Fiscal year 20XX cycle of the LA-Z-BOY INCORPORATED 2022 OMNIBUS INCENTIVE PLAN AWARD AGREEMENT
EXHIBIT 10.1
Fiscal year 20XX cycle of the
LA-Z-BOY INCORPORATED 2022 OMNIBUS INCENTIVE PLAN
This Agreement (the “Agreement”) is made effective ________, 20XX (the “Grant Date”) between La-Z-Boy Incorporated (the "Company") and ________ (the "Employee").
This Agreement confirms grants to the undersigned Employee of Restricted Stock Units and Performance Units, and outlines terms of a MIP Award payable to such Employee pursuant to and subject to all terms and conditions of the La-Z-Boy Incorporated 2022 Omnibus Incentive Plan (“Plan”). This Agreement is also subject to the award notification letter dated _______, 20XX (“Notification”) as well as the applicable specific and general conditions set forth in attached Appendix A. Capitalized terms used in this Agreement which are not defined herein shall have the meaning provided in the Plan.
The principal features of the foregoing grants and award are as follows:
Restricted Stock Units
TOTAL RESTRICTED STOCK UNITS: XXX
| SCHEDULED VESTING DATES: | NUMBER OF RSUS: | ||||
| ______, 20XX | XXX | ||||
| ______, 20XX | XXX | ||||
| ______, 20XX | XXX | ||||
| ______, 20XX | XXX | ||||
SETTLEMENT: COMMON STOCK
Performance Units (20XX – 20XX Cycle)
MAXIMUM PERFORMANCE UNITS* «FYXXX_PBS_Shares_at_MAX_wTSR_»
TARGET PERFORMANCE UNITS* «FYXXX_PBS_Shares_at_TARGET_wTSR_»
SETTLEMENT: COMMON STOCK
Vesting based on attainment of Performance Goals to be established by the Compensation Committee of the Board (the “Committee”).
MIP Award
Your MIP Award payment will be calculated by multiplying (a) your Fiscal Year 20XX Eligible Earnings (based on your base salary in effect during Fiscal Year 20XX, calculated in accordance with the Company’s payroll system), times (b) your Target MIP Incentive Opportunity shown below, times (c) the Company Achievement Percentage, which will be determined by how the Company performs in comparison to target goals in sales (50% weighting) and operating margin (50% weighting) during the fiscal year. “Eligible Earnings” will be pro-rated for changes in your base salary level during Fiscal Year 20XX and will not include base salary attributable to any period in which you are not eligible to participate in the MIP, such as due to a change in position during the performance year. In addition, “Eligible Earnings” does not include (a) base salary for any period during which you are on a leave of absence, (b) severance pay, or (c) pay for any unused, accrued vacation time (whether paid due to applicable law, a separation from service, or any other reason).
PERFORMANCE PERIOD: Fiscal Year 20XX
TARGET MIP INCENTIVE OPPORTUNITY: ___% of Eligible Earnings
COMPANY ACHIEVEMENT PERCENTAGE RANGE: 0% - 200%*
*The Committee shall have the right to reduce or eliminate the amount that would otherwise be payable to you based on the achievement of the performance goals with respect to the MIP Award for Fiscal Year 20XX if the Committee determines, in its sole discretion, that such reduction or elimination is appropriate and in the best interests of the Company based on such other factors considered by the Committee, in its sole discretion, including Company performance on other metrics, macroeconomic factors and/or individual performance.
Your signature below indicates your agreement that the foregoing grants and award are subject to all of the terms and conditions contained in the Plan, in this Agreement, in attached Appendix A and in the accompanying Notification. Your signature below also indicates your agreement that the Awards granted to you pursuant to this Agreement will be subject to forfeiture, recovery by the Company or other action pursuant to the policy on recoupment of incentive compensation adopted by the Company pursuant to the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act and the implementing rules and regulations thereunder or as otherwise required by law or regulation.
