Guidelines

CORPORATE GOVERNANCE GUIDELINES
 

The Board of Directors (the “Board”) of La-Z-Boy Incorporated (the “Company”) has adopted
these guidelines to assist the Board in the exercise of its duties and responsibilities and serve
the best interests of the Company and its shareholders.
ROLE OF THE BOARD OF DIRECTORS
The Board oversees and provides policy guidance on the business and affairs of the Company.
It monitors overall corporate performance, the integrity of the Company’s financial controls, and
the effectiveness of its legal compliance programs. The Board oversees management and plans
for the succession of key executives. The Board oversees the Company’s strategic and
business planning process. This is generally accomplished by a year-round process culminating
in a day-long Board review of the Company’s updated Corporate Strategic Plan and the
principal issues the Company expects to face in the future. Subsequently, the Board reviews the
Company’s business plan, the next year’s capital expenditure plan, and related key financial
and supplemental objectives.
DIRECTOR QUALIFICATIONS
Directors should have the highest professional and personal ethical values and all times act in
accordance with the Company’s Code of Business Conduct. Director candidates are selected
for, among other things, their integrity, independence, diversity of experience, leadership,
substantial accomplishments, prior or current association with institutions noted for their ethical
standards, and their ability to exercise sound judgment and to provide counsel to management.
They should be able to provide insights and practical wisdom based on their particular
experience and expertise. They should be committed to enhancing shareholder value and have
sufficient time to effectively carry out their duties.
Directors who also serve as CEOs (or in equivalent positions) of public companies should not
serve on more than two Boards of public companies in addition to the Company’s Board, and
other directors should not serve on more than four Boards of public companies in addition to the
Company’s Board.
DIRECTOR INDEPENDENCE
The Company requires that a substantial majority of the Board be independent directors, as
defined by the listing standards of the New York Stock Exchange (NYSE). To reach a
determination that a director is “independent” under the NYSE listing standards, the Board must
affirmatively determine that the director, in addition to satisfying other requirements of the NYSE
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listing standards relating to independent directors, has no direct or indirect material relationship
with the Company. To assist the Board in making this determination, the Board has adopted the
following standards (in which “Company” means La-Z-Boy Incorporated or its subsidiaries):
• No director who is an employee or executive officer or a former employee or executive
officer of the Company can be independent until three years after termination of service.
• No director who is, or in the past three years has been, affiliated with or employed by the
Company’s present or former independent registered public accounting firm can be
independent until three years after the end of the affiliation, employment, or auditing
relationship.
• No director can be independent if he or she is, or in the past three years has been, part
of an interlocking directorship in which any of the Company’s executive officers serves
on the compensation committee of another company that employs the director.
• No director can be independent if he or she is receiving, or in the last three years has
received, more than $120,000 during any 12-month period in direct compensation from
the Company, other than director and committee fees and pension or other forms of
deferred compensation for prior service (provided the compensation is not contingent in
any way on continued service).
• No director can be independent if he or she is currently an executive officer or employee
of an entity that makes payments to or receives payments (other than contributions to a
tax-exempt organization or charity) from the Company for property or services that, in
any single fiscal year, exceed the greater of $1 million or 2% of the other entity’s
consolidated gross revenues until three years after the payments fall below that
threshold.
• Directors with immediate family members in the foregoing categories are subject to the
same three-year restriction.
• The following categorical standards identify relationships that a director may have with
the Company that will not be considered material:
o If a director is an executive officer, director, or shareholder of another company that
does business with the Company and the annual revenues derived from that
business are less than 1% of either company’s total revenues.
o If a director is an executive officer, director, or shareholder of another company that
is indebted to the Company, or to which the Company is indebted, and the total
amount of either company’s indebtedness to the other is less than 1% of the total
consolidated assets of each company; or if the director is an executive officer,
director, or shareholder of a bank or other financial institution (or its holding
company) that extends credit to the Company on normal commercial terms and the
total amount of our indebtedness to the bank or other financial institution is less than
3% of the Company’s total consolidated assets.
