas Collier 60% 67% 40.2%
Darrell D. Edwards 60% 67% 40.2%

Fiscal 2016 MIP Awards

The committee approved the following target incentives percentage of base salary for fiscal 2016: Mr. Darrow, 100%; Messrs. Riccio and Bacon, 75%; and Messrs. Collier and Edwards, 60%. The committee established operating margin (60% weight) and net sales (40% weight) as the financial measures for fiscal 2016.

Long-term Equity Incentive Awards


The long-term incentive award provisions of our 2010 Omnibus Incentive Plan provide for equity-based compensation (restricted stock, restricted stock units, options, or other forms of equity based compensation) that we designed to align executive pay with long-term shareholder returns, motivate our executive officers to focus on long-term business objectives, and encourage long-term strategic thinking. The value our executives receive from these awards varies based on the company's performance and the future price appreciation of our common stock.

We establish award levels for each eligible pay grade after considering market median practices and total cost (share usage, accounting, and tax impacts). The committee approves annual equity-based awards that we grant in the first quarter of the new fiscal year. Our chief executive officer has discretion during the year to approve additional limited grants of restricted stock or units to employees other than the named executive officers.

Each year the committee determines the appropriate long-term incentive award types and mix based on our objectives for the grants, as well as market practices, share usage, accounting and tax impacts, and past practices. We review the accounting treatment of the relevant incentive award types, including stock options and performance-based stock awards. We generally design our stock options and performance-based stock awards to enable the company to deduct their cost for tax purposes, while executives who exercise options or receive performance-based shares are taxed at ordinary income rates. However, we may not be able to deduct the cost of restricted stock awards to certain named executive officers for federal income tax purposes in a given year. For more discussion of the tax treatment, see Deductibility of Executive Compensation on page 34.

Fiscal 2015 Grants

Early in fiscal 2015, pursuant to the La-Z-Boy Incorporated 2010 Omnibus Incentive Plan, we granted to our named executive officers two types of stock-based awards, stock options and performance-based shares, which we summarize below.

Stock Options (50% of total fiscal 2015 long-term incentive opportunity)


Stock options entitle executives to purchase stock at the exercise price (closing price on date of grant) for up to ten years. Options expire at the end of ten years if they have not been exercised by that time. Stock options deliver value to executives if the company's stock price rises, directly aligning executive compensation with the value created for shareholders as reflected in stock price appreciation from the date of grant. The stock options we granted in fiscal 2015 vest in equal installments over four years (25% per year) and have a ten-year term.

Once a stock option vests, an executive may purchase stock at the exercise price. The executive realizes value equal to the difference between the exercise price and the price at which our stock is trading on the New York Stock Exchange at the time of exercise.

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Compensation Discussion and Analysis

Performance-Based Stock Awards (50% of total fiscal 2015 long-term incentive opportunity)


Performance-based stock gives our executives the opportunity to earn a defined number of shares of our common stock if we achieve pre-set performance goals. Through performance-based stock awards granted in fiscal 2015, executives will earn stock if the company achieves specified financial goals. The value of any earned shares depends on La-Z-Boy's future stock price. An executive's award opportunity ranges from 50% of the executive's target award if we meet minimum performance requirements to a maximum of 200% of the target award. Following the conclusion of the three-year performance period, we will pay out the shares that our executives have earned.

The number of shares our executives receive, if any, will depend on how the company performs against sales growth and operating margin targets in fiscal years 2015, 2016, and 2017, and against the total shareholder return goal over the three-year performance period. Targets for the awards are based 40% on the growth in sales, 40% on operating margin, and 20% on total shareholder return. Payouts for sales growth and operating margin results are weighted 50% on fiscal 2015 results, 30% on fiscal 2016 results, and 20% on fiscal 2017 results. Total shareholder return is measured over the entire three-year performance period relative to the performance of the S&P 600 small cap index.

