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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File Number 1-7845
LEGGETT & PLATT, INCORPORATED
(Exact name of Registrant as specified in its charter)
MISSOURI 44-0324630
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
NO. 1--LEGGETT ROAD 64836
CARTHAGE, MISSOURI (Zip code)
(Address of principal executive
offices)
Registrant's telephone number, including area code: (417) 358-8131
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -----------------------
<S> <C>
Common Stock, New York Stock Exchange
$.01 par value Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
</TABLE>
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec. 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $1,396,352,074.
There were 41,663,229 shares of the Registrant's common stock outstanding as
of February 24, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held May 10, 1995, are incorporated by reference
into Part III of this report.
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<PAGE>
PART I
ITEM 1. BUSINESS
General Development of Business. The Company was incorporated in 1901 as
the successor to a partnership formed in 1883 at Carthage, Missouri. That
partnership was a pioneer in the manufacture and sale of steel coil bedsprings.
The Company manufacturers, markets and distributes products that range from
components for bedding and furniture to other select furnishings and diversified
products. Products produced and sold for the furnishings industry constitute
the largest portion of the Company's business. These include components used by
companies making furniture and bedding for home, office and commercial
applications. Also in the furnishings industry, the Company produces and sells
some finished products. In addition, a group of diversified non-furnishings
products is produced and sold. The term "Company," unless the context requires
otherwise, refers to Leggett & Platt, Incorporated and its majority owned
subsidiaries.
The Company acquired ten companies in 1994 in exchange for approximately
$79 million in cash (net of cash acquired) and 601,000 shares of common stock.
The acquired companies expanded the Company's annual sales base by approximately
$200 million. For further information concerning acquisitions see Note B of the
Notes to Consolidated Financial Statements.
Products, Market and Customers. The Company has several thousand
customers, most of which are manufacturers of finished furnishings. The Company
is not dependent upon any single customer or any few customers.
Historically, the furnishings industry has been highly fragmented and
included many relatively small companies, widely dispersed geographically.
Although a trend toward consolidation in the furnishings industry has continued,
the industry as a whole remains fragmented to a substantial degree.
The Company's furniture and bedding components customers manufacture
bedding (mattresses and boxsprings), upholstered and non-upholstered furniture
and other finished products for sale to retailers, institutions, wholesalers and
others. The Company's component products are sold and distributed primarily
through the Company's sales personnel.
The Company also manufactures and sells finished products for the
furnishings industry. These finished products include carpet underlay and non-
skid pads, metal shelving, point-of-purchase display racks, sleep-related
finished furniture, and other furnishings for residential and commercial
markets. Some of the finished furniture is sold to bedding and furniture
manufacturers which resell the furniture under their own labels to wholesalers
or retailers. Certain finished furniture such as bed frames, fashion beds,
daybeds and other select items are also sold by the Company directly to
retailers.
The following list is representative of the principal products produced by
the Company in the furnishings industry:
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BEDDING COMPONENTS
Lectro-LOK(R), WEBLOC(R), LOK-Fast(TM),
Flex-Deck(TM), and Semiflex(TM) boxspring
components
Edge and corner stabilizer spring supports
Foam and fiber cushioning materials
Gribetz computerized single needle (Class V)
and multi-needle chain stitch (Class I-IV) quilting
machinery, material handling systems, panel
cutters, tape edge and border serging machines
Hanes construction fabrics
Mira-Coil(R), Super-Lastic(R), Lura-Flex(TM),
Hinge Flex(TM), and Ever-Flex(TM) innerspring
assemblies for mattresses
Mounted and crated boxsprings and
foundation units
Nova-Bond(R) and other insulator pads for
mattresses and boxsprings
Perm-A-Lator(R), Plasteel(R), Posturizer(TM), Flexnet(TM)
and other mattress insulators
Spring and basic wire
Synthetic, wool, cotton, and silk cushioning
materials
WBSCO material handling systems and
equipment for bedding manufacturers
Wood frames and dimension lumber for
boxspring frames
FINISHED PRODUCTS
Bed frames
Daybeds made of brass, painted metal and wood
DURAPLUSH(TM), Permaloom(R), other carpet
underlay and non-skid pads
Electric beds
Genuine Brass, Lustre Brass(R) and other
metal fashion beds and headboards
Metal and wire shelving and other commercial
fixtures
Pedestal bed bases
Point-of-purchase displays and racks
Rollaway beds
Steel bunk beds
Trundle beds
Wood headboards
FURNITURE COMPONENTS
Chair controls, casters and other components
for office furniture
ClassicTouch(TM) and Modular Wallhugger(R)
mechanisms for motion upholstered groups
Coil-Flex(TM) and ModuCoil(R) spring assemblies
for upholstered furniture
Components for office panel systems
Die cast aluminum, fabricated steel, and injection
molded plastic bases for office furniture
and dinettes
Flex-Cord(R) paper covered wire
Hanes construction fabrics
MPI/No-Sag(R) and other foam cushioning
Mechanisms for adjustable height work tables
Metal bed rails for bedroom suites
Molded plastic recliner handles and other
plastic furniture components
No-Sag(R) rocker springs, seating systems and
clips
Perm-A-Lator(R) wire seating insulators
Perma-eze(R) seat and back springs
PETCO weltcord and furniture edgings
Ring-Flex(R) polyethylene foam edgings
SOFA PLUS(TM), MAX(R), and Classic(TM) Series
sofa sleeper mechanisms
Spring wire
Super Sagless Select(TM) motion mechanisms
Swivel, rocker and glider components for
motion furniture
Synthetic fiber, densified fiber batting, seat pads
and other cushioning materials
System Seating(TM), Seat Pleaser(R) and other
furniture coils and accessories
Tackit(TM) tackstrips
VWR supplies for upholstery
Wallhugger(R) and Concept(TM) mechanisms for
reclining chairs
Webline(R) seating systems
Welded steel tubing
Outside the furnishings industry, the Company produces and sells for home,
industrial and commercial uses a diversified line of components and other
products made principally from steel, steel wire, aluminum, plastics, textile
fibers and woven and nonwoven fabrics. The Company's diversified products
require
2
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manufacturing technologies similar to those used in making furnishings related
products and certain raw materials which the Company produces for its own use.
The following list is representative of the Company's principal diversified
products:
DIVERSIFIED PRODUCTS
Aluminum die cast custom products and
aluminum ingot
Bale tie machinery and parts
Cyclo-Index(R) motion controls for
manufacturing equipment
Flex-O-Lators(R), No-Sag(R) and Pullmaflex
automotive seat suspension systems
Formed and welded wire and steel tubing
components
Gribetz single needle quilters, multi-needle
chain stitch quilters, and panel cutters
Hanes industrial and apparel fabrics
Industrial wire
Injection molded plastic products
Mechanical springs
Non-skid pads
Sound insulation materials
Specialty foam products
Textile fiber wiping cloths and other products
The table below sets out further information concerning sales of each class
of the Company's products:
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SUMMARY OF SALES
<TABLE>
<CAPTION>
(Dollar amounts in millions) 1994 1993 1992
<S> <C> <C> <C>
AMOUNT
Furnishings Products
Bedding Components $ 534.5 $ 471.1 $ 409.8
Furniture Components 513.4 412.0 345.5
Finished Products 350.3 312.7 285.7
-------- -------- --------
Total Furnishings Products 1,398.2 1,195.8 1,041.0
Diversified Products 459.9 330.9 274.0
-------- -------- --------
Net Sales $1,858.1 $1,526.7 $1,315.0
======== ======== ========
</TABLE>
Previously reported amounts have been restated to be consistent with current
product groupings.
Reference is also made to Note I of the Notes to Consolidated Financial
Statements for further segment information.
The Company sells quilting machines and similar equipment, seating
suspension products and certain other component products in a number of foreign
countries. The Company's international division is involved primarily in the
sale of machinery and equipment designed to manufacture the Company's
innersprings and certain other spring products and the licensing of patents
owned and presently maintained by the Company in foreign countries. Foreign
sales are a minor portion of the Company's business.
Sources of Raw Materials. The Company uses a variety of raw materials in
manufacturing its products. Some of the Company's most important raw materials
include steel rod (from which steel wire is drawn), coil steel, woven and
nonwoven fabrics, aluminum ingot, aluminum scrap, angle iron, sheet steel,
various woods, textile scrap, foam chemicals, foam scrap, and plastic.
3
<PAGE>
Substantially all of the Company's requirements for steel wire, an
important material in many of the Company's products, are supplied by Company-
owned wire drawing mills. A substantial portion of the steel rod used by these
wire drawing mills is purchased pursuant to a rod supply agreement with a major
steel rod producer. The Company also produces, at various locations, for its own
consumption and for sale to customers not affiliated with the Company, slit coil
steel, welded steel tubing, textile fibers, dimension lumber and aluminum ingot.
Numerous supply sources for the raw materials used by the Company are
available. The Company did not experience any significant shortages of raw
materials during the past year.
Patents and Trademarks. The Company holds numerous patents concerning
its various product lines. No single patent or group of patents is material to
the Company's business as a whole. The Company's more significant trademarks
include those listed with the Company's principal products.
Research and Development. The Company maintains research, engineering
and testing centers at Carthage, Missouri, and also does research and
development work at several of its other facilities. The Company is unable to
precisely calculate the cost of research and development since the personnel
involved in product and machinery development also spend portions of their time
in other areas. However, the Company believes the cost of research and
development was approximately $6 million in 1994 and $5 million in 1993 and
1992.
Employees. The Company has approximately 16,000 employees of whom
approximately 12,500 are engaged in production. Approximately 37% of the
Company's production employees are represented by labor unions.
The Company did not experience any material work stoppage related to
the negotiation of contracts with labor unions during 1994. Management is not
aware of any circumstance which is likely to result in a material work stoppage
related to the negotiations of any contracts expiring during 1995.
Competition. The markets for the Company's products are highly
competitive in all aspects. There are numerous companies offering products
which compete with those products offered by the Company. The primary
competitive factors in the Company's industry include price, product quality,
customer service and product warranties. The Company believes it is the largest
supplier in the United States of a diverse range of components to the
furnishings industry.
Government Regulation. The Company's various operations are subject
to federal, state, and local laws and regulations related to the protection of
the environment, worker safety, and other matters. Environmental regulations
include those relating to air and water emissions, underground storage tanks,
waste handling, and the like. While the Company cannot forecast policies that
may be adopted by various regulatory agencies, management believes that
compliance with these various laws and regulations will not have a material
adverse effect on the consolidated financial condition or results of operations
of the Company.
From time to time, the Company is involved in proceedings related to
environmental matters. In one instance, the United States Environmental
Protection Agency (EPA) ordered one of the Company's subsidiaries to investigate
potential releases into the environment and, if necessary, to perform corrective
action. The subsidiary successfully appealed the EPA's order. On June 27,
1994, the EPA indicated it planned to issue a new, similar order. The
subsidiary, the EPA and the Florida Department of Environmental Protection
(FDEP) are negotiating an agreement to investigate and, if necessary, take
corrective action to resolve the dispute. Estimated costs to perform an agreed
upon investigation and any related corrective actions are not material and have
been provided for in the financial statements as of December 31, 1994. If
current negotiations with the EPA and the FDEP are unsuccessful, and the EPA
issues a new order, the subsidiary expects it would appeal the new order. If
this appeal were unsuccessful, the costs to perform any required investigation
and, if necessary, corrective action cannot be reasonably estimated. One-half
of any costs, including the costs of voluntary actions, would be reimbursed to
the Company under a contractual obligation of a former joint owner of the
subsidiary. No provision for the costs of performing investigation and
corrective action beyond any agreed upon investigation and remediation mentioned
above has been recorded in the Company's financial statements. If any such
additional investigation and corrective action is required,
4
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management believes the possibility of a material adverse effect on the
Company's consolidated financial condition or results of operations is remote.
ITEM 2. PROPERTIES
The Company has approximately 150 locations in North America,
including 32 states in the United States. The Company's most important physical
properties are its manufacturing plants. These manufacturing plants include
five wire drawing mills, three welded steel tubing mills and approximately 50
major manufacturing facilities. The balance of the Company's locations are
engaged in assembly, warehousing, sales, administration or research and
development. In addition, the Company has several locations in foreign
countries. Its corporate headquarters are located in Carthage, Missouri.
Most of the Company's major manufacturing plants are owned by the
Company. The Company also conducts certain of its operations in leased
premises. Terms of the leases, including purchase options, renewals and
maintenance costs, vary by lease. For additional information regarding lease
obligations, reference is made to Note E of the Notes to Consolidated Financial
Statements.
Properties of the Company include facilities which, in the opinion of
management, are suitable and adequate for the manufacture, assembly and
distribution of its products.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in numerous ordinary, routine workers'
compensation, product liability, vehicle accident, employment termination, and
other claims and legal proceedings, the resolution of which management believes
will not have a material adverse effect on the consolidated financial condition
or results of operations of the Company.
The Company is presently party to a small number of proceedings in
which a governmental authority is a party and which involve provisions enacted
regulating the discharge of materials into the environment. These proceedings
deal primarily with waste disposal site remediation. Management believes that
potential monetary sanctions, if imposed in any or all of these proceedings, or
any capital expenditures or operating expenses attributable to these
proceedings, will not have a material adverse effect on the consolidated
financial condition or results of operations of the Company. The EPA has
alleged that two of the Company's facilities in Grafton, Wisconsin violated
wastewater pretreatment requirements under the Clean Water Act. No action is
pending. The EPA has not requested any specific relief, but has indicated it
intends to bring an action. Management believes the cost to resolve this matter
will not have a material adverse effect on the consolidated financial condition
or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
5
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
Leggett & Platt's common stock is listed on The New York and Pacific Stock
Exchanges with the trading symbol LEG. The Company's initial public offering
was on March 29, 1967, and the shares were first listed on The New York Stock
Exchange on June 25, 1979. The table below highlights quarterly and annual
stock market information for the last two years.
<TABLE>
<CAPTION>
PRICE RANGE
-------------------- VOLUME OF DIVIDEND
HIGH LOW SHARES TRADED DECLARED
----------- ------- ------------- --------
<S> <C> <C> <C> <C>
1994:
Fourth Quarter $37.875 $33.375 4,124,900 $.16
Third Quarter 40.000 33.250 6,716,300 .16
Second Quarter 45.500 35.500 5,715,600 .15
First Quarter 49.500 41.625 4,419,700 .15
For the Year 49.500 33.250 20,976,500 .62
1993:
Fourth Quarter $50.000 $40.500 3,338,100 $.14
Third Quarter 46.750 37.000 4,463,200 .14
Second Quarter 39.125 32.875 3,073,400 .13
First Quarter 39.625 34.125 3,897,300 .13
For the Year 50.000 32.875 14,772,000 .54
</TABLE>
Price and volume data reflect composite transactions and prices as reported
daily by The Wall Street Journal.