Your signature below also indicates that you have received and read a copy of the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated by reference. In the event of a conflict between any term or provision contained in this Agreement and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
| La-Z-Boy Incorporated | Employee | |||||||
Xxxxxxx X. Xxxxxxxxxxx President and Chief Executive Officer | Name | |||||||
| Date | ||||||||
APPENDIX A - TERMS AND CONDITIONS
Terms not defined in this Appendix A are, where applicable, defined as in the La-Z-Boy Incorporated 2022 Omnibus Incentive Plan (the “Plan”).
| 1. | Stock Options | ||||
A. Exercising Options
Subject to the terms of Section 13 (Payment) and Section 18.3 (Withholding Taxes) of the Plan, you may exercise Options that have vested by delivering a notice of exercise as described in Section 7 of this Appendix A or by execution of the stock exercise procedures established on the Xxxxxxx Xxxxx Benefits OnLine® website. When you exercise an Option, you pay the xxxxx xxxxx for Company stock. You may retain the stock (and, if you choose, sell it at a later date), or you may direct that the stock be sold immediately, subject to compliance with the Company’s xxxxxxx xxxxxxx policies. The Company has engaged Xxxxxxx Xxxxx to provide services for exercising Options.
You may exercise Options in one of three ways:
(a) Cash Purchase Exercise
You pay the xxxxx xxxxx multiplied by the number of shares covered by the Options you are exercising, plus applicable taxes, by (i) sending a check or wiring funds to Xxxxxxx Xxxxx or (ii) having sufficient funds in your Xxxxxxx Xxxxx account before you deliver notice of exercise. All of the shares covered by the Options being exercised are credited to your Xxxxxxx Xxxxx account.
(b) Cashless Exercise
You may exercise your Options without any initial cash outlay. There are two methods of cashless exercise:
(i) Cashless Hold - Xxxxxxx Xxxxx xxxxx enough shares covered by the Options you are exercising to purchase all of the shares covered by the Options being exercised and to pay the exercise price and applicable taxes, costs, and fees. The remaining shares are credited to your Xxxxxxx Xxxxx account.
(ii) Cashless Sell - Xxxxxxx Xxxxx xxxxx all shares covered by the Options you are exercising, deducts the cost of the stock you purchased plus applicable taxes, costs, and fees, and sends you a check or wires the net proceeds to your bank account.
Certain participants are required to have cashless exercises executed in certain circumstances, including to satisfy tax liabilities.
(c) Stock Swap
You may exercise your Options by delivering to Xxxxxxx Xxxxx shares of Company stock that you have owned for at least six months, duly endorsed for transfer to the Company, having a fair market value on the date you deliver it equal to the xxxxx xxxxx multiplied by the number of shares covered by the Options you are exercising, plus applicable taxes.
You have access to the secure Benefits OnLine® website at xxx.xxxxxxxx.xx.xxx. Benefits OnLine provides grant summaries, modeling, and the ability to exercise Options and direct that stock acquired upon exercise be sold. Due to trading restrictions and other equity grant policies applicable to the Company’s executive officers, the Company’s executive officers and other individuals subject to Section 16 of the Exchange Act are required to conduct equity award transactions through the Xxxxxxx Xxxxx Financial Advisor team designated to service the accounts.
B. Termination of Options
The Options granted by this Agreement will terminate and be of no force or effect at the close of business on the ten-year anniversary of the Option Date, unless they terminate earlier as provided below.
If you cease to be employed by the Company or one of its Subsidiaries, your Options will terminate or be exercisable as follows:
Termination of employment. If you cease to be an Employee for any reason other than for Cause, Retirement (as defined below), death, Disability or a Change in Control Termination, each as described below, your unvested Options will immediately terminate and your vested Options will automatically terminate ninety (90) days after you cease to be an Employee except for any Options that expire earlier by their terms. For purposes of this Agreement, the following are not deemed to be a termination of employment: (i) a transfer from the Company to one of its Subsidiaries, from a Subsidiary to the Company, or between Subsidiaries; or (ii) a leave of absence authorized by the Company or a Subsidiary. For purposes of the Plan, termination of employment will be deemed to occur on the date on which you are no longer obligated to perform services for the Company or any of its Subsidiaries and your right to reemployment is not guaranteed either by statute or contract, regardless of whether you continue to receive compensation from the Company or any of its Subsidiaries.
Cause. If you are terminated for Cause, your Options, whether or not vested, will terminate immediately upon such termination.