       
Metric (Total Weight) Fiscal 2015
Weight
(50%)
Fiscal 2016
Weight
(30%)
Fiscal 2017
Weight
(20%)
Sales Growth (40%) 20% 12% 8%
Operating Margin (40%) 20% 12% 8%
Total Shareholder Return (20%).     20%

Executives may earn shares based on each factor independent of our performance on the other factors. Each factor includes a minimum performance level that must be achieved before any shares are earned based on that factor. No shares are earned if the company performs below the threshold performance level of all three factors. Executives earn the target number of shares if the company performs at the designated target level of all three factors. The actual number of shares executives earn can be more or less than target level depending on the company's performance.

Earnings and Payouts for Prior Equity Grants


Messrs. Darrow, Riccio and Bacon realized value in fiscal 2015 when the restrictions lapsed on a portion of the restricted grant we made in fiscal 2010.

All of our named executive officers earned payouts on the performance-based equity grants we made in fiscal 2013 for the three-year performance period that ended with our fiscal 2015 year end. The following table shows the three one-year performance periods and how the company performed against the sales growth, operating margin, and TSR goals. For these purposes, we calculated operating margins without the impact of restructuring, goodwill and other intangible impairments. Following the end of the three-year performance period we paid out earned shares for those who received performance-based stock awards and cash for those who received performance-based unit awards. The number and value of those shares or units are shown on the Option Exercises and Stock Vested table on page 41.

Performance Period Fiscal 2013-2015

                       
  Goals   Results   Percent of Goal Earned
  Sales
Growth
Operating
Margin
TSR Over
3 Years
  Sales
Growth
Operating
Margin
TSR Over
3 Years
  Sales
Growth
Operating
Margin
TSR Over
3 Years
FY13 7.0% 5.5% 50th
Percentile
  8.2% 5.3% 72.25th
Percentile
  130.0% 80.0% 189%
FY14 6.0% 6.0%   5.7% 6.5%   92.5% 150.0%
FY15 6.0% 6.5%   5.0% 7.2%   75% 170%

The performance-based equity grants we made in fiscal 2014 and fiscal 2015 (which are more fully described above) provide executives with the opportunity to earn a portion of the awards based on sales and operating margin targets established for each of the three years covered by the grant and against the total shareholder return goal over the three-year performance period. Fiscal 2015 goals and results are shown in the following table.

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Compensation Discussion and Analysis

Performance Period Fiscal 2014-2016

                           
        Goals           Results           Percent of Goal Earned  
        Sales (in
Billions)
    Operating
Margin
          Sales     Operating
Margin
          Sales     Operating
Margin
 
  FY14       $ 1.430     6.3%             $ 1.408     6.5%           59%     120%  
  FY15       $ 1.530     7.4%             $ 1.425     7.2%           0%     80%  

Performance Period Fiscal 2015-2017

                           
        Goals           Results           Percent of Goal Earned  
        Sales (in
Billions)
    Operating
Margin
          Sales     Operating
Margin
          Sales     Operating
Margin
 
  FY15       $ 1.452     8.0%             $ 1.425     7.2%           80.15%     58%  

These awards for the grants made in fiscal 2014 and fiscal 2015 are earned contingent on the executive's remaining with the company through the end of the three-year performance period, when they will be paid. For information on the treatment of these awards at retirement, see Payments Made Upon Disability or Retirement on page 43.

Mr. Bacon also exercised stock options during fiscal 2015. The pre-tax amount he realized from these exercises is shown in the fiscal 2015 Option Exercises and Stock Vested table (on page 41).

Fiscal 2016 Grants

The awards we made to our executive officers in the past five fiscal years have included a mix of stock options or stock appreciation rights and performance-based shares or units. The committee determined that equity grants we made on June 15, 2015 (for fiscal 2016) would be composed of stock options and performance-based shares of equal value. We intend this mix to provide a balanced focus on stock-price appreciation and multi-year goal achievement.