At February 24, 1995 the Company had 8,087 shareholders of record.
6
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ITEM 6. SELECTED FINANCIAL DATA
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
(Dollar amounts in millions, except per share data)
SUMMARY OF OPERATIONS
Net sales..................................... $1,858.1 $1,526.7 $1,315.0 $1,221.4 $1,231.3
Earnings from continuing operations........... 115.4 85.9 65.4 40.0 30.2
Earnings per share............................ 2.78 2.09 1.64 1.08 .82
Cash dividends declared per share............. .62 .54 .46 .43 .42
SUMMARY OF FINANCIAL POSITION
Total assets.................................. $1,119.9 $ 901.9 $ 772.0 $ 746.7 $ 768.8
Long-term debt................................ 204.9 165.8 147.9 232.7 269.4
</TABLE>
______________________
A restructuring charge of $20.3 pre-tax and $14.3 after tax, or $.39 per share
is included in 1990.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
The Company's financial position reflects several important principles and
guidelines of management's capital policy. These include management's belief
that corporate liquidity must always be adequate to support the Company's
projected internal growth rate. At the same time, liquidity must assure
management that the Company will be able to withstand any amount of financial
adversity that can reasonably be anticipated. Management also intends to direct
capital to strategic acquisitions and other investments that provide additional
opportunities for expansion and enhanced profitability.
Financial planning to meet these needs reflects management's belief that the
Company should never be forced to expand its capital resources, whether debt or
equity, at a time not of its choosing. Management also believes that financial
flexibility is more important than maximization of earnings through excessive
leverage. Therefore, management continuously provides for available credit in
excess of projected cash needs and has maintained a guideline for long-term debt
as a percentage of total capitalization in a range of 30% to 40%.
Internally generated funds provided $419.1 million in capital during the last
three years. Long-term debt outstanding was 23% of total capitalization at the
end of all three years. Obligations having scheduled maturities are the base
"layer" of the Company's debt capital. At the end of 1994, these obligations
totaled $146.6 million, consisting primarily of privately placed institutional
loans and tax-exempt industrial development bonds. At the end of 1993, debt
with scheduled maturities totaled $122.3 million, which was up from $112.5
million a year earlier.
Near the end of July 1994, the Company issued $25 million in unsecured
privately placed debt under a medium-term note program. These notes were issued
with average lives of approximately eight years and fixed interest rates
averaging 7.6%. Proceeds from the notes were used to repay a portion of the
Company's revolving credit. In 1993, the Company issued $50 million of medium-
term notes near the end of the third quarter. These notes were issued with
average lives of approximately nine years and fixed interest rates averaging
5.8%. Debt of a company acquired in a September 1993 pooling of interests
transaction was repaid with the majority of the proceeds from these notes. In
1992, the Company also issued $26 million of medium term notes near the
beginning of the
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fourth quarter. These notes were issued with average lives of approximately
five years and fixed interest rates averaging 6.2%. Proceeds of the notes
issued in 1992 were used to repay debt outstanding under the Company's revolving
bank credit agreements.
In March 1992, substantially all of the $40 million of 6 1/2% convertible
subordinated debentures, which had been outstanding at the end of 1991, were
converted into 2.1 million shares of the Company's common stock. The resulting
increase in shareholders' equity enhanced the Company's flexibility in capital
management.
In November 1994, Standard & Poor's and Moody's, the nation's leading debt
rating agencies, both increased their ratings of the Company's senior debt.
Standard & Poor's increased its rating to A from A-, and Moody's increased its
rating to A2 from A3.
The Company's second "layer" of debt capital consists of revolving credit
agreements with seven banks. Over the years, management has renegotiated these
bank credit agreements and established a commercial paper program to keep pace
with the Company's projected growth and to maintain highly flexible sources of
debt capital. The credit under these arrangements has been a long-term
obligation. If needed, however, the credit is also available for short-term
borrowings and repayments. In 1994, there was $58.3 million in revolving
debt/commercial paper outstanding at the end of the year, up from $43.5 million
in 1993 and $35.4 million in 1992. These increases reflected a portion of funds
borrowed to finance cash acquisitions. Internally generated funds were used, as
available, to reduce debt outstanding during the last three years. Additional
details of long-term debt outstanding, including scheduled maturities, revolving
credit and commercial paper are discussed in Note D of the Notes to Consolidated
Financial Statements.
The following table shows, in millions, the Company's capitalization at the
end of the three most recent years. It also shows the amount of additional
capital available through the revolving bank credit agreements. The amount of
cash and cash equivalents is also shown.
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Long-term debt outstanding:
Scheduled maturities.............. $146.6 $122.3 $112.5
Revolving credit/commercial paper. 58.3 43.5 35.4
------ ------ ------
Total long-term debt........... 204.9 165.8 147.9
Shareholders' equity................ 625.2 515.6 441.6
Unused committed credit............. 156.7 116.5 139.6
Cash and cash equivalents........... 2.7 .4 5.2
</TABLE>
Net capital investments to modernize and expand manufacturing capacity
internally totaled $164.8 million in the last three years. During this period,
the Company also employed $162.6 million in cash (net of cash acquired) and
issued 2.3 million shares of common stock in acquisitions. During 1994, the
Company acquired ten businesses for $78.8 million in cash (net of cash acquired)
and .6 million shares of common stock. Additional details of acquisitions are
discussed in Note B of the Notes to Consolidated Financial Statements. Cash
dividends on the Company's common stock totaled $67.6 million in the last three
years.
The Company has substantial capital resources to support projected internal
cash needs and additional acquisitions consistent with management's goals and
objectives. In addition, the Company has the availability of short-term
uncommitted credit from several banks. However, there was no short-term debt
outstanding at the end of any of the last three years.
Working capital increased $78.2 million in the last three years. To gain
additional flexibility in capital management and to improve the rate of return
on shareholders' equity, the Company continuously seeks efficient use of working
capital. The following table shows the annual turnover on average year-end
working capital, trade receivables and inventories. The ratios may be affected
by the timing of the Company's acquisitions.
8
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<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Working capital turnover (excluding cash
and cash equivalents)................... 6.4x 6.1x 5.8x
Trade receivables turnover................ 8.2 8.3 8.3
Inventory turnover........................ 6.2 6.0 5.7
</TABLE>
Future commitments under lease obligations are described in Note E and
contingent obligations in connection with environmental and other matters are
discussed in Note J of the Notes to Consolidated Financial Statements.
RESULTS OF OPERATIONS
The results of operations during the last three years reflect various
elements of the Company's long-term growth strategy, along with general trends
in the economy and the markets the Company serves, both in the furnishings
industry and in a variety of diversified non-furnishings markets. The Company's
growth strategy continues to include both internal programs and acquisitions
which broaden product lines and provide for increased market penetration and
operating efficiencies. With a continuing emphasis on the development of new
and improved products and advancements in production technology, the Company is
able to consistently offer high quality products, competitively priced.
Trends in the general economy were favorable during the last three years.
During 1994, economic growth increased as the year progressed. Despite higher
interest rates, spending on furnishings and other durable goods increased more
than most economists and industry analysts anticipated. Demand also improved in
the diversified non-furnishings markets the Company serves. In 1993, economic
growth increased in the fourth quarter, following more modest growth during most
of the year. Markets generally reacted favorably to lower long-term interest
rates and increased availability of credit. During 1992, a post-election
increase in overall confidence led to increased spending and accelerated growth
in the economy. However, compared with previous first year recoveries from
recessionary lows, economic growth and demand for the Company's furnishings and
diversified products was modest during most of 1992.
Many forecasters are currently anticipating further 1995 growth in the
economy and the markets the Company serves. While the rate of growth may be
slower this year, economic conditions should remain healthy, with hopefully
moderate overall inflation. The long-term outlook for overall business
conditions should also remain favorable if the Federal Reserve Board proves to
be successful in its attempts to restrain inflationary expectations and slow
economic growth.
The Company's consolidated net sales increased 22% in 1994 and 16% in 1993,
when compared with prior years. Excluding acquisitions, sales would have
increased 10% in both of the last two years. These increases primarily
reflected higher unit volumes, plus some price increases implemented in response
to increases in prices for raw materials.
While the percentage and timing of increases in the Company's selling
prices varied considerably, the largest 1994 increases were concentrated in
aluminum products. In 1993, price increases were concentrated in the Company's
steel and wire products. However, some of the 1993 and additional 1994 cost
increases the Company experienced in operations producing steel products were
not passed along until the end of 1994.
In 1992, consolidated net sales increased 8% over 1991, due almost entirely
to higher unit volumes. The Company was able to refrain from raising prices in
1992 as previously weaker economic conditions had reduced inflation for most raw
materials.
The following table shows various measures of earnings as a percentage of
sales for the last three years. It also shows the effective income tax rate and
the coverage of interest expense by pre-tax earnings plus interest.
9
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<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Gross profit margin......... 23.1% 22.9% 22.8%
Pre-tax profit margin....... 10.2 9.2 8.1
Net profit margin........... 6.2 5.6 5.0
Effective income tax rate... 39.1 39.1 38.5
Interest coverage ratio..... 20.3x 14.8x 8.9x
</TABLE>
The Company's profit margins, like sales, continued to improve in the last
three years. The 1994 gross profit margin increased slightly from 1993,
primarily reflecting improved market conditions in the aluminum and foam
industries and gains in overall manufacturing efficiencies on higher volume.
These favorable factors more than offset cost/price pressures the Company
continued to experience in operations producing steel products for the
furnishings industry and diversified non-furnishings markets. The 1993 gross
profit margin was substantially unchanged from 1992. Operating efficiencies
resulting from increased sales and production, cost cutting, and constant
attention to cost containment were largely offset by inflation in prices for
some key raw materials. Reflecting this inflation, LIFO expense reduced the
gross profit margin by 0.2% in both of the last two years. This was in sharp
contrast to 1992, when LIFO income slightly increased the gross profit margin.
The replacement cost of the LIFO inventory is discussed in Note A of the Notes
to Consolidated Financial Statements.
The pre-tax profit margin in 1994 increased to 10.2%. This improvement
reflected a 0.4% reduction in total selling, distribution and administrative
expenses, as a percentage of sales. In addition, interest expense and other
deductions, net of other income, decreased slightly as a percentage of sales.
The 1993 pre-tax profit margin increased to 9.2% of sales. This improvement
primarily reflected a 0.7% reduction in selling, distribution and administrative
expenses, as a percentage of sales. Increased efficiencies and reduced bad debt
expense contributed to the improvement in operating expense ratios. These
factors and a slight increase in other income more than offset one time charges
related to acquisitions and the Company's implementation of new accounting
statements issued by the Financial Accounting Standards Board. Interest expense,
as a percentage of sales, was reduced 0.4% and further improved the pre-tax
profit margin. Reduced debt outstanding (before 1993 acquisitions) and lower
interest rates were reflected in this improvement.
The effective income tax rate was 39.1% in both of the last two years and
38.5% in 1992. In the third quarter of 1993, corporate federal income tax rates
were increased from 34% to 35%, retroactive to January 1, 1993. Additional
details of income taxes for the last three years are discussed in Note H of the
Notes to Consolidated Financial Statements.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and supplementary data included in
this Report begin on page 15.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
10
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Reference is made to the section entitled "Election of Directors" in the
Company's definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 10, 1995, said section being incorporated by
reference, for a description of the directors of the Company.
The following table sets forth the names, ages and positions of all
executive officers of the Company. Executive officers are elected annually by
the Board of Directors at the first meeting of directors following the Annual
Meeting of Shareholders.
The description of the executive officers of the Company is as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Harry M. Cornell, Jr. 66 Chairman of the Board and Chief Executive Officer
Felix E. Wright 59 President, Chief Operating Officer and Director
Roger D. Gladden 49 Senior Vice President and President--Commercial Products Group
Michael A. Glauber 52 Senior Vice President, Finance and Administration (Principal Financial
Officer and Principal Accounting Officer)
David S. Haffner 42 Senior Vice President and President--Furniture and Automotive
Components Group
Robert A. Jefferies, Jr. 53 Senior Vice President, Mergers, Acquisitions and Strategic Planning
and Director
Duane W. Potter 63 Senior Vice President and President--Bedding Components Group
</TABLE>
Subject to the employment agreements and severance benefit agreements
listed as Exhibits to this Report, officers serve at the pleasure of the Board
of Directors.
Harry M. Cornell, Jr. has served as the Company's Chief Executive
Officer, Chairman of the Board and Chairman of the Board's Executive Committee
for more than the last five years.
Felix E. Wright was elected President in 1985 and has served as Chief
Operating Officer since 1979.
Roger D. Gladden was elected Senior Vice President in 1992. Mr. Gladden
has been President--Commercial Products Group since 1984 and previously served
as Vice President--Administration.
Michael A. Glauber was elected Senior Vice President, Finance and
Administration in 1990. Mr. Glauber was elected Vice President--Finance in 1979
and Vice President--Finance and Treasurer in 1980.
David S. Haffner was elected Senior Vice President and President--
Furniture and Automotive Components Group in 1992. Mr. Haffner was appointed
President--Furniture Components Group in 1985 and was elected Vice President of
the Company in 1985.
Robert A. Jefferies, Jr. was elected Senior Vice President, Mergers,
Acquisitions and Strategic Planning in 1990. Mr. Jefferies formerly served as
Vice President and the Senior Vice President, General Counsel and Secretary of
the Company from 1977 through 1992.
Duane W. Potter was elected Vice President in 1978 and Senior Vice
President in 1983. Mr. Potter has been President--Bedding Components Group
since 1985.
11
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The section entitled "Executive Compensation and Related Matters" in the
Company's definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 10, 1995, is incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The section entitled "Ownership of Common Stock" in the Company's
definitive Proxy Statement for the Company's Annual Meeting of Shareholders to
be held on May 10, 1995, is incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The subsection entitled "Related Transactions" of the section entitled
"Executive Compensation and Related Matters" in the Company's definitive Proxy
Statement for the Company's Annual Meeting of Shareholders to be held on May 10,
1995 is incorporated by reference.