Retirement. If you Retire, with the consent of the Company, all of your unvested Options granted at least ten months earlier will immediately fully vest upon such Retirement, and you may exercise your Options during the following 36 months except for Options that expire earlier by their terms. Options granted less than ten months before you Retire will terminate immediately upon your Retirement.
Death or Disability. If you cease to be an Employee because you die or you become Disabled, all of your unvested Options will immediately fully vest upon such death or Disability, and you (or your beneficiary or personal representative) may exercise your Options during the 36 months after you become Disabled or die (whichever occurs first) except for Options that expire earlier by their terms.
Change in Control Termination. In the event of the consummation of any Corporate Transaction and you cease to be an Employee due to (i) a termination by the Company without Cause (as defined below) or (ii) by you due to Good Reason (as defined below), in each case, within two years following the consummation of such Corporate Transaction, your Option will be fully vested and may be exercised in full, beginning on the date of such termination and for the one-year period immediately following such termination.
| 2. | Stock Appreciation Rights | ||||
A.Exercising SARs
Subject to the terms of Section 9 (Terms and Conditions of Stock Appreciation Rights) and Section 18.3 (Withholding Taxes) of the Plan, when you exercise SARs, you are entitled to receive in cash an amount equal to the number of SARs exercised multiplied by the difference between the fair market value of one share of La-Z-Boy stock on the date of exercise and the SAR xxxxx xxxxx. The Company has engaged Xxxxxxx Xxxxx to provide services for exercising SARs.
B.Termination of Stock Appreciation Rights
The SARs granted by this Agreement will terminate and be of no force or effect at the close of business on the ten-year anniversary of the date they are granted, unless they terminate earlier as provided below.
If you cease to be employed by the Company or one of its Subsidiaries, your SARs will terminate or be exercisable as follows:
Termination of employment. If you cease to be an Employee for any reason other than for Cause, Retirement, death, Disability or a Change in Control Termination, each as described below, your unvested SARs will immediately terminate and your vested SARs
will automatically terminate thirty (30) days after you cease to be an Employee except for any SARs that expire earlier by their terms. For purposes of this Agreement, the following are not deemed to be a termination of employment: (i) a transfer from the Company to one of its Subsidiaries, from a Subsidiary to the Company, or between Subsidiaries; or (ii) a leave of absence authorized by the Company or a Subsidiary. For purposes of the Plan, termination of employment will be deemed to occur on the date on which you are no longer obligated to perform services for the Company or any of its Subsidiaries and your right to reemployment is not guaranteed either by statute or contract, regardless of whether you continue to receive compensation from the Company or any of its Subsidiaries.
Cause. If you are terminated for Cause, your SARs, whether or not vested, will terminate immediately upon such termination.
Retirement. If you Retire, with the consent of the Company, all of your unvested SARs granted at least ten months earlier will immediately fully vest upon such Retirement, and you may exercise your SARs during the following 36 months except for SARs that expire earlier by their terms. SARs granted less than ten months before you Retire will terminate immediately.
Death or Disability. If you cease to be an Employee because you die or you become Disabled, all of your unvested SARs will immediately fully vest upon such death or Disability, and you (or your beneficiary or personal representative) may exercise your SARs during the 36 months after you become Disabled or die (whichever occurs first) except for SARs that expire earlier by their terms.
Change in Control Termination. In the event of the consummation of any Corporate Transaction and you cease to be an Employee due to (i) a termination by the Company without Cause or (ii) by you due to Good Reason, in each case, within two years following the consummation of such Corporate Transaction, your SARs will be fully vested and may be exercised in full, beginning on the date of such termination and for the one-year period immediately following such termination.
| 3. | Restricted Stock and Stock Units | ||||
Restricted stock will be settled in Company stock upon the lapse of vesting conditions and Restricted Stock Units will be settled in Company stock except as otherwise provided for in your Award Agreement, with any Restricted Stock Units settled within 60 days following the applicable vesting date or vesting event.
Restricted Stock - Termination of Employment. If you cease to be an Employee other than because you die, become Disabled or due to a Change in Control Termination, you forfeit any Restricted Stock that have not vested, or for which applicable restrictions and
conditions have not lapsed, and you have no further rights with respect to your Award of Restricted Stock. If, during the restriction period, you (i) die, (ii) become Disabled or (iii) are terminated by the Company without Cause or by you due to Good Reason within the two-year period following the consummation of a Corporate Transaction, all of your Restricted Stock will immediately vest and all transfer restrictions imposed by the Plan or this Agreement will immediately terminate.