The financial measures and related weightings for the performance-based shares will be sales growth (40%), operating margin (40%), and total shareholder return (20%) relative to the performance of the S&P 600 small cap index. The size of each equity award will be based on a percentage of the recipient's base salary, and the percentage will vary by grade. In fiscal 2016, the committee granted our named executive officers stock options totaling 224,999 shares and performance-based equity awards covering 81,687 shares (at target).

Other Executive Compensation Program Elements


Executive Management Stock Ownership Guidelines

The committee annually monitors compliance by our executive management with stock ownership guidelines. We establish a minimum fixed number of shares of company stock that we expect each executive to own based on a multiple of the executive's annual base salary at the time we set the guideline. Executives are expected to achieve compliance with the initial guideline within five years. We reset the stock ownership requirement every three years and did so in June 2013 based on each executive's salary and a representative share price at the end of fiscal year 2013. The committee will reassess the share requirement again in 2016, and, subject to variation in our stock price, executives can expect their requirements to increase as their compensation increases. In November 2014, based on market and peer company analysis, the committee increased the multiple of salary used to establish the guideline for the CEO and other named executive officers. Current stock ownership guideline values and approximate share requirements for the named executive officers are as follows:

     
  Guideline Value
(Multiple of Salary)
Share
Requirement
CEO 5x 237,000
Other named executive officers 3x 63,000 - 78,000

In determining compliance with the guidelines, we include shares owned directly, shares held in a family trust or qualified retirement program, service-based restricted stock, and performance-based shares or units contingently earned in completed performance periods but not yet paid out. As of April 25, 2015, Messrs. Darrow, Riccio, Bacon and Collier were in compliance with their guidelines. Mr. Edwards became an executive officer during fiscal 2015 and has until May 1, 2020 to meet his required ownership level.

Retirement Benefits

We provide retirement benefit plans as an incentive for employees to remain with the company long-term and to

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assist with retirement planning. Our named executive officers are eligible to participate in the same retirement benefit programs that we offer to salaried employees at the corporate level, but employees who are eligible for the MIP, including our named executive officers, are not eligible to participate in the supplemental match that, beginning with fiscal 2013, we have contributed to 401(k) accounts based on our operating income.

Our named executive officers are eligible to participate in our 401(k) and profit-sharing plans, to which the company may contribute. Company matching contributions to our 401(k) plan vary by operating unit and range from 0% to a maximum of 50% of the first 4% contributed by the employee. Company contributions to our profit-sharing plan can range from 0% to 10% of each participant's salary and bonus based on the company's annual profitability. We suspended making contributions to our profit-sharing plan for fiscal 2009 and have not reinstated them.

Performance Compensation Retirement Plan

All of our executive officers and executive management employees participate in the La-Z-Boy Incorporated Performance Compensation Retirement Plan, as do certain other key management employees designated from time to time by our compensation committee. Pursuant to the plan, the compensation committee establishes company performance criteria and minimum threshold performance levels shortly after a fiscal year begins. If the company performs at or above the threshold level for the year, we issue credits to each plan participant's account, and those credits later convert to cash when a retired vested participant receives a distribution. The credits represent a percentage of the base salary and bonus a participant earned during the fiscal year, and the percentages come from a sliding scale that produces a larger contribution for better performance. Contribution credits created in prior years increase each year based on an interest rate that corresponds to yields on 20-year AA corporate bonds. We will delete any contribution credits that we later determine resulted from financial errors or omissions.

At its June 2014 meeting, the compensation committee set total operating income as the sole performance criterion for fiscal 2015. Named executive officers received contribution credits based on operating income performance relative to threshold and target performance levels and individual percentage factors as follows:

   
Performance Level Contribution Percentage Factor*
Target and Above CEO: 35%
Other named executive officers: 25%
Threshold CEO: 17.5%
Other named executive officers: 12.5%
Below Threshold All named executive officers: 0%

* The Contribution percentage increases proportionately for performance between threshold and target levels.

Actual operating income performance of $102,794,000 (adjusted for restructuring income) exceeded the threshold performance level of $97,743,184 but was below the target performance level of $116,331,662. As a result, Mr. Darrow and the other named executive officers received contributions equal to 22.3% and 15.9%, respectively, of the sum of their base salary and bonus earned for fiscal 2015.