12
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
1. Financial Statements
--------------------
The Financial Statements listed below are included
in this Report:
* Consolidated Statements of Earnings for each of the years in
the three year period ended December 31, 1994
* Consolidated Balance Sheets at December 31, 1994 and 1993
* Consolidated Statements of Cash Flows for each of the years
in the three year period ended December 31, 1994
* Consolidated Statements of Changes in Shareholders' Equity
for each of the years in the three year period ended December
31, 1994
* Notes to Consolidated Financial Statements
* Report of Independent Accountants
2. Financial Statement Schedules
-----------------------------
Report of Independent Accountants on Financial Statement
Schedule
Schedule for each of the years in the three year period ended
December 31, 1994
VIII -- Valuation and Qualifying Accounts and Reserves
All other information schedules have been omitted as the required
information is inapplicable, not required, or the information is included in the
financial statements or notes thereto.
3. Exhibits - See Exhibit Index.
--------
4. Reports on Form 8-K filed during the last quarter
-------------------------------------------------
of 1994: None.
--------
13
<PAGE>
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS
Page
----
Quarterly Summary of Earnings............................................ 15
Consolidated Statements of Earnings...................................... 16
Consolidated Balance Sheets.............................................. 17
Consolidated Statements of Cash Flows.................................... 18
Consolidated Statements of Changes in Shareholders' Equity............... 19
Notes to Consolidated Financial Statements............................... 20
Report of Independent Accountants........................................ 30
14
<PAGE>
QUARTERLY SUMMARY OF EARNINGS
Leggett & Platt, Incorporated and Subsidiaries
<TABLE>
<CAPTION>
(Unaudited)
(Dollar amounts in millions, except per share data)
Quarter
Year ended December 31, 1994 First Second Third Fourth Total
<S> <C> <C> <C> <C> <C>
Net sales $434.6 $448.8 $482.6 $492.1 $1,858.1
Gross profit 98.6 104.3 110.6 115.5 429.0
Earnings before income taxes 42.8 46.6 49.9 50.2 189.5
Net earnings 26.0 28.2 30.2 31.0 115.4
====== ====== ====== ====== ========
Earnings per share $ .63 $ .68 $ .73 $ .74 $ 2 .78
====== ====== ====== ====== ========
Year Ended December 31, 1993
Net sales $363.0 $371.7 $395.4 $396.6 $1,526.7
Gross profit 82.5 85.4 91.1 90.0 349.0
Earnings before income taxes 32.1 34.4 37.1 37.4 141.0
Net earnings 19.6 21.0 22.3 23.0 85.9
====== ====== ====== ====== ========
Earnings per share $ .48 $ .51 $ .54 $ .56 $ 2.09
====== ====== ====== ====== ========
</TABLE>
15
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
<TABLE>
<CAPTION>
Year ended December 31 1994 1993 1992
<S> <C> <C> <C>
Net sales $1,858.1 $1,526.7 $1,315.0
Cost of goods sold 1,429.1 1,177.7 1,015.1
-------- -------- --------
Gross profit 429.0 349.0 299.9
Selling, distribution and administrative expenses 227.0 192.4 175.2
Interest expense 9.8 10.2 13.5
Other (income) and deductions, net 2.7 5.4 4.8
-------- -------- --------
Earnings before income taxes 189.5 141.0 106.4
Income taxes 74.1 55.1 41.0
-------- -------- --------
Net earnings $ 115.4 $ 85.9 $ 65.4
======== ======== ========
Earnings per share $ 2.78 $ 2.09 $ 1.64
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
CONSOLIDATED BALANCE SHEETS
Leggett & Platt, Incorporated and Subsidiaries
<TABLE>
<CAPTION>
(Dollar amounts in millions)
December 31 1994 1993
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2.7 $ .4
Trade receivables, less allowance of $7.5 in 1994 and $7.2 in 1993 245.3 194.6
Other receivables 9.0 10.1
Inventories
Finished goods 134.5 113.3
Work in process 32.1 23.8
Raw materials and supplies 103.1 82.2
LIFO reserve (14.2) (10.2)
-------- --------
Total inventories 255.5 209.1
Other current assets 32.2 21.4
-------- --------
Total current assets 544.7 435.6
PROPERTY, PLANT AND EQUIPMENT - AT COST
Machinery and equipment 430.1 346.5
Buildings and other 246.9 204.9
Land 22.5 19.8
-------- --------
699.5 571.2
Less accumulated depreciation 303.5 258.1
-------- --------
Net property, plant and equipment 396.0 313.1
OTHER ASSETS
Excess cost of purchased companies over net assets acquired,
less accumulated amortization of $14.4 in 1994 and $11.4 in 1993 115.1 93.0
Other intangibles, less accumulated amortization of $12.5 in 1994 and
$11.3 in 1993 27.4 25.7
Sundry 36.7 34.5
-------- --------
Total other assets 179.2 153.2
-------- --------
TOTAL ASSETS $1,119.9 $ 901.9
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 3.9 $ 1.4
Accounts payable 89.9 74.1
Income taxes 9.5 1.6
Accrued expenses 96.5 65.3
Other current liabilities 33.1 23.8
-------- --------
Total current liabilities 232.9 166.2
LONG-TERM DEBT 204.9 165.8
OTHER LIABILITIES 14.7 11.1
DEFERRED INCOME TAXES 42.2 43.2
SHAREHOLDERS' EQUITY
Capital stock
Preferred stock-authorized, 100,000,000 shares; none issued
Common stock-authorized, 300,000,000 shares of $.01 par value; issued
41,608,174 and 40,325,961 shares in 1994 and 1993, respectively .4 .4
Additional contributed capital 134.7 117.3
Retained earnings 496.5 401.0
Cumulative translation adjustment (6.1) (2.8)
Less treasury stock-at cost (11,065 and 7,578 shares in 1994 and 1993,
respectively) ( .3) ( .3)
-------- --------
Total shareholders' equity 625.2 515.6
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,119.9 $ 901.9
======== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Leggett & Platt, Incorporated and Subsidiaries
<TABLE>
<CAPTION>
(Dollar amounts in millions)
<S> <C> <C> <C>
Year ended December 31 1994 1993 1992
OPERATING ACTIVITIES
Net earnings $ 115.4 $ 85.9 $ 65.4
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation 48.8 39.1 36.5
Amortization 8.1 6.2 6.1
Deferred income tax (benefit) expense (6.6) 8.6 (2.4)
Other 2.0 ( .9) 1.6
Other changes, net of effects from
purchases of companies
Increase in accounts receivable, net (29.1) (9.2) (24.1)
Increase in inventories (22.2) (4.4) (8.3)
(Increase) decrease in other current assets (4.9) (2.9) .8
Increase in current liabilities 61.5 23.3 24.8
------- ------- ------
Net Cash Provided by Operating Activities 173.0 145.7 100.4
INVESTING ACTIVITIES
Additions to property, plant and equipment (88.5) (54.2) (35.8)
Proceeds from sales of property, plant and equipment 1.0 2.8 9.9
Purchases of companies, net of cash acquired (78.8) (78.0) (5.8)
Other ( .3) -- (3.5)
------- ------- ------
Net Cash Used for Investing Activities (166.6) (129.4) (35.2)
FINANCING ACTIVITIES
Additions to debt 49.1 58.1 35.9
Payments on debt (29.6) (57.8) (85.4)
Dividends paid (25.4) (21.1) (21.1)
Other 1.8 ( .3) (2.0)
------- ------- ------
Net Cash Used for Financing Activities (4.1) (21.1) (72.6)
------- ------- ------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2.3 (4.8) (7.4)
CASH AND CASH EQUIVALENTS--BEGINNING OF YEAR .4 5.2 12.6
------- ------- ------
CASH AND CASH EQUIVALENTS--END OF YEAR $ 2.7 $ .4 $ 5.2
======= ======= ======
SUPPLEMENTAL INFORMATION
Interest paid $ 9.2 $ 16.7 $ 12.7
Income taxes paid 68.1 45.3 43.6
Liabilities assumed of acquired companies 40.4 21.8 --
Common stock issued for acquired companies 13.8 2.0 4.3
Common stock issued for conversion of debentures -- -- 39.9
======= ======= ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Leggett & Platt, Incorporated and Subsidiaries
<TABLE>
<CAPTION>
(Dollar amounts in millions, except per share data)
Additional Cumulative Treasury Stock
Common Contributed Retained Translation --------------------
Stock Capital Earnings Adjustment Cost Shares
<S> <C> <C> <C> <C> <C> <C>
BALANCES--JANUARY 1, 1992 $ 19.4 $ 40.9 $ 287.5 $ .8 $ (2.3) 90,697
Common stock issued (1,629,297 shares) 1.6 47.3
Net treasury stock issued and purchased .1 (2.0) 38,824
Tax benefit related to stock options 1.2
Additional shares issued in two-for-one stock
split effected in the form of a stock dividend
June 15, 1992 (18,932,239 shares) 18.9 (18.9) 6,675
Translation adjustment (1.6)
Retained earnings of pooled
company at date of acquisition .6
Net earnings for the year 65.4
Cash dividends declared ($.46 per share) (17.3)
------ ------- ------- ------ ------ --------
BALANCES--DECEMBER 31, 1992 39.9 70.6 336.2 ( .8) (4.3) 136,196
Common stock issued (376,314 shares) .2 6.2
Net treasury stock issued and purchased ( .3) 4.0 (128,618)
Tax benefit related to stock options 1.1
Change in par value of common stock (39.7) 39.7
Translation adjustment (2.0)
Net earnings for the year 85.9
Cash dividends declared ($.54 per share) (21.1)
------ ------- ------- ------ ------ --------
BALANCES--DECEMBER 31, 1993 .4 117.3 401.0 (2.8) ( .3) 7,578
Common stock issued (1,282,213 shares) 17.0
Net treasury stock issued and purchased ( .1) 3,487
Tax benefit related to stock options .5
Translation adjustment (3.3)
Retained earnings of pooled
companies at date of acquisition 5.5
Net earnings for the year 115.4
Cash dividends declared ($.62 per share) (25.4)
------ ------- ------- ------ ------ --------
BALANCES--DECEMBER 31, 1994 $ .4 $ 134.7 $ 496.5 $ (6.1) $ (.3) 11,065
====== ======= ======= ====== ====== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
December 31, 1994, 1993 and 1992
A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Leggett & Platt, Incorporated and its majority-owned
subsidiaries (the Company). All significant intercompany transactions and
accounts have been eliminated in consolidation.
ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
CASH EQUIVALENTS: Cash equivalents include cash in excess of daily
requirements which is invested in various financial instruments with original
maturities of three months or less.
INVENTORIES: All inventories are stated at the lower of cost or market.
Cost includes materials, labor and production overhead. Cost is determined by
the last-in, first-out (LIFO) method for approximately 70% of the inventories at
December 31, 1994 and 1993. The first-in, first-out (FIFO) method is used for
the remainder. The FIFO cost of inventories at December 31, 1994 and 1993
approximated replacement cost.
DEPRECIATION, AMORTIZATION AND ASSET REALIZATION: Property, plant and
equipment are depreciated by the straight-line method. The rates of
depreciation range from 8.3% to 25% for machinery and equipment, 2.5% to 6.7%
for buildings and 12.5% to 33% for other items. Accelerated methods are used
for tax purposes. The excess cost of purchased companies over net assets
acquired is amortized by the straight-line method over forty years. Other
intangibles are amortized by the straight-line method over their estimated
lives. Assets subject to periodic depreciation or amortization are evaluated
for probable realization, and appropriate adjustment of their carrying value is
made when realization is not assured. The excess cost of purchased companies
over net assets acquired is evaluated using estimated undiscounted cash flows
over the remaining amortization period.
COMPUTATIONS OF EARNINGS PER SHARE: Earnings per share is based on the
weighted average number of common and common equivalent shares outstanding.
Common stock equivalents result from the assumed issuance of shares under stock
option plans.
CONCENTRATION OF CREDIT RISKS, EXPOSURES AND FINANCIAL INSTRUMENTS: The
Company specializes in manufacturing, marketing, and distributing components and
other related products for the furnishings industry and diversified markets.
The Company's operations are principally in the United States, although the
Company also has subsidiaries in Canada and Europe.
The Company performs ongoing credit evaluations of its customers' financial
conditions and, generally, requires no collateral from its customers, some of
which are highly leveraged. The Company maintains allowances for potential
credit losses and such losses have generally been within management's
expectations.
From time to time, the Company will enter into forward exchange contracts
to hedge equipment purchase commitments in foreign currencies. The amounts
outstanding under the forward contracts at any point in time are not significant
to the Company. The Company has minimal continuing exposures to other foreign
currency transactions and interest rate fluctuations, none of which have been
hedged by the use of derivative instruments.
The carrying value of cash and short-term financial instruments
approximates fair value due to the short maturity of those instruments. The
carrying value of long-term debt approximates fair value due to the use of
variable interest rates and recently issued fixed rate debt.
INCOME TAXES: The Company provides for taxes on undistributed earnings of
subsidiaries where appropriate. The tax effect of most such distributions would
be significantly offset by available foreign tax credits.
20
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
B -- ACQUISITIONS
During 1994, the Company acquired certain assets of eight companies in
exchange for $78.8 in cash and 22,378 shares of common stock, net of cash
acquired, in transactions accounted for as purchases. These companies primarily
specialize in manufacturing and distributing components and certain other
products to the furnishings industry. The Company also issued 578,436 shares of
common stock to acquire two companies during the year in transactions accounted
for as poolings of interests. The Company elected not to restate its financial
statements as the effect of the poolings was not material. The pooled companies
specialize in manufacturing and distributing point-of-purchase display racks and
other formed wire products to the furnishings and diversified industries. The
following unaudited pro forma information shows the results of operations for
the twelve months ended December 31, 1994 and 1993 as though the 1994
acquisitions discussed above had occurred on January 1 of each year presented.
The pro forma amounts reflect, where appropriate, purchase accounting
adjustments, interest on incremental borrowings and the tax effects thereof.
This pro forma information is not necessarily indicative of either results of
operations that would have occurred had the acquisitions been made on January 1
of each year or of future results of the combined companies.
