La-Z-Boy Incorporated (NYSE: LZB),a leading manufacturer and marketer of residential and contract furnishings, and LADD Furniture, Inc. (Nasdaq: LADF), a leading residential and contract furniture manufacturer, announced today that they have entered into adefinitive merger agreement pursuant to which LADD will merge into La-Z-Boy. Each outstanding share of LADD common stock will be exchanged for 1.18 shares of La-Z-Boy common stock.

Merger Benefits

Creates the United States' largest publicly-traded residential furniture company, with over $2.0 billion in sales and over $1.3 billion in equityvalue
Expected to be accretive (excluding merger costs and synergies) to La-Z-Boy earnings in the fiscal year beginning in May 2000
Generates substantive revenue and cost synergies
Establishes strong competitive positions across all market segments
Further enhances portfolio of well known brands
Leverages La-Z-Boy name, the number one recognized furniture brand
Adds LADD's attractive contract furniture and youth businesses
Combines two strong management teams
Allows LADD shareholders to participate in a larger, more diversified better capitalized dividend-paying market leader
Structured as a tax-free share exchange for LADD shareholders

The transaction represents a price of $24.34 per LADD share based upon La-Z-Boy's closing stock price of $20.63 on September 28, 1999. Based upon this price, the transaction has a total equity value of $197.8 million and a total transaction value of $299.3 million, including assumed net debt of $101.5 million. The merger is structured to be tax-free to LADD shareholders and will be accounted for as a purchase transaction. Conditioned upon LADD shareholder and regulatory approvals, the transaction is expected to be completed by early 2000.

Management's Comments "This transaction elevates us to the world's premier provider of residential and institutional furniture across all major markets," said Pat Norton, La-Z-Boy's Chairman. "In addition to reinforcing our leading market positions in upholstery and casegoods, LADD immediately establishes us as a market leader in contract and youth furniture sales."

Fred Schuermann, LADD's Chairman, President and Chief Executive Officer, noted, "The combination of LADD's broad product portfolio and market segment penetration with La-Z-Boy's strong brand name and national distribution provides the merged companies with a stronger, more competitive position that will generate additional cost savings and fuel long-term growth. In addition, we will continue to ensure the delivery of long-term value to LADD shareholders. LADD's shareholders will receive a more liquid security in a larger, more diversified company, while sharing in the enhanced long-term prospects of the combined companies."

Synergies

The transaction is expected to generate both cost and revenue synergies beginning in the first full year following the transaction. Sources for cost savings are anticipated to include enhanced purchasing efficiencies, elimination of redundant overhead costs, sharing of internal best practices, and logistics, freight and distribution economies of scale. Revenue enhancements are anticipated from leveraging La-Z-Boy's brand name and distribution network, as well as LADD's market-leading reputation in contract sales. To cover the costs of achieving these synergies, La-Z-Boy expects to take a transaction-related charge in the quarter in which the merger is completed. The amount of the charge has not yet been determined.

Ongoing Management

Under the terms of the agreement, which has been unanimously approved by the boards of directors of both companies, Mr. Schuermann and his senior management team will continue in their current positions with LADD, managing it as a subsidiary of La-Z-Boy. La-Z-Boy's current executive officers and directors will remain the same.

"We have the utmost respect for the job that Fred Schuermann and his management team have done since taking control of LADD in 1996," said Jerry Kiser, La-Z-Boy's president and chief operating officer, "and we place a high degree of faith in their ability to help us move quickly to capitalize on anticipated synergies while aggressively pursuing growth opportunities created by this transaction."

Combined Companies

As a result of the transaction, given La-Z-Boy's closing price today of $20.63, La-Z-Boy will have a total market capitalization of $1.5 billion, including net debt of $176 million, with approximately 63 million shares outstanding on a fully diluted basis. La-Z-Boy expects to maintain its dividend policy upon consummation of the merger. In the most recent fiscal quarter, La-Z-Boy paid a quarterly cash dividend of $.08 per share. LADD currently pays no dividend.

Company Backgrounds

La-Z-Boy, with sales of $1,287.6 million for the fiscal year ended April 24, 1999, is the nation's leading manufacturer of residential and business furniture. La-Z-Boy's products are sold through a licensed network of 285 stores and over 300 in-store galleries, as well as through furniture retailers under the brand names La-Z-Boy, Hammary, England/Corsair, Kincaid, Sam Moore, Centurion and Bauhaus. Headquartered in Monroe, Michigan, La-Z-Boy employs approximately 14,500 employees and operates 34 manufacturing facilities in the U.S., Canada and Europe.

LADD, with sales of $571.1 million for the fiscal year ended January 2, 1999, is one of North America's largest residential furniture manufacturers, as well as one of the world's leading suppliers of residential furniture for the hospitality, assisted-living and government markets. The company markets a wide range of bedroom, dining room, occasional and upholstered furniture under the brand names American Drew, Barclay, Clayton Marcus, Hickory Mark, Lea, Pennsylvania House and Pilliod. LADD's contract sales group markets its furniture under the American of Martinsville brand name. Headquartered in Greensboro, North Carolina, LADD employs approximately 6,500 people and operates 22 manufacturing facilities in eight states.

Financial Advisers: La-Z-Boy was advised in this transaction by Merrill Lynch & Co. Mann Armistead & Epperson Ltd. acted as financial advisor to LADD.