At its June 2015 meeting, the compensation committee again set total operating income as the sole performance criteria for fiscal 2016, and the above table showing the relationship between the performance level and contribution percentage will again apply.

Executive Deferred Compensation Plan

Our 2005 Executive Deferred Compensation Plan allows executives to defer pay they have earned. Participants may elect to defer up to 100% of their salaries and annual cash incentive awards made under the MIP. In addition, the company may contribute to this plan any company 401(k) match and profit sharing contributions that cannot be credited to executives' accounts due to the Internal Revenue Code compensation limitations that apply to the tax-qualified retirement plans. Such limits may apply because the executive's contributions and the company's matching contributions were limited by either the annual contribution limit — $18,000 for 2015 — or the annual compensation limit — $265,000 for 2015, or a contribution to the executive's account in the profit-sharing plan would have caused the plan to fail discrimination testing. Named executive officers' salary and bonus deferrals are detailed in the Fiscal 2015 Non-Qualified Deferred Compensation table on page 41. Executives may not defer into this plan any 401(k) plan contributions they made that were returned to them following discrimination testing for highly compensated personnel.

Named Executive Officer Change in Control Agreements

We have change in control agreements with our named executive officers to ensure continuity of our leadership in the event the company's ownership changes. The agreements define a change in control as any event that must be reported in Item 6(e) of Schedule 14A of Regulation 14A issued under the Securities Exchange Act of 1934 that qualifies as a change of control event pursuant to Internal Revenue Code Section 409A. This generally occurs when a person, entity or group acquires ownership of 30% of a company's stock, increases its holding to more than 50% of the value or voting power of a company's stock, or acquires 40% or more of a company's assets, or if a majority of a company's board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the directors who were serving before the date of the appointment or election.

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Compensation Discussion and Analysis

Our agreements provide that a named executive officer will receive severance in cash if we have a change in control and in the succeeding two years (or three years for our CEO), the executive's employment terminates under certain conditions. In that event, we would pay an executive other than our CEO two times the executive's base salary at the time of termination plus two times the average of the annual bonuses the executive received over the previous three years. We would pay our CEO three times base salary and three times average bonus. The executive is responsible for any excise tax, and the company does not pay any gross-up. We utilize a "best-net" approach where we reduce payments to the safe harbor limit to avoid excise tax only if doing so results in a greater after-tax benefit to the executive. During the period that we pay severance, we also continue to provide medical and life insurance benefits. Similar to this severance arrangement, our executives receive accelerated vesting in outstanding stock options or stock appreciation rights issued under the La-Z-Boy Incorporated 2010 Omnibus Incentive Plan following a change in control only if their employment is terminated. Additional information regarding the change in control agreements and estimated termination payments to executives is presented on page 42.

Named Executive Officer Severance Plan

The severance plan for the named executive officers is designed to assist the company in attracting and retaining quality executive talent while providing the company some protection against competition and solicitation by former executives.

The severance plan requires the company to pay a named executive officer severance if the company discharges the executive other than "for cause" or if the executive leaves the company with "good reason." Following a qualifying termination of employment, the company would pay the CEO severance for 24 months and pay the other named executive officers severance for 12 months at the level of their base salary when their employment ended. Discharge "for cause" includes employee acts of fraud, reckless misconduct, substandard performance that is not corrected, and similar acts or failures to act. Resignation for "good reason" includes a resignation triggered by a reduction in the executive's pay unless similarly situated employees are similarly affected or a requirement that the executive relocate. Executives will receive medical and dental benefits during the time they receive severance. If a named executive officer's employment terminates following a change of control of the company, the executive receives benefits under the severance plan only to the extent they exceed benefits the executive receives pursuant to the executive's change in control agreement with the company. Information regarding the change in control agreements and estimated termination payments to executives is presented on page 42.