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Net sales $1,971.4 $1,706.3
Net earnings 118.3 89.0
Earnings per share 2.81 2.13
</TABLE>
In September 1993, the Company issued 1,579,354 shares of common stock to
acquire Hanes Holding Company (Hanes) in a transaction accounted for as a
pooling of interests. Hanes' business consists of converting and distributing
woven and nonwoven construction fabrics, primarily in the furnishings industry.
In addition, Hanes is a commission dye/finisher of non-fashion fabrics for the
furnishings and apparel industries. In another pooling of interests
transaction, the Company issued 68,788 shares of common stock to acquire a
company whose business is manufacturing furniture components for the furnishings
industry. Prior year financial statements were restated for these poolings of
interests.
In September 1993, the Company acquired VWR Textiles & Supplies (through
Hanes) which converts and distributes construction fabrics and manufactures and
distributes other soft goods components to the furnishings industry. The
purchase price of this acquisition was approximately $26.0. Also in 1993, the
Company acquired full ownership of several wire drawing mills which previously
had been jointly owned. This transaction involved $33.0 in cash and the
assumption of approximately $3.6 of long-term debt. In addition, the Company
acquired several smaller companies during 1993 which primarily manufacture and
distribute products to the furnishings industry.
During 1992, the Company acquired the assets of one small company that
primarily manufactures bedding and furniture components for the furnishings
industry. The purchase price of this acquisition was approximately $5.8.
Also during 1992, the Company acquired a business accounted for as a
pooling of interests. The business primarily manufactures bedding and furniture
components for the furnishings industry. In exchange for all of the outstanding
capital stock of the business, the Company issued 100,903 shares of its common
stock. The Company elected not to restate prior year's financial statements as
the effect of the pooling was not material.
The results of operations of these acquired companies, except the 1993
poolings, have been included in the consolidated financial statements since the
dates of acquisition.
21
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
C -- ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities at December 31 consist of
the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Accrued expenses
Wages and commissions payable $ 27.7 $ 19.1
Worker's compensation, medical, auto
and product liability insurance 33.0 22.0
Other 35.8 24.2
------ ------
$ 96.5 $ 65.3
====== ======
Other current liabilities
Outstanding checks in excess of book balances $ 26.1 $ 13.1
Other 7.0 10.7
------ ------
$ 33.1 $ 23.8
====== ======
</TABLE>
D -- LONG-TERM DEBT
Long-term debt, weighted average interest rates and due dates at December
31 are as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Medium-term notes, fixed interest rates of 6.4% and 6.0%
for 1994 and 1993, respectively, due dates through 2008 $103.5 $ 78.5
Revolving credit agreements, variable interest rates of
6.5% and 3.4% for 1994 and 1993, respectively 43.3 43.5
Commercial paper, variable interest rates of
6.1% for 1994, due dates in 1995 15.0 --
Industrial development bonds, variable interest rates of
6.1% and 3.2% for 1994 and 1993, respectively,
due dates through 2030 32.3 32.3
Industrial development bonds, fixed interest rates of
6.9% and 7.6% for 1994 and 1993, respectively,
due dates through 2024 5.5 7.6
Other, partially secured 9.2 5.3
------ ------
208.8 167.2
Less current maturities 3.9 1.4
------ ------
$204.9 $165.8
====== ======
</TABLE>
22
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
D -- LONG-TERM DEBT (CONTINUED)
The revolving credit agreements provide for a maximum line of credit of
$200.0. For any revolving credit agreement, the Company may elect to pay
interest based on 1) the bank's base lending rate, 2) LIBOR, 3) an adjusted
certificate of deposit rate, or 4) the money market rate, as specified in the
revolving agreements. Any outstanding balances at the end of the third year of
the revolving credit agreements may be converted into term loans payable in ten
equal semi-annual installments. Commitment fees during the revolving agreement
period are 3/16 of 1% per annum of the unused credit line, payable on a
quarterly basis.
Commercial paper is classified as long-term debt since the Company intends
to refinance it on a long-term basis either through continued issuance or unused
credit available under the revolving credit agreements.
The revolving credit agreements and certain other long-term debt contain
restrictive covenants which, among other restrictions, limit the amount of
additional debt, require working capital to be maintained at specified amounts
and restrict payments of dividends. Unrestricted retained earnings available
for dividends at December 31, 1994 were approximately $170.9.
Maturities of long-term debt for each of the five years following 1994 are:
<TABLE>
<CAPTION>
Year ended December 31
<S> <C>
1995 $ 3.9
1996 4.0
1997 32.4
1998 25.5
1999 22.4
</TABLE>
E -- LEASE OBLIGATIONS
The Company conducts certain of its operations in leased premises and also
leases most of its automotive and trucking equipment and some other assets.
Terms of the leases, including purchase options, renewals and maintenance costs,
vary by lease.
Total rental expense entering into the determination of results of
operations was approximately $18.0, $17.4 and $16.8 for the years ended
December 31, 1994, 1993 and 1992, respectively.
Future minimum rental commitments for all long-term noncancelable operating
leases are as follows:
<TABLE>
<CAPTION>
Year ended December 31
<S> <C>
1995 $10.0
1996 7.1
1997 4.6
1998 2.5
1999 1.0
Later years 1.0
-----
$26.2
=====
</TABLE>
The above lease obligations expire at various dates through 2010. Certain
leases contain renewal and/or purchase options. Aggregate rental commitments
above include renewal amounts where it is the intention of the Company to renew
the lease.
23
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
F -- CAPITAL STOCK
At December 31, 1994, the Company had 3,266,540 common shares authorized
for issuance under stock option plans. Generally, options are granted at not
less than quoted market value on the date of grant and become exercisable in
varying installments, beginning 6 to 18 months after the date of grant.
However, options may be granted at less than market value to replace existing
options of an acquired company or in lieu of compensation. Options exercisable
were 538,786 and 310,999 at December 31, 1994 and 1993, respectively.
Other data regarding the Company's stock options is summarized below:
<TABLE>
<CAPTION>
Per
share
Shares price Total
<S> <C> <C> <C>
Outstanding at
January 1, 1993 1,532,420 $ 7-23 $28.6
Granted 170,191 33-43 6.8
Exercised (254,132) 7-23 (3.1)
Forfeited (29,893) 11-42 (.6)
--------- ------ -----
Outstanding at
December 31, 1993 1,418,586 7-43 31.7
Granted 184,431 1-43 3.3
Exercised (160,032) 1-23 (2.5)
Forfeited (52,357) 15-42 (1.4)
--------- ------ -----
Outstanding at
December 31, 1994 1,390,628 $ 1-43 $31.1
========= ====== =====
</TABLE>
The Company has also authorized shares for issuance in connection with
certain employee stock benefit plans discussed in Note G.
In 1993, the Company's shareholders approved an amendment to the Company's
Restated Articles of Incorporation reducing the par value of Common Stock to
$.01 from $1.00. The amendment provided that the stated capital of the Company
would not be affected as of the date of the amendment. Accordingly, stated
capital of the Company exceeds the amount reported as common stock in the
financial statements by approximately $39.0.
In 1989, the Company declared a dividend distribution of one preferred
stock purchase right (a Right) for each share of common stock. The Rights are
attached to and traded with the Company's common stock. The Rights may only
become exercisable under certain circumstances involving actual or potential
acquisitions of the Company's common stock. Depending upon the circumstances, if
the Rights become exercisable, the holder may be entitled to purchase shares of
Series A junior preferred stock of the Company, shares of the Company's common
stock or shares of common stock of the acquiring entity. The Rights remain in
existence until February 15, 1999, unless they are exercised, exchanged or
redeemed at an earlier date.
G -- EMPLOYEE BENEFIT PLANS
The Company sponsors contributory and non-contributory pension and
retirement plans. Substantially all employees, other than union employees
covered by multiemployer plans under collective bargaining agreements, are
eligible to participate in the plans. Retirement benefits under the
contributory plans are based on career average earnings. Retirement benefits
under the non-contributory plans are based on years of service, employees'
average compensation and social security benefits. It is the Company's policy
to fund actuarially determined costs as accrued.
24
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
G -- EMPLOYEE BENEFIT PLANS (CONTINUED)
Information at December 31, 1994, 1993 and 1992 as to the funded status of
Company sponsored defined benefit plans, net pension income from the plans for
the years then ended and weighted average assumptions used in the calculations
are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Funded Status
Actuarial present value
of benefit obligations
Vested benefits $(50.5) $(46.3) $(37.2)
Nonvested benefits (.6) (.6) (.4)
------ ------ ------
Accumulated benefit obligations (51.1) (46.9) (37.6)
Provision for future
compensation increases (3.6) (3.3) (3.7)
------ ------ ------
Projected benefit obligations (54.7) (50.2) (41.3)
Plan assets at fair value 75.2 78.1 65.7
------ ------ ------
Plan assets in excess of projected
benefit obligations 20.5 27.9 24.4
Unrecognized net experience gain ( .4) (9.6) (7.4)
Unrecognized net transition asset (4.1) (4.6) (5.3)
------ ------ ------
Prepaid pension costs included
in other assets $ 16.0 $ 13.7 $ 11.7
====== ====== ======
Components of Pension Income (Expense)
Service cost $ (1.3) $ (.9) $ (.4)
Interest cost (3.5) (3.3) (3.0)
Actual return on plan assets (1.9) 12.8 6.9
Net amortization and deferral 9.0 (6.6) (1.4)
------ ------ ------
Net pension income from
defined benefit plans $ 2.3 $ 2.0 $ 2.1
====== ====== ======
Weighted Average Assumptions
Discount rate 7.50% 7.25% 8.36%
Rate of increase in
compensation levels 5.17% 5.14% 5.17%
Expected long-term rate of
return on plan assets 8.00% 8.00% 8.00%
====== ====== ======
</TABLE>
Plan assets are invested in a diversified portfolio of equity, debt and
government securities, including 294,000 shares of the Company's common stock at
December 31, 1994.
Contributions to union sponsored, multiemployer pension plans were $.2 in
1994, 1993 and 1992. These plans are not administered by the Company and
contributions are determined in accordance with provisions of negotiated labor
25
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
G -- EMPLOYEE BENEFIT PLANS (Continued)
contracts. As of 1994, the actuarially computed values of vested benefits for
these plans were equal to or less than the net assets of the plans. Therefore,
the Company would have no withdrawal liability. However, the Company has no
present intention of withdrawing from any of these plans, nor has the Company
been informed that there is any intention to terminate such plans.
Net pension income, including Company sponsored defined benefit plans,
multiemployer plans and other plans, was $.9, $.7 and $.8 in 1994, 1993 and
1992, respectively.
The Company also has a contributory stock purchase/stock bonus plan (SPSB
Plan), a non-qualified executive stock purchase program (ESPP) and an employees'
discount stock plan (DSP). The SPSB Plan provides Company pre-tax contributions
of 50% of the amount of employee contributions. The ESPP provides cash payments
of 50% of the employees' contributions, along with an additional payment to
assist employees in paying taxes on the cash payments. To the extent possible,
contributions to the ESPP are invested in the Company's common stock through the
DSP. In addition, the Company matches its contributions when certain
profitability levels, as defined in the SPSB Plan and the ESPP, have been
attained. The Company's total contributions to the SPSB Plan and the ESPP were
$3.3, $2.5 and $2.2 for 1994, 1993 and 1992, respectively.
Under the DSP, eligible employees may purchase a maximum of 4,000,000
shares of Company common stock. The purchase price per share is 85% of the
closing market price on the last business day of each month. Shares purchased
under the DSP were 207,704, 181,306 and 237,713 during 1994, 1993 and 1992,
respectively. Purchase prices ranged from $17 to $43 per share. Since
inception of the DSP in 1982, a total of 2,328,117 shares have been purchased by
employees.
H -- INCOME TAXES
The components of earnings before income taxes are as follows:
<TABLE>
<CAPTION>
Year ended December 31 1994 1993 1992
<S> <C> <C> <C>
Domestic $172.7 $128.7 $ 97.6
Foreign 16.8 12.3 8.8
------ ------ ------
$189.5 $141.0 $106.4
====== ====== ======
</TABLE>
Income tax expense is comprised of the following components:
<TABLE>
<CAPTION>
Year ended December 31 1994 1993 1992
<S> <C> <C>
Current
Federal $ 63.2 $ 34.5 $ 31.7
State and local 10.9 7.4 7.7
Foreign 6.6 4.6 4.0
------ ------ ------
80.7 46.5 43.4
Deferred
Federal (6.2) 7.2 (1.6)
State and local .1 1.4 (.4)
Foreign (.5) -- (.4)
------ ------ ------
(6.6) 8.6 (2.4)
------ ------ ------
$ 74.1 $ 55.1 $ 41.0
====== ====== ======
</TABLE>
26
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
H -- INCOME TAXES (CONTINUED)
Deferred income taxes are provided for the temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities. The major temporary differences that give rise to deferred tax
assets or liabilities at December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
December 31 1994 1993
<S> <C> <C>
Property, plant and equipment $(32.6) $(31.6)
Accrued expenses 23.0 14.4
Prepaid pension cost (6.1) (5.4)
Intangible assets (4.6) (7.7)
Other, net (4.3) (1.0)
------ ------
$(24.6) $(31.3)
====== ======
</TABLE>
Deferred tax assets and liabilities included in the consolidated balance
sheet are as follows:
<TABLE>
<CAPTION>
December 31 1994 1993
<S> <C> <C>
Other current assets $ 17.6 $ 11.9
Deferred income taxes (42.2) (43.2)
------ ------
$(24.6) $(31.3)
======= ======
</TABLE>
Income tax expense, as a percentage of earnings before income taxes,
differs from the statutory federal income tax rate as follows:
<TABLE>
<CAPTION>
Year ended December 31 1994 1993 1992
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 34.0%
Increases (decreases) in rate resulting from
State taxes, net of federal benefit 3.8 4.0 4.5
Restructuring benefit -- -- (1.8)
Non-deductible expenses, primarily goodwill .8 .7 .9
Other (.5) (.6) .9
---- ---- ----
Effective tax rate 39.1% 39.1% 38.5%
==== ==== ====
</TABLE>
Tax benefits of approximately $2.0 associated with the Company's
restructuring charge were not recognized during 1990. These tax benefits became
available during 1992 and were recognized accordingly.
27
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
I -- INDUSTRY SEGMENT INFORMATION
The Company's operations principally consist of manufacturing, marketing
and distributing components and related finished products for the furnishings
industry. In addition, the Company supplies a diversified group of industries
with products which are similar in manufacturing technology to its furnishings
operations. Other than furnishings, no industry segment is significant.