Restricted Stock Units – Termination of Employment. If you cease to be an Employee other than because you die, become Disabled, Retire or due to a Change in Control Termination, you will forfeit any Restricted Stock Units that have not vested, or for which applicable restrictions and conditions have not lapsed, and you have no further rights with respect to your Award of Restricted Stock Units. If you die during the applicable vesting period, all of your Restricted Stock Units will immediately vest and your Restricted Stock Units will be settled in Company stock (or, if specified in your Award Agreement, cash) within 60 days following such death. If you terminate due to Disability or if you Retire, with the consent of the Company, then the Restricted Stock Units shall remain outstanding and shall be settled in Company stock (or, if specified in your Award Agreement, cash) within 60 days following each applicable vesting date; provided, however, that any Restricted Stock Units granted less than ten months before you Retire will terminate immediately upon your Retirement; provided further, that if you are terminated due to Disability or Retire within the two-year period following a Corporate Transaction, the Restricted Stock Units shall be settled immediately upon such termination to the extent required to comply with Section 409A of the Code. In the event of the consummation of any Corporate Transaction and you cease to be an Employee due to (i) a termination by the Company without Cause or (ii) by you due to Good Reason, in each case, within two years following the consummation of such Corporate Transaction, all of your Restricted Stock Units will immediately vest upon such termination and all transfer restrictions imposed by the Plan or this Agreement will immediately terminate and such Restricted Stock Units will be settled in Company stock (or, if specified in your Award Agreement, cash) within 60 days following such termination of employment; provided, however, if the Corporate Transaction is a not a “change in control event” within the meaning of Section 409A of the Code or the settlement upon such termination of employment would not be permitted under Section 409A of the Code, then the Restricted Stock Units shall vest and shall be settled in Company stock (or, if specified in your Award Agreement, cash) within 60 days following each applicable vesting date or, if earlier, within 60 days following your death.
Restricted Stock Units – Dividend Equivalent Rights. The Restricted Stock Units include a right to dividend equivalents equal to the value of any dividends paid on the Company stock for which the dividend record date (the “Record Date”) occurs between the grant date and the date the Restricted Stock Units are settled or forfeited. Each dividend equivalent entitles you to receive the equivalent cash value, without interest, of any such
dividends paid on the number of shares of Company stock underlying the Restricted Stock Units that are outstanding on the Record Date. Dividend equivalents shall be subject to the same vesting conditions and payment terms set forth herein as the Restricted Stock Units to which they relate.
| 4. | Performance Units | ||||
Performance Units will be settled in Company stock except as otherwise provided for in your Award Agreement. Any payout with respect to Performance Units will occur on _______, 20XX.
Termination of Employment. You will not be entitled to receive any Performance Units if, except in the circumstances described below, you cease to be an Employee before the end of the three-year performance period.
Death, Disability or Retirement. Regardless of the above employment requirement, the Company’s Compensation Committee may, in its discretion, determine that you are entitled to a partial payout of an award if, before the expiration of the three-year performance period, (i) you Retire, (ii) you become Disabled, or (iii) you die, then you (or, if applicable, your estate) may receive a partial payout of this Award based on any fiscal years that have been completed at the time you die, Retire, or become Disabled. If the payout will be made, it will be based on the portion of the Award that you were eligible to receive based on targets established for, and limited to, such completed fiscal year or years, and the Company’s actual performance against those targets. The Compensation Committee’s determination of your entitlement to this partial payout will be made after the conclusion of the performance period. Subject to the Corporate Transactions section below, any payout of this portion of the Award will occur on _______, 20XX, along with the payout of other awards from the Plan’s tranche of grants for that time period; provided however, that if you are terminated due to Disability or Retire within the two-year period following a Corporate Transaction, the Performance Units shall be settled immediately upon such termination to the extent required to comply with Section 409A of the Code.