We established the severance periods of 24 and 12 months based on the market and peer company analysis. To receive severance, executives must comply with non-competition and non-solicitation covenants for the duration of the severance term. Executives are entitled to receive and retain only that portion of the severance pay that is in excess of compensation they receive from other employment during the severance period.

Other Considerations


Deductibility of Executive Compensation

We monitor our executive pay programs with respect to current federal tax law to maximize the deductibility of the compensation we pay to named executive officers. Section 162(m) of the Internal Revenue Code generally precludes public companies from taking a tax deduction for compensation over $1 million paid to a named executive officer unless the compensation is performance-based. We intend that the performance-based stock awards, stock option/stock appreciation rights grants, and the short-term cash incentives, we make under the La-Z-Boy Incorporated 2010 Omnibus Incentive Plan qualify as performance-based compensation exempt from the tax deduction limit. Restricted stock awards generally do not qualify as performance-based compensation.

Recoupment of Incentive Payments


In accordance with our policy, we will require a management employee to reimburse us for annual or long-term incentive payments we made to the employee, and we will eliminate any contribution credits we made for the employee under the Performance Compensation Retirement Plan, to the extent our board of directors determines that the employee engaged in misconduct that resulted in a material inaccuracy in our financial statements or the performance metrics we used to make incentive payments or awards, and the employee received a higher payment as a result of the inaccuracies. If we determine that any contribution credits we made to the La-Z-Boy Incorporated Performance Compensation Retirement Plan were based on erroneous financial statements or other

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Compensation Committee Report

financial errors or misstatements, we will adjust all participant accounts to reflect contribution credits calculated based on complete and accurate financial information.


Compensation Committee Report

The compensation committee reviewed and discussed with management the Compensation Discussion and Analysis. Based on this review and discussion, the compensation committee recommended to the board of directors that the Compensation Discussion and Analysis be included in the company's Annual Report on Form 10-K and this proxy statement.

W. Alan McCollough, Chairman
Richard M. Gabrys
Janet L. Gurwitch
H. George Levy, MD
Dr. Nido R. Qubein
Michael T. Lawton

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Executive Compensation

The Summary Compensation Table and other tables present pay for our named executive officers received for fiscal 2015.

Named Executive Officers as of April 25, 2015

Kurt L. Darrow (age 60), Chairman, President, and Chief Executive Officer

Louis M. Riccio Jr. (age 52), Senior Vice President and Chief Financial Officer

Mark S. Bacon, Sr. (age 52), Senior Vice President and President La-Z-Boy Branded Business

J. Douglas Collier (age 48), Senior Vice President, Chief Marketing Officer and President, International

Darrell D. Edwards (age 51), Senior Vice President and Chief Supply Chain Officer

Summary Compensation Table


The Summary Compensation Table presents fiscal year 2013, 2014, and 2015 "total compensation" (see footnotes for the included pay elements) for the named executive officers, except fiscal 2013 and 2014 information for Messrs. Collier and Edwards is not provided because they were not executive officers in either of those years.

Actual value realized in fiscal 2015 for previously granted long-term incentives is presented in the Option Exercises and Stock Vested table on page 41.

Target annual and long-term incentive opportunities for fiscal 2015 are presented in the Grants of Plan-Based Awards table on page 38.

2015 Summary Compensation Table

                        
  Name and Principal
Position
    Year     Salary
($)
    Stock
Awards
($)(1)
    Option
Awards
($)(2)
    Non-Equity
Incentive Plan
Compensation
($)(3)
    All Other
Compensation
($)(4)
    Total
($)
 