Operating profit is determined by deducting from net sales the cost of
goods sold and the selling, distribution, administrative and other expenses
attributable to the segment operations. Corporate expenses not allocated to the
segments include corporate general and administrative expenses, interest expense
and certain other income and deduction items which are incidental to the
Company's operations. Capital expenditures, as defined herein, include amounts
relating to acquisitions as well as internal expenditures. The identifiable
assets of industry segments are those used in the Company's operations of each
segment. Corporate identifiable assets include cash, land, buildings and
equipment used in conjunction with corporate activities and sundry assets.
Previously reported amounts have been restated to be consistent with current
segment groupings. Financial information by segment is as follows:
<TABLE>
<CAPTION>
Year ended December 31
Furnishings
Products Diversified Corporate Consolidated
<S> <C> <C> <C> <C>
1994
Net sales $1,398.2 $459.9 $ -- $1,858.1
Operating profit 153.4 54.7 (18.6) 189.5
Capital expenditures 91.5 30.1 3.9 125.5
Depreciation and
amortization expense 42.8 12.2 1.9 56.9
Identifiable assets 834.2 244.6 41.1 1,119.9
1993
Net sales $1,195.8 $330.9 $ -- $1,526.7
Operating profit 129.0 33.9 (21.9) 141.0
Capital expenditures 68.4 16.9 3.0 88.3
Depreciation and
amortization expense 35.9 8.0 1.4 45.3
Identifiable assets 710.8 151.4 39.7 901.9
1992
Net sales $1,041.0 $274.0 $ -- $1,315.0
Operating profit 104.4 27.2 (25.2) 106.4
Capital expenditures 30.8 6.8 3.0 40.6
Depreciation and
amortization expense 34.1 6.8 1.7 42.6
Identifiable assets 592.1 125.2 54.7 772.0
</TABLE>
28
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Leggett & Platt, Incorporated and Subsidiaries
J -- CONTINGENCIES
ENVIRONMENTAL: From time to time, the Company is involved in proceedings
related to environmental matters. In one instance, the United States
Environmental Protection Agency (EPA) ordered one of the Company's subsidiaries
to investigate potential releases into the environment and, if necessary, to
perform corrective action. The subsidiary successfully appealed the EPA's
order. On June 27, 1994, the EPA indicated it planned to issue a new, similar
order. The subsidiary, the EPA and the Florida Department of Environmental
Protection (FDEP) are negotiating an agreement to investigate and, if necessary,
take corrective action to resolve the dispute. Estimated costs to perform an
agreed upon investigation and any related corrective actions are not material
and have been provided for in the financial statements as of December 31, 1994.
If current negotiations with the EPA and the FDEP are unsuccessful, and the
EPA issues a new order, the subsidiary expects it would appeal the new order.
If this appeal were unsuccessful, the costs to perform any required
investigation and, if necessary, corrective action cannot be reasonably
estimated. One-half of any costs, including the costs of voluntary actions,
would be reimbursed to the Company under a contractual obligation of a former
joint owner of the subsidiary. No provision for the costs of performing
investigation and corrective action beyond any agreed upon investigation and
remediation mentioned above has been recorded in the Company's financial
statements. If any such additional investigation and corrective action is
required, management believes the possibility of a material adverse effect on
the Company's consolidated financial condition or results of operation is
remote.
OTHER RISKS: The Company obtains insurance for worker's compensation,
automobile, product and general liability, property loss and medical claims.
However, the Company has elected to retain a significant portion of expected
losses through the use of deductibles. Provisions for losses expected under
these programs are recorded based upon the Company's estimates of the aggregate
liability for claims incurred. These estimates utilize the Company's prior
experience and actuarial assumptions that are provided by the Company's
insurance carrier. The total estimated liability for these losses at December
31, 1994 and 1993 was $33.0 and $22.0, respectively, and is included in accrued
expenses. The increase in the liability from 1993 to 1994 is not indicative of
a change in the Company's loss experience, but rather is due to a change in the
procedure for funding these losses with the Company's insurance carrier.
29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Leggett & Platt, Incorporated:
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of earnings, of changes in shareholders' equity
and of cash flows present fairly, in all material respects, the financial
position of Leggett & Platt, Incorporated and Subsidiaries at December 31, 1994
and 1993, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1994 in conformity with
generally accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
St. Louis, Missouri
February 14, 1995
30
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Dated: March 28, 1995 LEGGETT & PLATT, INCORPORATED
By: /s/ HARRY M. CORNELL, JR.
----------------------------------
Harry M. Cornell, Jr.
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
(a) PRINCIPAL EXECUTIVE OFFICER:
/S/ HARRY M. CORNELL, JR. Chairman of the Board, March 28, 1995
--------------------------------- Chief Executive Officer
Harry M. Cornell, Jr. and Director
(b) PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER:
/S/ MICHAEL A. GLAUBER Senior Vice President, March 28, 1995
--------------------------------- Finance & Administration
Michael A. Glauber
(c) DIRECTORS:
HERBERT C. CASTEEL * Director
---------------------------------
Herbert C. Casteel
ROBERT TED ENLOE, III * Director
---------------------------------
Robert Ted Enloe, III
RICHARD T. FISHER * Director
---------------------------------
Richard T. Fisher
FRANK E. FORD, JR. * Director
---------------------------------
Frank E. Ford, Jr.
31
<PAGE>
Signature Title Date
--------- ----- ----
ROBERT A. JEFFERIES, JR. * Director
---------------------------------
Robert A. Jefferies, Jr.
ALEXANDER M. LEVINE * Director
---------------------------------
Alexander M. Levine
RICHARD L. PEARSALL * Director
---------------------------------
Richard L. Pearsall
MAURICE E. PURNELL, JR. * Director
---------------------------------
Maurice E. Purnell, Jr.
FELIX E. WRIGHT * Director
---------------------------------
Felix E. Wright
* By /s/ ERNEST C. JETT March 28, 1995
___________________________
Ernest C. Jett
Attorney-in-Fact pursuant
to Power of Attorney
dated as of February 8, 1995
32
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ----------- ----------
<C> <S> <C>
3.1 The Restated Articles of Incorporation of the Company, filed as Exhibit 3 to
Registrant's Form 10-Q for the quarter ended June 30, 1987, are
incorporated by reference.
3.2 Amendment to Restated Articles of Incorporation of the Company, filed as
Exhibit 3.1 to Form S-4 (Registration No. 33-66238 which was filed with
the Securities and Exchange Commission on July 19, 1993), is incorporated
by reference.
3.3 By-Laws of the Company as amended and restated as of August 11, 1993,
filed as Exhibit 3.2 to Registrant's Form 10-Q for the quarter ended June
30, 1993, are incorporated by reference.
4.1 Article III of Registrant's Restated Articles of Incorporation, filed as
Exhibit 3.1 above, is incorporated by reference.
4.2 Rights Agreement dated February 15, 1989 between Registrant and The
Chase Manhattan Bank, N.A., pertaining to preferred stock rights
distributed by Registrant, filed as Exhibit 1 to Registrant's Form 8-A dated
February 15, 1989, and Amendment No. 1 to Rights Agreement dated
August 29, 1994, filed as Exhibit 3 to Registrant's Form 8-A/A dated
September 8, 1994, are incorporated by reference.
4.2A Letter Agreement dated December 18, 1991 between Registrant and Mellon
Securities Trust Company ("Mellon") relating to appointment of Mellon as
Rights Agent under the Rights Agreement, filed as Exhibit 4.2A to
Registrant's Form 10-K for the year ended December 31, 1991, is
incorporated by reference.
10.1(1) Employment Agreement between the Company and Mr. Cornell dated May
9, 1979, as amended, filed as Exhibit 10.1 to Registrant's Form 10-K for
the year ended December 31, 1989, and Amendment No. 3 to Employment
Agreement dated March 15, 1993, filed as Exhibit 10.1 to Registrant's
Form 10-K for the year ended December 31, 1992, are incorporated by
reference.
10.2(1) Employment Agreement between the Company and Mr. Wright dated May
1, 1981, as amended, filed as Exhibit 10.2 to Registrant's Form 10-K for
the year ended December 31, 1989, is incorporated by reference.
10.3(1) Employment Agreement between the Company and Mr. Jefferies dated
November 7, 1990, filed as Exhibit 10.3 to Registrant's Form 10-K for the
year ended December 31, 1990, and Amendment No. 1 to Employment
Agreement dated January 1, 1993, filed as Exhibit 10.3 to Registrant's
Form 10-K for the year ended December 31, 1992, are incorporated by
reference.
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
10.4(1) Severance Benefit Agreement between the Company and Harry M. Cornell,
Jr. dated May 9, 1984.
10.5(1) Severance Benefit Agreement between the Company and Felix E. Wright
dated May 9, 1984.
10.6(1) Severance Benefit Agreement between the Company and Robert A.
Jefferies, Jr. dated May 9, 1984.
10.7(1) Reference is made to Appendix A to Registrant's definitive Proxy Statement
dated April 4, 1994 used in conjunction with Registrant's Annual Meeting
of Shareholders held on May 11, 1994 for a copy of the Company's 1989
Flexible Stock Plan, as amended, which is incorporated by reference.
10.8(1) Summary description of the Company's Key Management Incentive
Compensation Plan, filed as Exhibit 10.7 of Registrant's Form 10-K for the
year ended December 31, 1993, which is incorporated by reference.
10.9(1) Reference is made to description of certain long-term disability
arrangements between Registrant and its salaried employees filed as Exhibit
10.7 of Registrant's Form 10-K for the year ended December 31, 1991,
which is incorporated by reference.
10.10(1) Reference is made to Exhibit D to Registrant's definitive Proxy Statement
dated April 1, 1986 used in conjunction with Registrant's Annual Meeting
of Shareholders held on May 7, 1986 for a copy of the form of
Indemnification Agreement approved by the shareholders of Registrant and
entered into between Registrant and each of its directors and executive
officers, which is incorporated by reference.
10.11(1) Registrant's Director Stock Option Plan, filed as Appendix A to
Registrant's definitive Proxy Statement dated March 31, 1989 used in
conjunction with Registrant's Annual Meeting of Shareholders held on May
10, 1989, and Amendment to Director Stock Option Plan dated May 13,
1992, filed as Exhibit 10.10 to Registrant's Form 10-K for the year ended
December 31, 1992, are incorporated by reference.
10.12(1) Reference is made to Leggett & Platt, Incorporated Executive Stock
Purchase Program adopted June 6, 1989 under the Company's 1989
Flexible Stock Plan, and effective as of July 1, 1989, as amended on
November 13, 1991, filed as Exhibit 10.11 of Registrant's Form 10-K for
the year ended December 31, 1991, which is incorporated by reference.
10.13(1) Stock Award Agreements between the Company and Felix E. Wright (dated
July 27, 1993) and Harry M. Cornell, Jr. (dated December 20, 1993), filed
as Exhibits 10.18 and 10.19, respectively, of Registrant's Form 10-K for
the year ended December 31, 1993, are incorporated by reference.
10.14(1) Stock Award Agreement dated July 5, 1994 between the Company and
Felix E. Wright.
10.15(1) Stock Award Agreement dated July 5, 1994 between the Company and
Duane W. Potter.
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
<C> <S>
10.16(1) Stock Award Agreement dated July 5, 1994 between the Company and
David S. Haffner.
10.17(1) Stock Award Agreement dated December 20, 1994 between the Company
and Harry M. Cornell, Jr.
10.18(1) Summary description of the Company's Deferred Compensation Program.
11 Statement of Computation of Earnings Per Common Share.
21 Schedule of Subsidiaries of Registrant.
23 Consent of Independent Accountants.
24 Power of Attorney executed by members of the Company's Board of
Directors regarding this Form 10-K and certain registration statements.
27 Financial Data Schedule
</TABLE>
(1) Denotes management contract or compensatory plan or arrangement.
35
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Shareholders of
Leggett & Platt, Incorporated
Our audits of the consolidated financial statements referred to in our
report dated February 14, 1995, appearing on page 30 of Leggett & Platt,
Incorporated's Annual Report on Form 10-K for the year ended December 31, 1994,
also included an audit of the Financial Statement Schedule listed in Item 14-2
in Part IV of this Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP
St. Louis, Missouri
February 28, 1995
36
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the three years ended December 31, 1994
(Amounts in millions)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
-------- ------------ --------- ---------- -----------
Additions
Charged
Balance at to Costs Balance at
Beginning of and End of
Description Period Expenses Deductions Period
----------- ------------ --------- ---------- -----------
<S> <C> <C> <C> <C>
Year ended December 31, 1994
Valuation reserve for non-operating
sundry assets.................................... $1.7 $ .3 $ - $2.0
==== ==== ==== ====
Allowance for doubtful receivables................ $7.2 $5.7 $5.4(B) $7.5
==== ==== ==== ====
Year ended December 31, 1993
Valuation reserve for non-operating
sundry assets.................................... $2.7 $ .2 $1.2(A) $1.7
==== ==== ==== ====
Allowance for doubtful receivables................ $7.1 $2.8 $2.7(B) $7.2
==== ==== ==== ====
Year ended December 31, 1992
Valuation reserve for non-operating
sundry assets.................................... $1.1 $1.6 $ - $2.7
==== ==== ==== ====
Allowance for doubtful receivables................ $8.2 $3.6 $4.7(B) $7.1
==== ==== ==== ====
</TABLE>
_____________________
(A) Portion of reserve balance associated with assets disposed during 1993.
(B) Uncollectible accounts charged off, net of recoveries.