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o If a director is an executive officer or director of another company in which the
Company owns common stock, and the amount of the Company’s common stock
interest is less than 5% of the total shareholders’ equity of the other company.
o If any family member of a director is or was employed by the Company in a nonexecutive capacity and the family member’s compensation has not exceeded
$120,000 in any one fiscal year.
o If a director is a director, officer, or trustee of a charitable organization, the
Company’s annual charitable contributions to the organization (exclusive of giftmatch payments) are less than 1% of the organization’s total annual charitable
receipts, all of the Company’s contributions to the organization were approved
through the Company’s normal approval process, and no contribution was made “on
behalf of” any of the Company’s officers or directors; or if a director is a director of
the La-Z-Boy Foundation.
o If a director is a member of, employed by, or of counsel to a law firm or investment
banking firm that performs services for the Company, payments made by the
Company to the firm during a fiscal year do not exceed 1% of the firm’s gross
revenues for the fiscal year, and the director’s relationship with the firm is such that
his or her compensation is not linked directly or indirectly to the amount of payments
the firm receives from the Company.
DIRECTOR RESPONSIBILITIES
The directors’ basic responsibility is to exercise their business judgment to act in what they
reasonably believe to be the best interests of the Company and its shareholders, conducting
themselves in accordance with their duties of care and loyalty. The Company expects directors
to spend the time needed to understand the Company’s business and carry out their
responsibilities as directors, including meeting as frequently as necessary to properly discharge
those responsibilities, attending the Company’s annual meeting, attending substantially all of the
meetings of the Board and the committees on which they serve, and reviewing in advance all
materials for those meetings.
MAJORITY VOTE STANDARD FOR DIRECTOR ELECTIONS
Any nominee for director who, in an uncontested election, fails to receive a majority of the votes
cast must, promptly following certification of the vote, deliver his or her resignation to the Board
for its consideration. An election will be treated as contested when there are more nominees
than positions to be filled.
Within 90 days following certification of the shareholder vote, the Board, excluding the director
in question, will decide whether to accept the offered resignation, and the Company will
promptly disclose the Board’s decision in a document filed with the SEC.
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SELECTION PROCESS, BOARD SIZE AND COMMITTEES
Directors are elected each year by the shareholders at the Company’s annual meeting.
Shareholders may recommend a nominee by following the procedures set forth in the
Company’s bylaws. All recommendations are brought to the attention of the Nominating and
Governance Committee. If a vacancy occurs between annual meetings, the Board may elect a
director to serve until the next annual meeting.
The bylaws provide that the number of directors may range from eight to fourteen and is
established by Board resolution. The Board’s size is assessed at least annually by the
Nominating and Governance Committee, and changes are recommended to the Board when
appropriate. The Board has the power to amend the bylaws, including to increase or decrease
the size of the Board.
The Board has three standing committees: Audit, Nominating and Governance, and
Compensation. All committees are comprised solely of independent directors as defined by the
NYSE. Each committee chair determines the agenda, frequency, and length of the committee
meetings.
ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS
Directors are encouraged and provided opportunities to talk directly to any member of
management regarding any questions or concerns the director may have. In addition, senior
managers are called upon to report to the Board and participate in Board discussions on
matters within their spheres of responsibility.
The Board and each of its committees have the authority at any time to retain independent
financial, legal, or other advisors.
DIRECTOR RETIREMENT POLICY
Directors normally will not stand for re-election after reaching age 73. The Board, however,
reserves the right to nominate candidates age 73 or older when the Board determines that it is
the best interests of the Company and its shareholders to do so.
ROLE OF THE LEAD DIRECTOR
If the Board determines that the Chairman of the Board is not independent under the standards
established within these guidelines, the directors will elect a Lead Director from among the
independent directors. The Lead Director will have the responsibilities set forth in the Lead
Director Charter adopted by the Board.
EXECUTIVE SESSIONS
Non-employee directors meet in executive session at most regularly scheduled Board meetings
and no less than four times annually. The sessions are chaired by the Lead Director, or in his or
her absence, the chairperson of the Nominating and Governance Committee. Any non
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employee director can request that an executive session be scheduled or place an item on the
agenda.
SUCCESSION PLANNING
Annually, the Board receives and reviews a report on the planning for succession in all senior
management positions, including qualified candidates and development plans to strengthen
their skills and qualifications.