  Kurt L. Darrow     2015     904,983     1,137,501     1,137,503     606,338     422,301     4,208,626  
  Chairman, President &     2014     874,317     1,099,991     1,099,965     900,546     707,041     4,681,860  
  Chief Executive Officer     2013     842,484     859,350     974,534     876,183     39,789     3,592,340  
  Louis M. Riccio Jr     2015     434,158     272,501     272,505     218,165     119,844     1,317,173  
  Senior Vice President &     2014     422,492     265,620     265,618     326,375     204,159     1,484,264  
  Chief Financial Officer     2013     408,325     208,230     236,147     318,494     16,203     1,187,399  
  Mark S. Bacon     2015     496,657     312,507     312,497     249,570     136,530     1,507,761  
  Senior Vice President &     2014     476,991     300,004     299,984     368,475     229,862     1,675,316  
  President La-Z-Boy Branded Business     2013     459,991     234,648     266,093     358,793     264,631     1,584,156  
  J. Douglas Collier     2015     379,993     190,009     190,002     152,757     90,545     1,003,306  
  Senior Vice President, Chief Marketing Officer & President, International                                            
  Darrell D. Edwards     2015     374,993     187,504     187,504     150,747     138,747     1,039,495  
  Senior Vice President &                                            
  Chief Supply Chain Officer                                            

   
(1) Reflects the value at target of the performance-based awards granted during fiscal 2013, 2014 and 2015. We valued the performance-based share awards using the closing price of La-Z-Boy common stock on the date of grant. The committee determined that the grants to NEOs each year would be composed of stock options (50%) and performance-based shares (50%) to align with best practices of U.S. companies utilizing both of these long-term incentive vehicles as part of their executive compensation strategy. Maximum value of performance-based shares is shown below:

                        
        Name           2015           2014           2013  
        Kurt L. Darrow             $ 2,275,002             $ 2,199,981             $ 1,718,700  
        Louis M. Riccio Jr.             $ 545,002             $ 531,240             $ 416,460  
        Mark S. Bacon, Sr.             $ 625,014             $ 600,009             $ 469,296  
        J. Douglas Collier             $ 380,018                          
        Darrell D. Edwards             $ 375,008                          

La-Z-Boy Incorporated | investors.la-z-boy.com 36

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Executive Compensation

   
(2) Reflects the total grant date fair value of the stock option awards granted during the fiscal year. For additional information regarding the assumptions we used in valuing the awards, refer to the Stock-Based Compensation notes to the Consolidated Financial Statements found in Item 8 of Part II of our Forms 10-K (Note 14 for fiscal 2013, Note 16 for fiscal 2014, and Note 14 for fiscal 2015).
(3) Consists of cash awards for the achievement of performance results for the respective year made under our management incentive program. Payments are made in the first quarter following completion of the fiscal year.
(4) All Other Compensation for fiscal 2015 consists of the following:
 
Company contributions to the 401(k) Plan and contributions or credits to the Executive Deferred Compensation and Performance Compensation Retirement Plans of the following amounts: Mr. Darrow $369,673, Mr. Riccio $117,700, Mr. Bacon $133,453, Mr. Collier $89,241 and Mr. Edwards $94,622.

Reimbursement for education costs, including tuition and travel expense, of $39,965 for Mr. Edwards.

Our incremental cost of $43,984 for Mr. Darrow's personal use of company aircraft, which is calculated by multiplying the aircraft's hourly variable operating cost by a trip's flight time. Variable operating costs consist of fuel, landing and parking fees, variable maintenance, variable pilot expenses for travel and any special catering costs and other miscellaneous variable costs. On certain occasions, his spouse and other family members accompanied Mr. Darrow on a flight. No additional incremental operating cost is incurred in such situations under the foregoing methodology. We did not pay Mr. Darrow any amounts in connection with taxes on income imputed to him for personal use of our aircraft.

Company paid life insurance premiums, physicals and tax reimbursements related to company contributions to the deferred compensation plans (made in the prior year).

PROXY STATEMENT | 2015 37

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Executive Compensation

Grants of Plan-Based Awards


The following table provides details of all incentive plan-based awards granted to the named executive officers during fiscal 2015. Specifically, the table presents the following fiscal 2015 incentive awards:

Annual management incentive award (MIP) potential award range (see "Estimated Future Payouts Under Non-Equity Incentive Plan Awards" columns). The actual awards are shown in the Summary Compensation Table (see page 36).