37
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 10.4
SEVERANCE BENEFIT AGREEMENT
TABLE OF CONTENTS
-----------------
PAGE
----
<C> <S> <C>
1. Change in Control; Employment Agreement...................................1
1.1 Change in Control....................................................1
1.2 Employment Agreement.................................................2
2. Termination of Employment Following a Change in Control...................3
2.1 General..............................................................3
2.2 Termination for Disability...........................................3
2.3 Termination by Company for "Cause"...................................3
2.4 Termination by Executive for Good Reason.............................4
2.5 Notice of Termination................................................6
2.6 Date of Termination..................................................7
2.7 Prior Notice Required of Company Actions.............................7
3. Benefits upon Termination of Employment...................................7
3.1 General..............................................................7
3.2 Base Salary Through Date of Termination; Previously Earned Bonus.....8
3.3 Pro-Rata Bonus for Year of Termination...............................8
3.4 Monthly Severance Payments...........................................8
3.5 Fringe Benefits (General)............................................8
3.6 Retirement Plans.....................................................9
3.7 Stock Options.......................................................10
3.8 Purchase of Company Car.............................................10
3.9 Job Search Assistance; Legal Fees; etc..............................10
3.10 Repurchase of Company Shares Owned by Executive.....................11
3.11 Termination Which Does Not Require Payment of Termination Benefits..11
4. New Employment; Reduction of Termination Benefits........................11
5. Voluntary Termination of Employment By Executive.........................12
6. Termination of Employment Prior to Change in Control.....................13
7. Successor; Binding Agreement.............................................13
8. Miscellaneous............................................................14
8.1 Notice..............................................................14
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<C> <S> <C>
8.2 No Waiver................................................................14
8.3 Enforceability...........................................................14
8.4 Disputes.................................................................15
8.5 Sections; Captions.......................................................15
8.6 Term of Agreement........................................................15
8.7 No Right of Offset.......................................................15
8.8 Successive Changes in Control............................................15
8.9 Interpretation of Agreement..............................................16
</TABLE>
ii
<PAGE>
SEVERANCE BENEFIT AGREEMENT
---------------------------
This Severance Benefit Agreement (the "Agreement") is made as of May 9,
1984 by Leggett & Platt, Incorporated, No. 1, Leggett Road, Carthage, Missouri
64836 (the "Company") and HARRY M. CORNELL, JR. (the "Executive"), residing at
1401 Bellaire Place, Joplin, Missouri 64801.
RECITALS
--------
The Executive functions as President, Chairman of the Board and Chief
Executive Officer of the Company on the date hereof and is one of the key
employees of the Company.
The Company considers the maintenance of sound and vital management
essential to protecting and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that in today's
business environment the possibility of a change in control of the Company may
exist in the future. The Company further recognizes that such possibility, and
the uncertainty which it may raise among key executives, could result in the
departure or distraction of key executives to the detriment of the Company and
its shareholders. Accordingly, the Board of Directors of the Company (the
"Board") has determined that appropriate steps should be taken (i) to further
induce the Executive to remain with the Company and (ii) to reinforce and
encourage the continued attention and dedication of the Executive to his
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
Now, Therefore, in consideration of the premises and for other good and
valuable considerations, receipt of which are hereby acknowledged, the Company
and the Executive do agree as follows:
1. Change in Control; Employment Agreement
---------------------------------------
1.1 Change in Control
-----------------
The Company may be required to provide certain benefits to the
Executive under this Agreement following each and every "Change in Control" of
the Company.
A "Change in Control" of the Company shall be deemed to have
occurred if:
(a) There is any change in control as contemplated by (i) Item 5(f) of
Schedule 14A, Regulation 14A, promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or (ii)
Item 1
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of Form 8-K promulgated by the Securities and Exchange Commission
under the Exchange Act; or
(b) Any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of
25% or more of the combined voting power of the Company's then
outstanding voting securities; or
(c) Those persons serving as directors of the Company on the date of
this Agreement (the "Original Directors") and/or their Successors
do not constitute a majority of the whole Board of Directors of
the Company (the term "Successors" shall mean those directors
whose election or nomination for election by the Company's
shareholders has been approved by the vote of at least two-thirds
of the Original Directors and previously qualified Successors
serving as directors of the Company at the time of such election
or nomination for election); or
(d) The Company shall be a party to a merger or consolidation with
another corporation and as a result of such merger or
consolidation, less than 75% of the outstanding voting securities
of the surviving or resulting corporation shall be owned in the
aggregate by the former shareholders of the Company as the same
shall have existed immediately prior to such merger or
consolidation; or
(e) The Company liquidates, sells or otherwise transfers all or
substantially all of its assets to a person not controlled by the
Company both immediately prior to and immediately after such sale.
1.2 Employment Agreement
--------------------
Any benefits provided to the Executive under this Agreement will unless
specifically stated otherwise in this Agreement be in addition to and not in
lieu of any benefits that may be provided the Executive under his employment
agreement with the Company dated May 9, 1979 (this agreement as previously,
herein or hereafter amended, restated or superseded is herein called the
"Employment Agreement").
Nothing in this Agreement is to be deemed to give the Company the right to
take any action or engage in any omission with respect to the Executive
(including Company Actions as defined in Section 2.4) at any time when any such
action or omission is not permissible and proper under the Employment Agreement
if then in force. Similarly, except as provided otherwise in this Agreement
(e.g. Section 2.4 and Section 5) nothing in this Agreement is to be deemed to
give the Executive the right to take any action or engage in any
2
<PAGE>
omission with respect to the Company at any time when any such act or omission
is not permissible and proper under the Employment Agreement if then in force.
This Agreement shall continue for the term provided in Section 8.6 and
shall not be affected by any termination of the Employment Agreement.
2. Termination of Employment Following a Change in Control
-------------------------------------------------------
2.1 General
-------
During the 36-month period immediately following each and every Change in
Control (the "Protected Period"), the Executive and the Company shall comply
with all provisions of this Section 2 regarding termination of the Executive's
employment.
2.2 Termination for Disability
--------------------------
If the Employment Agreement is not in force, the Company may terminate the
Executive's employment for Disability. If the Employment Agreement is in force,
the Company may terminate the Executive's employment for disability only in
accordance with the terms of the Employment Agreement. "Disability" as used in
this Agreement as distinguished from the Employment Agreement shall mean the
Executive's absence from, and his inability to substantially perform, his duties
with the Company for a continuous period of six or more months as a result of
physical causes or mental illness. During any period prior to the termination of
his employment that the Executive is absent from, and is unable to substantially
perform, his duties with the Company as a result of physical causes or mental
illness, the Company shall continue to pay the Executive his full base salary at
the rate then in effect and any bonuses earned by the Executive under Company
bonus plans until such time as the Executive's employment is terminated by the
Company for Disability. Following termination of employment under this Section,
the Executive's benefits shall be determined in accordance with the Company's
long term disability program as in effect on the date hereof, or any successor
program then in effect.
2.3 Termination by Company for "Cause"
----------------------------------
If the Employment Agreement is not in force, the Company may terminate the
Executive for Cause as defined in this Agreement. If the Employment Agreement
is in force, the Company may terminate the Executive for Cause only in
accordance with the terms of the Employment Agreement.
Termination for "Cause" under this Agreement as distinguished from the
Employment Agreement shall be limited to the following:
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<PAGE>
(a) The Executive's conviction of any crime involving money or other
property of the Company or any of its subsidiaries or of any other
crime (whether or not involving the Company or any of its
subsidiaries) that constitutes a felony in the jurisdiction
involved; or
(b) The Executive's continued, repeated, willful violations of
specific written directions of the Board or the Company's chief
executive officer, which directions are consistent with this
Agreement and the Executive's duties and do not constitute Company
Action as defined in Section 2.4 and which violations continue
following the Executive's receipt of such written directions; or
(c) The Executive's continued, repeated, willful failure to perform
his duties; provided, however, that no discharge shall be deemed
for Cause under this subsection (c) unless the Executive first
receives written notice from the Board or the Company's chief
executive officer advising the Executive of specific acts or
omissions alleged to constitute a failure to perform his duties,
and such failure continues after the Executive shall have had a
reasonable opportunity to correct the acts or omissions so
complained of.
No act or failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that his action or omission was in the best interest
of the Company. Moreover, the Executive should not be terminated for Cause
unless and until there shall have been delivered to the Executive a notice of
termination duly adopted by the affirmative vote of at least three-quarters of
the entire membership of the Board at a meeting of the Board called and held for
the purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was guilty of the
conduct set forth in Section 2.3(a), (b) or (c) and specifying the particulars
thereof in detail.
A termination shall not be deemed for Cause if, for example, the
termination results from the Company's determination that the Executive's
position is redundant or unnecessary or that the Executive's performance is
unsatisfactory or if the termination stems from the Executive's refusal to agree
to or accept any Company Action described and defined in Section 2.4.
2.4 Termination by Executive for Good Reason
----------------------------------------
The Executive may, whether or not his Employment Agreement remains in
force, terminate his employment for "Good Reason" by giving notice of
termination to the Company following (i) any action or omission by the Company
described in this Section 2.4 or
4
<PAGE>
(ii) receipt of notice from the Company of the Company's intention to take any
such action or engage in any such omission. A termination of employment under
this Section 2.4 shall be deemed a valid and proper termination of the
Employment Agreement if then in force and to this extent the parties agree that
the Employment Agreement is hereby amended.
The actions or omissions which may lead to a termination of employment
for Good Reason (herein collectively and severally "Company Actions") are as
follows:
(a) A reduction by the Company in the Executive's base salary as in effect
on the date hereof or as the same may be increased from time to time or
a failure by the Company to increase the Executive's base salary each
year during the Protected Period by an amount which at least equals, on
a percentage basis, the average percentage increase in base salary for
all officers of the Company during the three full calendar years
immediately preceding the Change in Control; or
(b) A change in the Executive's reporting responsibilities, titles or
offices as in effect immediately prior to a Change in Control; or
(c) The assignment to the Executive of any positions, duties or
responsibilities inconsistent in the good faith opinion of the
Executive with the Executive's positions, duties and responsibilities
with the Company immediately prior to the Change in Control; or
(d) A failure by the Company (i) to continue any cash bonus or other
incentive plans substantially in the forms in effect immediately prior
to the Change in Control, or (ii) to continue the Executive as a
participant in such plans on at least the same basis as the Executive
participated in accordance with the plans immediately prior to the
Change in Control; or
(e) A requirement by the Company that the Executive be based or perform his
duties anywhere other than at the Company's Corporate Office location
immediately prior to the Change in Control, except for required travel
on the Company's business to an extent substantially consistent with
the Executive's business travel obligations immediately prior to the
Change in Control or, in the event the Executive consents to any
relocation, the failure by the Company to pay (or reimburse the
Executive for) all reasonable expenses incurred by him relating to a
change of his principal residence in connection with such relocation
and to indemnify the Executive against any loss realized on the sale of
his principal residence in connection with any such change of residence
(loss
5
<PAGE>
is defined as the difference between the actual sale price of such
residence and the higher of (i) the aggregate investment in such
residence (including improvements thereto) or (ii) the fair market
value of such as determined by a real estate appraiser designated by
the Executive and reasonably satisfactory to the Company); or
(f) A failure by the Company to continue in effect any benefit or other
compensation plan (e.g. stock ownership plan, stock purchase plan,
stock option plan, life insurance plan, health and accident plan or
disability plan) in which the Executive is participating at the time of
a Change in Control (or plans providing the Executive with
substantially similar benefits), the taking of any action by the
Company which would adversely affect the Executive's participation in
or materially reduce the Executive's benefits under any of such plans
or deprive the Executive of any material fringe benefit enjoyed by him
at the time of the Change in Control, or the Company's failure to
provide the Executive with the number of paid vacation days to which he
is entitled in accordance with the Company's normal vacation practices
with respect to the Executive at the time of the Change in Control; or
(g) A failure by the Company to obtain the assumption agreement to perform
this Agreement by any successor as contemplated by Section 7 of this
Agreement; or
(h) Any purported termination of the Executive's employment that is not
carried out (i) pursuant to a notice of termination which satisfies the
requirements of Section 2.5 or (ii) in accordance with Section 2.3, if
applicable; and for purposes of this Agreement, no such purported
termination shall be effective.
2.5 Notice of Termination
---------------------
Any purported termination by the Company of the Executive's employment
under Section 2.2 (Disability) or 2.3 (for Cause) or by the Executive under
Section 2.4 (for Good Reason) shall be communicated by notice of termination to
the other party. A notice of termination shall mean a notice which shall include
the specific termination Section in this Agreement relied upon and shall set
forth in reasonable detail, the facts and circumstances claimed to provide a
basis for termination of employment under the Section so indicated.
6
<PAGE>
2.6 Date of Termination
-------------------
The date the Executive's employment is terminated under this
Agreement for Disability, for Cause or for Good Reason is called the "Date of
Termination." In cases of Disability, the date of termination shall be 30 days
after notice of termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during such 30
day period). If the Executive's employment is terminated for Cause, the Date of
Termination shall be the date specified in the notice of termination. If the
Executive's employment is terminated for Good Reason, the Date of Termination
shall be the date set out in the notice of termination.
Any dispute by a party hereto regarding a notice of termination
delivered to such party must be conveyed to the other party within 30 days after
the notice of termination is given. If the particulars of the dispute are not
conveyed within the 30-day period, then the disputing party's claims regarding
the termination shall be forever deemed waived.
2.7 Prior Notice Required of Company Actions
----------------------------------------
During the Protected Period, the Company shall not terminate the
Executive's employment (except for Disability or for Cause or pursuant to the
Employment Agreement) or take any Company Action as defined in Section 2.4
without first giving the Executive at least three months' prior notice of
termination or the planned Company Action, as the case may be.
3. Benefits upon Termination of Employment
---------------------------------------
3.1 General
-------
If, during the Protected Period following each Change in Control,
the Executive's employment is terminated either (i) by the Company (other than
for Disability or Cause under this Agreement and other than for disability or
cause under the Employment Agreement) or (ii) by the Executive for Good Reason,
then the Executive, at his election, shall be entitled to the benefits provided
in this Section 3 (collectively and severally "Termination Benefits"). If the
Executive elects to receive Termination Benefits under this Agreement then he
shall automatically forfeit his option under Section 9 of the Employment
Agreement to render consulting services to the Company on the terms and
conditions set out in the Employment Agreement. This forfeiture shall not in any
manner affect the option of the Company under Section 9 of the Employment
Agreement to obtain the consulting services of the Executive.
7
<PAGE>
3.2 Base Salary Through Date of Termination; Previously Earned Bonus
----------------------------------------------------------------
The Company shall promptly pay the Executive his full base salary
through the Date of Termination at the rate in effect at the time notice of
termination is given. In addition, the Company shall promptly pay the amount of
any bonus for a past period which has been earned by the Executive but not yet
paid under the applicable bonus plan. The Company shall give the Executive
credit for any vacation earned but not taken.