DIRECTOR ORIENTATION AND EDUCATION
The Company provides new directors with orientation to the Company, its history, products, and
organization. Periodically, outside counsel meets with the Board to discuss matters of regulation
and Board responsibility. The Company provides membership in the National Association of
Corporate Directors (NACD) for all directors and encourages them to participate in director
education programs, for which expenses are reimbursed. Furniture industry trade publications
are provided to directors. Normally, at least one Board meeting per year will be held at a
company location away from the headquarters. Directors are encouraged to occasionally visit
either the spring or fall International Home Furnishing Market in High Point, North Carolina,
where almost all of the Company’s product units maintain showrooms and introduce new
product to their customers. Random visits to the Company’s sales locations by directors are
also encouraged.
EVALUATION OF BOARD AND COMMITTEE PERFORMANCE
The Board and each Board committee conduct a self-evaluation annually. The Nominating and
Governance Committee oversees this self-evaluation process. The committee has in the past
retained consultants to assist in this process, and may do so in the future.
CHIEF EXECUTIVE OFFICER PERFORMANCE REVIEW
The Board annually reviews the CEO performance and may retain consultants to assist in the
process. The Lead Director and non-employee directors meet in executive session with the
CEO to review and discuss the CEO’s performance.
DIRECTOR COMPENSATION AND STOCK OWNERSHIP REQUIREMENTS
The Company seeks to provide non-employee directors compensation that is competitive and
includes a significant equity element, thus linking their compensation to long-term shareholder
returns. The Company does not have a retirement plan for non-employee directors. The
Company does not pay employee directors additional compensation for their services as
directors. The Compensation Committee periodically reviews non-employee director
compensation and recommends changes as appropriate to the Board to ensure that the total
director compensation remains competitive and appropriate.
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Non-employee directors are required, within five years of joining the Board, to establish and
maintain an investment in La-Z-Boy equity (including deferred or restricted stock units) at least
equal in value to five times the standard annual cash retainer. The CEO is currently required to
maintain an investment in La-Z-Boy equity (including deferred or restricted stock units) at least
equal in value to five times his base salary.
BOARD AGENDA AND MEETINGS
The Chairman coordinates with the CEO (when the positions are split), the Lead Director, and
the chairpersons of the standing committees, to set the schedule, time, principal subject matters
to be addressed, and length for Board meetings. The regular schedule is circulated to the
directors at least a full year in advance of meetings to facilitate their scheduling and to work
around any pending schedule conflicts. Committee chairpersons schedule their meetings in
coordination with the Chairman. Any director can request that a subject be added to a meeting
agenda. In addition to the five or more regularly scheduled meetings, non-scheduled meetings
can be called upon proper notice in accordance with the bylaws at any time to address specific
subjects. The annual meeting of shareholders is scheduled in conjunction with one of the
regularly scheduled Board meetings.
The Chairman collaborates with the CEO (when the positions are split), the Lead Director, and
committee chairpersons to establish the agenda for each Board meeting, taking into account
input and suggestions from other members of the Board and management. The directors also
provide input for additional pre-meeting materials. They may make suggestions for the agenda
to the Chairman or any committee chairperson at any time. The agendas for Board meetings
provide opportunities for the operating heads of the major businesses of the Company and other
senior executives to make presentations to the Board.
CODE OF BUSINESS CONDUCT & REPORTING OF CONCERNS
The Board expects all of the Company’s directors and officers to comply with the highest
standard of ethics in all matters respecting company affairs. To further this compliance, the
Board has adopted the Company’s Code of Business Conduct.
The Audit Committee periodically reviews the system for assuring compliance with the code and
has procedures in place to receive, retain, and address complaints regarding accounting,
internal accounting controls, or auditing matters. A toll free number connected with an impartial
third party is available to all employees to report, in confidence, any suspected financial
irregularity or violation of the code. The Audit Committee receives regular reports on the nature
and disposition of reported instances of suspected violations. The organization operating the
call-in service has the authority to directly contact the Audit Committee upon receiving a report
of a potentially serious violation.
REVIEW OF GUIDELINES AND DISCLOSURE OF GOVERNANCE POLICIES
The Nominating and Corporate Governance Committee will, from time to time as it deems
appropriate, review these guidelines and recommend any proposed changes to the Board for
approval.
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The Company posts on its website copies of the current version of these guidelines, the
Company’s Code of Business Conduct, the committee charters, and the Lead Director Charter.

These guidelines were last amended by the Board effective May 1, 2018