Performance-based shares

Stock options

Fiscal 2015 Grants of Plan-Based Awards

                                          
              Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards (1)
          Estimated Future Payout
Under Equity Incentive
Plan Awards(2)
          All Other
Stock
Awards:
Number
of Shares
or Units
(#)
    All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
    Exercise
or Base
Price of
Option
Awards
($/Share)
    Grant Date
Fair Value
of Stock
& Option
Awards
(3)($)
 
  Name     Grant
Date
    Threshold
($)
    Target
($)
    Maximum
($)
          Threshold
(#)
    Target
(#)
    Maximum
(#)
                               
  Kurt L. Darrow                                                                                
  2015 Annual Incentive (MIP)           180,997     904,983     1,809,966                                                        
  Performance-Based Shares     6/16/2014                             1,926     48,138     96,276                             1,137,501  
  Non-Qualified Stock Options     6/16/2014                                                           108,852     23.63     1,137,503  
  Louis M. Riccio Jr.                                                                                
  2015 Annual Incentive (MIP)           65,124     325,619     651,238                                                        
  Performance-Based Shares     6/16/2014                             461     11,532     23,064                             272,501  
  Non-Qualified Stock Options     6/16/2014                                                           26,077     23.63     272,505  
  Mark S. Bacon, Sr.                                                                                
  2015 Annual Incentive (MIP)           74,499     372,493     744,986                                                        
  Performance-Based Shares     6/16/2014                             529     13,225     26,450                             312,507  
  Non-Qualified Stock Options     6/16/2014                                                           29,904     23.63     312,497  
  J. Douglas Collier                                                                                
  2015 Annual Incentive (MIP)           45,599     227,996     455,992                                                        
  Performance-Based Shares     6/16/2014                             322     8,041     16,082                             190,009  
  Non-Qualified Stock Options     6/16/2014                                                           18,182     23.63     190,002  
  Darrell D. Edwards                                                                                
  2015 Annual Incentive (MIP)           44,999     224,996     449,992                                                        
  Performance-Based Shares     6/16/2014                             317     7,935     15,870                             187,504  
  Non-Qualified Stock Options     6/16/2014                                                           17,943     23.63     187,504  

   
(1) Actual awards could have been up to 200% of target for the MIP based on performance results.
(2) The "Threshold" estimated future payout shown reflects meeting the threshold for just the sales growth or operating margin goal in the third year of the performance cycle.
(3) The value of performance-based shares equals the target number of shares at the closing price of La-Z-Boy stock on the grant date ($23.63). The value of non-qualified stock options is the fair value ($10.45 per share) and will be expensed over the vesting period.

La-Z-Boy Incorporated | investors.la-z-boy.com 38

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Executive Compensation

Outstanding Equity Awards at 2015 Fiscal Year-End


The following table presents all outstanding stock options/stock appreciation rights and unvested stock awards (performance-based stock) held by the named executive officers at the end of the fiscal year. Market values for the unvested stock awards are presented based on the closing price of the company's stock on April 24, 2015, of $27.49.

                                    
                    Option/SAR Awards           Stock Awards  
  Name     Grant
Year
          Number of
Securities
Underlying
Unexercised
Options/SARs
Exercisable
(#)
    Number of
Securities
Underlying
Unexercised
Options/SARs
Unexercisable
(#)(1)
   

Option/
SAR
Exercise
Price
($)

   

Option/
SAR
Expiration
Date

          Number of
Shares or
Units of
Stock that
Have Not
Vested
(#)(2)
    Market Value
of Shares
or Units
of Stock
That Have
Not Vested
($)
    Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)(3)
    Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(3)
 
  Kurt L. Darrow                                                                    
  Performance-Based Shares                                               39,502     1,085,910     49,659     1,365,126  
  Stock Options     2015               108,852     23.63     6/16/2024                                
        2014           23,645     70,935     19.06     6/17/2023                                
        2013           61,914     61,915     11.97     7/11/2022                                
        2012           57,311     19,104     9.35     7/13/2021                                
        2011           34,314         7.75     7/14/2020