3.3 Pro-Rata Bonus for Year of Termination
--------------------------------------
The Company shall pay the Executive a pro-rata bonus for the year in
which his employment terminates. The pro-rata bonus shall be equal to "A"
divided by "B" with the quotient multiplied by "C" where:
(a) "A" equals the number of days the Executive is employed by the
Company in the year in which the termination of employment occurs
(the "Termination Year");
(b) "B" equals 365; and
(c) "C" equals the maximum bonus the Executive would have been eligible
for in the Termination Year under Section 4.2 of his Employment
Agreement or under the Company's Executive and Key Man Incentive
Compensation Plan (or successor plans), whichever may be applicable.
The pro-rata bonus shall be paid by the Company in a lump sun,
concurrently with the first severance pay installment provided for in Section
3.4.
3.4 Monthly Severance Payments
--------------------------
The Company shall pay the Executive aggregate severance payments equal
to (i) 160% of the Executive's annual base salary as of the date of the Change
in Control or as of the Date of Termination, whichever is greater, multiplied by
(ii) three. The severance payments shall be made in 36 equal, consecutive
monthly installments, with the first installment to be on the first day of the
first month immediately following the Date of Termination. The 160% figure in
this Section shall be appropriately increased or decreased if and as the
Executive's maximum annual bonus potential (expressed as a percentage of his
annual base salary) is increased or decreased.
3.5 Fringe Benefits (General)
-------------------------
The Company shall maintain in full force, for the continued benefit of
the Executive for three years after the Date of Termination, all employee
benefit plans,
8
<PAGE>
programs and/or arrangements (collectively and severally "Benefit Plans") in
which the Executive was entitled to participate immediately prior to the Date of
Termination provided the Executive's continued participation is possible under
the general terms and provisions of such Benefit Plans. If the Executive's
participation in any such Benefit Plan is barred, the Company shall arrange to
provide the Executive with benefits substantially similar to those which the
Executive is entitled to receive under such Plans. At the end of the three
year period of coverage, the Executive shall have the option to have assigned to
him at no cost and with no apportionment of prepaid premiums, any assignable
insurance policy owned by the Company and relating specifically to the
Executive.
3.6 Retirement Plans
----------------
The Company shall pay the Executive in cash a lump sum additional
retirement benefit. Such benefit shall be paid at the Executive's normal
retirement age (or earlier retirement age should the Executive so elect) as
defined in the retirement programs in which the Executive participates or any
successor programs in effect on the date of any Change in Control. Such
additional benefit shall be equal to the actuarial equivalent of the additional
retirement benefit to which the Executive would have been entitled under such
retirement programs had he accumulated three additional years of continuous
service (following the Date of Termination) under such retirement programs both
for purposes of determining eligibility for benefits and for purposes of
calculating the amount of such benefits. If any retirement program requires
contributions by participants and the Executive is precluded by the terms of the
program from making such contributions following the Date of Termination, then
the amount of additional retirement benefit payable under this Section 3.6 shall
be equitably adjusted to reflect the absence of contributions by the Executive.
The Company shall pay the Executive in cash each month the result obtained
by subtracting "Y" from "X" where:
(a) "Y" is the monthly Pension Payment the Executive receives under
Section 6 of the Employment Agreement; and
(b) "X" is the monthly Pension Payment the Executive would have received
under Section 6 of the Employment Agreement had his employment
terminated three years later than it in fact terminated.
The benefits under this Section 3.6 are in addition to those the Executive
may be entitled to under the retirement programs in question. In addition, the
benefits provided under this Section 3.6 do not in any way limit the benefits
payable to the Executive under Section 3.5.
9
<PAGE>
3.7 Stock Options
-------------
The Company shall at the request of the Executive accelerate and make
immediately exercisable in full all unexercised stock options which the
Executive then holds to acquire securities from the Company. This shall be
done, to the maximum extent possible, in a manner that will allow the Executive,
upon the exercise of any such options, to obtain favorable Federal Income Tax
treatment. The Executive's request may be made at any time during the period
beginning with the giving of the notice of termination and ending three months
after the Executive's employment terminates (the "Option Election Period").
Instead of exercising any or all outstanding stock options then held by
him, the Executive may elect during the Option Exercise Period to surrender to
the Company his rights in such outstanding stock options (whether or not then
exercisable). Upon such surrender, the Company shall pay to the Executive an
amount in cash per optioned share equal to the difference between (i) the option
price of such share and (ii) the higher of: (x) the closing price of the
Company's shares on the date of the Change in Control, (y) the closing price of
the Company's shares on the date the options (or in the case of Section 3.10,
the shares) are surrendered to the Company, or (z) the highest price per Company
share actually paid in connection with any Change in Control of the Company.
If, within six months of the taking of any Company Action under Section
2.4, the Executive dies while still employed by the Company, the Executive's
estate shall be entitled, upon notice to the Company within 90 days of the
Executive's death, to be paid an amount equal to the amount the Executive would
have received had he surrendered all of his stock options under this Section as
of the date preceding his death. Such amount shall be paid in cash by the
Company within 45 days after receipt of the notice and the delivery of an
instrument surrendering all rights the Executive's estate may have held to the
stock options.
3.8 Purchase of Company Car
-----------------------
The Company shall permit the Executive during the Option Election Period to
purchase any Company automobile the Company was providing for the Executive's
use at the time notice of termination was given. The purchase price shall be
the book or wholesale value of such automobile at such time, whichever is lower.
3.9 Job Search Assistance; Legal Fees; etc.
---------------------------------------
The Company shall reimburse the Executive for the costs of his job search,
including air fares, telephone conversations, advertisements, executive
placement or search fees and the like to the extent not reimbursed by others.
In addition, the Company shall provide the Executive with adequate secretarial
assistance and office space while the Executive's job search continues. The
Company shall promptly reimburse the Executive for all relocation costs to the
extent such reimbursement is not made by the Executive's new
10
<PAGE>
employer. The Company's obligations under this first paragraph of Section 3.9
shall terminate three years from the Date of Termination.
The Company shall pay all relocation and indemnity payments as set forth in
Section 2.4(e), and all legal fees and expenses incurred by the Executive as a
result of the termination of his employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination of
employment or in seeking to obtain or enforce any right or benefit provided by
this Agreement).
3.10 Repurchase of Company Shares Owned by Executive
-----------------------------------------------
Upon request made during the Option Election Period, the Company shall
purchase all Company shares owned by the Executive immediately prior to the Date
of Termination. Within 45 days after the request is made, the Executive's
shares properly endorsed and free of all claims shall be delivered to the
Company. Thereupon, the Company shall pay the purchase price in cash. The
purchase price shall be the highest price per share that can be computed under
Section 3.7.
3.11 Termination Which Does Not Require Payment of Termination Benefits
------------------------------------------------------------------
No Termination Benefits need be provided by the Company to the Executive
under this Section 3 if the Executive's employment is terminated:
(a) By his death; or
(b) By the Executive for any reason other than for Good Reason (e.g. by
retirement); or
(c) By the Company for Disability or for Cause under this Agreement or for
disability or cause under the Employment Agreement.
As used herein, retirement by the Executive means termination of employment
in accordance with the Company's normal retirement policy, including early
retirement, generally applicable to the Company's salaried employees or in
accordance with any special retirement arrangement jointly established by the
Company and the Executive and mutually agreeable to both.
4. New Employment; Reduction of Termination Benefits
-------------------------------------------------
The Termination Benefits provided under Section 3 shall not be treated as
damages, but rather shall be treated as severance compensation to which the
Executive is entitled. The Executive shall not be required to mitigate the
amount of any Termination Benefit provided under Section 3 by seeking other
employment or otherwise. If, however,
11
<PAGE>
following a termination of employment which invokes Section 3, the Executive
becomes employed full time by a third party (as distinguished from becoming
self-employed or being employed by an employer controlled by the Executive
and/or members of his immediate family), then the amount of any cash
compensation (including base salary and bonuses) received by the Executive from
such third party shall reduce on a dollar for dollar basis, but not below zero,
the amount of cash payments which the Executive is thereafter entitled to
receive under Section 3.4. In addition, any fringe benefits that the Executive
may receive from full time employment by a third person (as distinguished from
self-employment or employment by an employer controlled by the Executive and/or
members of his immediate family) shall be applied against and reduce any fringe
benefits thereafter to be made available to the Executive under Section 3.5. In
no event shall the Executive be required to return to the Company any
Termination Benefits received by him prior to his commencement of full time
employment with a third person.
5. Voluntary Termination of Employment By Executive
------------------------------------------------
The Executive may voluntarily terminate his employment with the Company for
any reason (including retirement) within one year of any Change in Control
described in this Section. A termination of employment under this Section 5
shall be deemed a valid and proper termination of the Employment Agreement if
then in force and to this extent the parties agree that the Employment Agreement
is hereby amended. Upon any such termination of employment the Executive may in
his sole discretion elect to receive, and the Company shall provide, the
following benefits and no others under this under this Agreement:
(a) The Company shall promptly pay the Executive those salary, bonus and
vacation payments provided for in Section 3.2, which section is
incorporated by reference in this Section 5.
(b) The Company shall promptly pay the Executive the pro-rata bonus
provided for in Section 3.3, which section is incorporated by
reference in this Section 5.
(c) The Company shall promptly pay the Executive a non-forfeitable lump
sum cash termination payment equal to 75% of the Executive's total
cash compensation for the calendar year immediately preceding the Date
of Termination of his employment.
(d) The Company shall provide the Executive for one year with those fringe
benefits described in Section 3.5, which section is incorporated by
reference in this Section 5. The fringe benefits provided under this
subsection (d) shall be reduced by any fringe benefits the Executive
may thereafter receive from full time employment by a third person (as
distinguished from self-employment).
12
<PAGE>
If the Executive does not elect to receive benefits under this Section 5,
then he shall remain eligible to receive Termination Benefits in accordance with
the provisions of Section 3.
The benefits payable to the Executive under this Section 5 are in addition
to all benefits provided to him under the Employment Agreement except as
provided in the next following sentence. If the Executive elects to receive
benefits under this Section 5 then he shall automatically forfeit his option
under Section 9 of the Employment Agreement to render consulting services to the
Company on the terms and conditions set out in the Employment Agreement. This
forfeiture shall not in any manner affect the option of the Company under
Section 9 of the Employment Agreement to obtain the consulting services of the
Executive.
The only Change in Control that will permit an Executive to make an
election under this Section 5 is a Change in Control that is opposed by a
majority vote of the Board and in connection with such Change in Control or as a
result thereof:
(a) A majority of the whole Board becomes comprised of persons other than
Original Directors or their Successors (as those terms are defined in
Section l(c)); or
(b) Any person (as defined in Section l(b)) becomes the beneficial owner
(as defined in Section l(b)); directly or indirectly of 50% or more of
the combined voting power of the Company's then outstanding voting
securities.
6. Termination of Employment Prior to Change in Control
----------------------------------------------------
Prior to a Change in Control and if there is no Employment Agreement in
force, the Executive shall not voluntarily terminate his employment with the
Company except upon at least three months' prior notice. Similarly, the Company
shall not terminate the Executive's employment other than for Cause except upon
at least three months' prior notice. If the Employment Agreement is in force,
termination of employment by the Executive or the Company shall be governed by
the terms thereof.
7. Successor; Binding Agreement
----------------------------
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place (the assumption
shall be by agreement in form and substance satisfactory to the Executive).
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
13
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Executive, at his election, to Termination Benefits from the Company in the same
amount and on the same terms as the Executive would be entitled to hereunder if
he terminated his employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such election becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee or, if there be no such designee, to his estate.
8. Miscellaneous
-------------
8.1 Notice
------
All notices, elections, waivers and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the first page of this Agreement, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
8.2 No Waiver
---------
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and an officer of the Company. No waiver by either party at any
time of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
8.3 Enforceability
--------------
The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
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8.4 Disputes
--------
Notwithstanding the pendency of any dispute involving this Agreement, the
Company shall continue to pay all amounts and provide all benefits which the
Executive alleges are required by this Agreement (collectively the "Disputed
Benefits") until the dispute is finally resolved by agreement, litigation or
otherwise. If the dispute is resolved in the Company's favor, then the
person(s) resolving the dispute shall further determine (i) whether the
Executive initiated and continued the dispute in good faith and (ii) whether
there was a reasonable basis for the allegations made by the Executive. If it
is determined the Executive proceeded in good faith and with a reasonable basis
for his allegations, then the Executive shall not be required to reimburse the
Company for the Disputed Benefits received by him. Otherwise the Executive shall
be required (i) to fully reimburse the Company for the actual cost to the
Company of providing the Disputed Benefits and (ii) to pay the Company as
liquidated damages a lump sum cash payment equal to 20% of the Disputed
Benefits.
8.5 Sections; Captions
------------------
All references in this Agreement to Sections refer to the applicable
Sections of this Agreement. References in this Agreement to a given Section
(e.g. Section 3) shall, unless the context requires otherwise, refer to all
parts of such Section (e.g. 3.1 through 3.10).
The captions have been placed in this Agreement for ease of reference only.
They shall not be used in the interpretation of this Agreement.
8.6 Term of Agreement
-----------------
This Agreement shall continue in force so long as the Executive remains
employed by the Company or any successor and shall apply to any Change in
Control that occurs while the Executive remains so employed.
8.7 No Right of Offset
------------------
Effective upon the occurrence of a Change in Control, the Company waives,
and will not assert, any right to set off the amount of any claims, liabilities,
damages or losses the Company may have against any amounts payable by the
Company to the Executive whether under this Agreement or otherwise.
8.8 Successive Changes in Control
-----------------------------
A separate Change in Control shall be deemed to have occurred with each
occurrence of any event described at subsections (a) through (e) of Section 1.1.
This Agreement pertains to each and every Change in Control, including
successive Changes in Control involving the same controlling person(s).
15
<PAGE>
8.9 Interpretation of Agreement
---------------------------
In the event of any ambiguity, vagueness or other matter involving the
interpretation or meaning of this Agreement, this Agreement shall be liberally
construed so as to provide to the Executive the full benefits set out herein.
IN WITNESS WHEREOF, this Agreement has been signed as of the day and year
first above written.
LEGGETT & PLATT, INCORPORATED
Attest:
/s/ ERNEST C. JETT By /s/ MICHAEL A. GLAUBER
---------------------------------- ----------------------------------
Assistant Secretary Vice President
/s/ HARRY M. CORNELL, JR.