Corporate Transactions. Any Performance Units for unexpired terms shall be converted to a time-based award at the time of such Corporate Transaction based on the best financial information available to the Company of the Company’s performance as of the close of business on the day immediately preceding the Corporate Transaction; provided, however, that in determining whether and to what extent performance criteria of such Performance Units have been satisfied, where such performance criteria are based on results that accumulate over the term of such Awards or over one year of such term (e.g., earnings per share), the performance requirement of such performance criteria shall be prorated in accordance with the portion of the term or year that occurred
prior to the Corporate Transaction. In the event of the consummation of any Corporate Transaction and you cease to be an Employee due to (i) a termination by the Company without Cause or (ii) by you due to Good Reason, in each case, within two years following the consummation of such Corporate Transaction, all of your Performance Units will immediately vest upon such termination and all transfer restrictions imposed by the Plan or this Agreement will immediately terminate and such Performance Units will be settled in Company stock (or, if specified in your Award Agreement, cash) within 60 days following such termination of employment; provided, however, if the Corporate Transaction is a not a “change in control event” within the meaning of Section 409A of the Code or the settlement upon such termination of employment would not be permitted under Section 409A of the Code, then the Performance Units shall vest and shall be settled in Company stock (or, if specified in your Award Agreement, cash) on _____, 20XX.
| 5. | Short-Term Cash Incentive (Management Incentive Program) | ||||
Termination of Employment. Except in the circumstances described below, you must be actively employed on the last day of the Fiscal Year to be eligible to receive payment of the short-term cash incentive for such Fiscal Year under the Management Incentive Program, or “MIP”.
Disability or Retirement. If you Retire, with the consent of the Company, or became Disabled during the Fiscal Year, you will be entitled to receive payment based on your eligible earnings (as determined by the Committee) during the year.
Death. If you die during or after the Fiscal Year before receiving a MIP payment that you would otherwise receive, payment based on your eligible earnings will be made to your estate.
Approved Leave of Absence. Being on an approved leave of absence (including workers compensation leave, military leave, or leave approved pursuant to the Family and Medical Leave Act), does not affect your eligibility to receive a MIP payment based on your eligible earnings during the fiscal year.
| 6. | Forfeiture or Return of Awards | ||||
If the Company is required to prepare a material accounting restatement, you may be required to forfeit any Award you earned within three years of when the financial statements that were later restated were filed, if the Board or Committee, in its sole discretion, determines that you engaged in misconduct, the amount of the Award was based on achieving performance goals, and it is later determined that those goals were not achieved. In addition, if, within one year after you receive payment of an Award or exercise an Option, the Board determines in its discretion that you have materially
harmed the Company, then you will be required to pay the Company any gain you realized. Additionally, if the Company is required to prepare an accounting restatement due to material noncompliance, the Company will be entitled to, and may be required to, seek recovery of an Award paid to any participant where the misstatement caused an error in incentive-based compensation.
| 7. | Notices | ||||
Any notice under this Agreement to the Company should be addressed to La-Z-Boy Incorporated in care of its Secretary at Xxx Xx-X-Xxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, and, if to you, it will be addressed to your address appearing in the Company’s personnel records, or to either party at a different address that the party designates in writing to the other party. Any such notice will be deemed effective when received.
8. Section 409A.
The Company intends that the Awards granted under this Award Agreement comply with Code Section 409A or be exempt from Code Section 409A to the maximum extent possible and each payment hereunder shall be considered a separate payment under Code Section 409A. If any Award granted hereunder constitutes “deferred compensation” under Code Section 409A of the Code and you are a “specified employee” for purposes of Code Section 409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Code Section 409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six months following the date of your “separation from service” (as defined in Code Section 409A without regard to alternative definitions thereunder) or, if earlier, the date of your death, unless such distribution or payment can be made in a manner that complies with Code Section 409A, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
9. Definitions.
Notwithstanding anything in the Plan to the contrary, “Cause” is defined as in the change in control letter agreement between the Company and you in effect on the Grant Date.
“Good Reason” is defined as in the change in control letter agreement between the Company and you in effect on the Grant Date.
Notwithstanding anything in the Plan to the contrary, “Retired” or “Retirement” means the termination of your employment relationship with the Company and all of its Subsidiaries on or after the date on which the sum of your age and Years of Service equals or exceeds 65, with a minimum age of 55.
