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LZB » Topics » Change in Control

This excerpt taken from the LZB DEF 14A filed Jul 3, 2008.
Change in Control
 
The Change in Control agreements are designed primarily to aid in ensuring continued management in the event of an actual or threatened change in control of La-Z-Boy. The agreements provide that in the event the covered employee is terminated other than upon death, disability or for cause within three years after a change in control, the person will be entitled to the following:
 
  •  Lump sum severance payment equal to three times annualized salary and three times the average bonus amount paid in the prior three years
 
  •  Continuation of health benefits and insurance for three years
 
  •  Reimbursement of certain legal fees and expenses incurred by the employee in enforcing the agreement
 
For each officer, the total change in control payments are capped so as not to result in any excise taxes. The agreements automatically renew for an additional one-year period unless either party gives the other 90 days prior notice of non-extension. If a change in control occurs, the agreements automatically extend for 36 months.
 
Under the 2004 Long-term Equity Award Plan, unvested stock options and restricted shares immediately vest upon a change in control. Performance-based shares would be paid based on performance to date. The table shows the value of the earned 2008 performance-based stock awards.
 
This excerpt taken from the LZB DEF 14A filed Jul 3, 2007.
Change in Control
 
The Change in Control agreements are designed primarily to aid in ensuring continued management in the event of an actual or threatened change in control of the Company. The agreements provide that in the event the covered employee is terminated other than upon his death, disability or for cause within three years after a change in control of the Company, the person will be entitled to the following:
 
  •  Lump sum severance payment equal to three times his annualized salary and three times the average bonus amount paid in the prior three years
 
  •  Continuation of health benefits and insurance for three years
 
  •  Reimbursement of certain legal fees and expenses incurred by the employee in enforcing the agreement
 
The agreements automatically renew for an additional one-year period unless either party gives the other 90 days prior notice of non-extension. If a change in control occurs, the agreements automatically extend for 36 months.
 
Under the 2004 Long-term Equity Award Plan, unvested stock options and restricted shares immediately vest upon a change in control. Performance-based shares would be paid out based on performance to date. In the table, the potential payout under outstanding awards is estimated as zero since the Company does not expect to achieve the minimum performance goals.


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Table of Contents

This excerpt taken from the LZB 10-Q filed Feb 14, 2006.

Change in Control

“Change in Control” means any change required to be reported in Item 6(e) of Schedule 14A of Regulation 14A issued under the Securities Exchange Act of 1934 (the “Exchange Act”) that qualifies as a change of control event pursuant to Code Section 409A. A Change in Control will be considered to have occurred as of the date that:

a.

With respect to a change in the ownership of the Company in compliance with Proposed Treasury Regulation § 1.409A-3(g)(5)(v), the date that any person or Group acquires ownership of stock of the corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of such corporation.

   
b.

With respect to a change in the effective control of the Company pursuant to Proposed Treasury Regulation § 1.409A-3(g)(5)(vi), the date either:

   
(1)         Any one person, or more than one person acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership (including acquisition of beneficial ownership within the meaning of Rule 13d-3 promulgated under the Exchange Act) of stock of the corporation possessing 35 percent or more of the total voting power of the stock of such corporation; or
   
(2)  A majority of members of the corporation’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 members of the corporation’s board of directors prior to the date of the appointment or election; — provided, however, that (to the extent permitted under Code Section 409A) any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a three-quarters of the directors then comprising the Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without objection to such nomination) shall be considered as though such person were a member of the Incumbent Board;
   
c.

With respect to a change in the ownership of a substantial portion of the Company’s assets pursuant to Proposed Treasury Regulation § 1.409A-3(g)(5)(vii), the date that any one person, or group acquires (or has acquired during the 12- month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value (as defined in 1.409A-3(g)(5)(vii)) equal to or more than 40 percent of the total gross fair market value of all of the assets of the corporation immediately prior to such acquisition or acquisitions.


As used above:

"Group" means a group as defined in Prop. Treas. Reg. ss.ss. 1.409A-3(g)(v)(B), 1.409A-3(g)(5)(vi)(D), or 1.409A-3(g)(5)(vii)(C), as applicable and within the meaning of Sections 13(d)(3) and 14(d)(2) of the Exchange Act).

EXCERPTS ON THIS PAGE:

DEF 14A
Jul 3, 2008
DEF 14A
Jul 3, 2007
10-Q
Feb 14, 2006

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