----------------------------------
Executive
16
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EXHIBIT 10.5
SEVERANCE BENEFIT AGREEMENT
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1. Change in Control; Employment Agreement.......................................... 1
1.1 Change in Control........................................................... 1
1.2 Employment Agreement........................................................ 2
2. Termination of Employment Following a Change in Control.......................... 3
2.1 General..................................................................... 3
2.2 Termination for Disability.................................................. 3
2.3 Termination by Company for "Cause".......................................... 3
2.4 Termination by Executive for Good Reason.................................... 4
2.5 Notice of Termination....................................................... 6
2.6 Date of Termination......................................................... 7
2.7 Prior Notice Required of Company Actions.................................... 7
3. Benefits upon Termination of Employment.......................................... 7
3.1 General..................................................................... 7
3.2 Base Salary Through Date of Termination; Previously Earned Bonus............ 8
3.3 Pro-Rata Bonus for Year of Termination...................................... 8
3.4 Monthly Severance Payments.................................................. 8
3.5 Fringe Benefits (General)................................................... 8
3.6 Retirement Plans............................................................ 9
3.7 Stock Options............................................................... 9
3.8 Purchase of Company Car.....................................................10
3.9 Job Search Assistance; Legal Fees; etc. ....................................10
3.10 Repurchase of Company Shares Owned by Executive.............................11
3.11 Termination Which Does Not Require Payment of Termination Benefits..........11
4. New Employment; Reduction of Termination Benefits................................11
5. Voluntary Termination of Employment By Executive.................................12
6. Termination of Employment Prior to Change in Control.............................13
7. Successor; Binding Agreement.....................................................13
8. Miscellaneous....................................................................14
8.1 Notice......................................................................14
8.2 No Waiver...................................................................14
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
8.3 Enforceability............................................................14
8.4 Disputes..................................................................14
8.5 Sections; Captions........................................................15
8.6 Term of Agreement.........................................................15
8.7 No Right of Offset........................................................15
8.8 Successive Changes in Control.............................................15
8.9 Interpretation of Agreement...............................................15
</TABLE>
ii
<PAGE>
SEVERANCE BENEFIT AGREEMENT
---------------------------
This Severance Benefit Agreement (the "Agreement") is made as of May 9,
1984 by Leggett & Platt, Incorporated, No. 1, Leggett Road, Carthage, Missouri
64836 (the "Company") and FELIX E. WRIGHT (the "Executive"), residing at Route
4, Carthage, Missouri 64836.
RECITALS
--------
The Executive functions as Executive Vice President and Chief Operating
Officer of the Company on the date hereof and is one of the key employees of the
Company.
The Company considers the maintenance of sound and vital management
essential to protecting and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that in today's
business environment the possibility of a change in control of the Company may
exist in the future. The Company further recognizes that such possibility, and
the uncertainty which it may raise among key executives, could result in the
departure or distraction of key executives to the detriment of the Company and
its shareholders. Accordingly, the Board of Directors of the Company (the
"Board") has determined that appropriate steps should be taken (i) to further
induce the Executive to remain with the Company and (ii) to reinforce and
encourage the continued attention and dedication of the Executive to his
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
Now, Therefore, in consideration of the premises and for other good and
valuable considerations, receipt of which are hereby acknowledged, the Company
and the Executive do agree as follows:
1. Change in Control; Employment Agreement
---------------------------------------
1.1 Change in Control
-----------------
The Company may be required to provide certain benefits to the
Executive under this Agreement following each and every "Change in Control" of
the Company.
A "Change in Control" of the Company shall be deemed to have
occurred if:
(a) There is any change in control as contemplated by (i) Item 5(f) of
Schedule 14A, Regulation 14A, promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or (ii) Item
1
1
<PAGE>
of Form 8-K promulgated by the Securities and Exchange Commission under
the Exchange Act; or
(b) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 25% or more
of the combined voting power of the Company's then outstanding voting
securities; or
(c) Those persons serving as directors of the Company on the date of this
Agreement (the "Original Directors") and/or their Successors do not
constitute a majority of the whole Board of Directors of the Company
(the term "Successors" shall mean those directors whose election or
nomination for election by the Company's shareholders has been approved
by the vote of at least two-thirds of the Original Directors and
previously qualified Successors serving as directors of the Company at
the time of such election or nomination for election); or
(d) The Company shall be a party to a merger or consolidation with another
corporation and as a result of such merger or consolidation, less than
75% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders
of the Company as the same shall have existed immediately prior to such
merger or consolidation; or
(e) The Company liquidates, sells or otherwise transfers all or
substantially all of its assets to a person not controlled by the
Company both immediately prior to and immediately after such sale.
1.2 Employment Agreement
--------------------
Any benefits provided to the Executive under this Agreement will unless
specifically stated otherwise in this Agreement be in addition to and not in
lieu of any benefits that may be provided the Executive under his employment
agreement with the Company dated May 1, 1981 (this agreement as previously,
herein or hereafter amended, restated or superseded is herein called the
"Employment Agreement").
Nothing in this Agreement is to be deemed to give the Company the right
to take any action or engage in any omission with respect to the Executive
(including Company Actions as defined in Section 2.4) at any time when any such
action or omission is not permissible and proper under the Employment Agreement
if then in force. Similarly, except as provided otherwise in this Agreement
(e.g. Section 2.4 and Section 5) nothing in this Agreement is to be deemed to
give the Executive the right to take any action or engage in any
2
<PAGE>
omission with respect to the Company at any time when any such act or omission
is not permissible and proper under the Employment Agreement if then in force.
This Agreement shall continue for the term provided in Section 8.6
and shall not be affected by any termination of the Employment Agreement.
2. Termination of Employment Following a Change in Control
-------------------------------------------------------
2.1 General
-------
During the 36 month period immediately following each and every
Change in Control (the "Protected Period"), the Executive and the Company shall
comply with all provisions of this Section 2 regarding termination of the
Executive's employment .
2.2 Termination for Disability
--------------------------
If the Employment Agreement is not in force, the Company may
terminate the Executive's employment for Disability. If the Employment Agreement
is in force the Company may terminate the Executive's employment for disability
only in accordance with the terms of the Employment Agreement. "Disability" as
used in this Agreement as distinguished from the Employment Agreement shall mean
the Executive's absence from, and his inability to substantially perform, his
duties with the Company for a continuous period of six or more months as a
result of physical causes or mental illness. During any period prior to the
termination of his employment that the Executive is absent from, and is unable
to substantially perform, his duties with the Company as a result of physical
causes or mental illness, the Company shall continue to pay the Executive his
full base salary at the rate then in effect and any bonuses earned by the
Executive under Company bonus plans until such time as the Executive's
employment is terminated by the Company for Disability. Following termination of
employment under this Section 2.2, the Executive's benefits shall be determined
in accordance with the Company's long term disability program as in effect on
the date hereof, or any successor program then in effect.
2.3 Termination by Company for "Cause"
----------------------------------
If the Employment Agreement is not in force the Company may
terminate the Executive for Cause as defined in this Agreement. If the
Employment Agreement is in force the Company may terminate the Executive for
Cause only in accordance with the terms of the Employment Agreement.
Termination for "Cause" under this Agreement as distinguished from
the Employment Agreement shall be limited to the following:
3
<PAGE>
(a) The Executive's conviction of any crime involving money or other
property of the Company or any of its subsidiaries or of any other
crime (whether or not involving the Company or any of its subsidiaries)
that constitutes a felony in the jurisdiction involved; or
(b) The Executive's continued, repeated, willful violations of specific
written directions of the Board or the Company's chief executive
officer, which directions are consistent with this Agreement and the
Executive's duties and do not constitute Company Action as defined in
Section 2.4 and which violations continue following the Executive's
receipt of such written directions; or
(c) The Executive's continued, repeated, willful failure to perform his
duties; provided, however, that no discharge shall be deemed for Cause
under this subsection (c) unless the Executive first receives written
notice from the Board or the Company's chief executive officer advising
the Executive of specific acts or omissions alleged to constitute a
failure to perform his duties, and such failure continues after the
Executive shall have had a reasonable opportunity to correct the acts
or omissions so complained of.
No act or failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that his action or omission was in the best interest
of the Company. Moreover, the Executive should not be terminated for Cause
unless and until there shall have been delivered to the Executive a notice of
termination duly adopted by the affirmative vote of at least three-quarters of
the entire membership of the Board at a meeting of the Board called and held for
the purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was guilty of the
conduct set forth in Section 2.3(a), (b) or (c) and specifying the particulars
thereof in detail.
A termination shall not be deemed for Cause if, for example, the
termination results from the Company's determination that the Executive's
position is redundant or unnecessary or that the Executive's performance is
unsatisfactory or if the termination stems from the Executive's refusal to agree
to or accept any Company Action described and defined in Section 2.4.
2.4 Termination by Executive for Good Reason
----------------------------------------
The Executive may, whether or not his Employment Agreement remains in
force, terminate his employment for "Good Reason" by giving notice of
termination to the Company following (i) any action or omission by the Company
described in this Section 2.4 or
4
<PAGE>
(ii) receipt of notice from the Company of the Company's intention to take any
such action or engage in any such omission. A termination of employment under
this Section 2.4 shall be deemed a valid and proper termination of the
Employment Agreement if then in force and to this extent the parties agree that
the Employment Agreement is hereby amended.
The actions or omissions which may lead to a termination of employment for
Good Reason (herein collectively and severally "Company Actions") are as
follows:
(a) A reduction by the Company in the Executive's base salary as in effect
on the date hereof or as the same may be increased from time to time or
a failure by the Company to increase the Executive's base salary each
year during the Protected Period by an amount which at least equals, on
a percentage basis, the average percentage increase in base salary for
all officers of the Company during the three full calendar years
immediately preceding the Change in Control; or
(b) A change in the Executive's reporting responsibilities, titles or
offices as in effect immediately prior to a Change in Control; or
(c) The assignment to the Executive of any positions, duties or
responsibilities inconsistent in the good faith opinion of the
Executive with the Executive's positions, duties and responsibilities
with the Company immediately prior to the Change in Control; or
(d) A failure by the Company (i) to continue any cash bonus or other
incentive plans substantially in the forms in effect immediately prior
to the Change in Control, or (ii) to continue the Executive as a
participant in such plans on at least the same basis as the Executive
participated in accordance with the plans immediately prior to the
Change in Control; or
(e) A requirement by the Company that the Executive be based or perform his
duties anywhere other than at the Company's Corporate Office location
immediately prior to the Change in Control, except for required travel
on the Company's business to an extent substantially consistent with
the Executive's business travel obligations immediately prior to the
Change in Control or, in the event the Executive consents to any
relocation, the failure by the Company to pay (or reimburse the
Executive for) all reasonable expenses incurred by him relating to a
change of his principal residence in connection with such relocation
and to indemnify the Executive against any loss realized on the sale of
his principal residence in connection with any such change of residence
(loss
5
<PAGE>
is defined as the difference between the actual sale price of such
residence and the higher of (i) the aggregate investment in such
residence (including improvements thereto) or (ii) the fair market
value of such as determined by a real estate appraiser designated by
the Executive and reasonably satisfactory to the Company); or
(f) A failure by the Company to continue in effect any benefit or other
compensation plan (e.g. stock ownership plan, stock purchase plan,
stock option plan, life insurance plan, health and accident plan or
disability plan) in which the Executive is participating at the time of
a Change in Control (or plans providing the Executive with
substantially similar benefits), the taking of any action by the
Company which would adversely affect the Executive's participation in
or materially reduce the Executive's benefits under any of such plans
or deprive the Executive of any material fringe benefit enjoyed by him
at the time of the Change in Control, or the Company's failure to
provide the Executive with the number of paid vacation days to which he
is entitled in accordance with the Company's normal vacation practices
with respect to the Executive at the time of the Change in Control; or
(g) A failure by the Company to obtain the assumption agreement to perform
this Agreement by any successor as contemplated by Section 7 of this
Agreement; or
(h) Any purported termination of the Executive's employment that is not
carried out (i) pursuant to a notice of termination which satisfies the
requirements of Section 2.5 or (ii) in accordance with Section 2.3, if
applicable; and for purposes of this Agreement, no such purported
termination shall be effective.
2.5 Notice of Termination
---------------------
Any purported termination by the Company of the Executive's employment
under Section 2.2 (Disability) or 2.3 (for Cause) or by the Executive under
Section 2.4 (for Good Reason) shall be communicated by notice of termination to
the other party. A notice of termination shall mean a notice which shall include
the specific termination Section in this Agreement relied upon and shall set
forth in reasonable detail, the facts and circumstances claimed to provide a
basis for termination of employment under the Section so indicated.
6
<PAGE>
2.6 Date of Termination
-------------------
The date the Executive's employment is terminated under this Agreement for
Disability, for Cause or for Good Reason is called the "Date of Termination." In
cases of Disability, the date of termination shall be 30 days after notice of
termination is given (provided that the Executive shall not have returned to the
performance of his duties on a full-time basis during such 30 day period). If
the Executive's employment is terminated for Cause, the Date of Termination
shall be the date specified in the notice of termination. If the Executive's
employment is terminated for Good Reason, the Date of Termination shall be the
date set out in the notice of termination.
Any dispute by a party hereto regarding a notice of termination delivered
to such party must be conveyed to the other party within 30 days after the
notice of termination is given. If the particulars of the dispute are not
conveyed within the 30 day period, then the disputing party's claims regarding
the termination shall be forever deemed waived.
2.7 Prior Notice Required of Company Actions
----------------------------------------
During the Protected Period, the Company shall not terminate the
Executive's employment (except for Disability or for Cause or pursuant to the
Employment Agreement) or take any Company Action as defined in Section 2.4
without first giving the Executive at least three months' prior notice of
termination or the planned Company Action, as the case may be.
3. Benefits upon Termination of Employment
---------------------------------------
3.1 General
-------
If, during the Protected Period following each Change in Control, the
Executive's employment is terminated either (i) by the Company (other than for
Disability or Cause under this Agreement and other than for disability or cause
under the Employment Agreement) or (ii) by the Executive for Good Reason, then
the Executive, at his election, shall be entitled to the benefits provided in
this Section 3 (collectively and severally "Termination Benefits"). If the
Executive elects to receive Termination Benefits under this Agreement then he
shall automatically forfeit his option, if any, under Section 9 of the
Employment Agreement to render consulting services to the Company on the terms
and conditions set out in the Employment Agreement and shall also automatically
forfeit his right to receive the compensations and benefits provided for in
Section 10 of the Employment Agreement.
7
<PAGE>
3.2 Base Salary Through Date of Termination; Previously Earned Bonus
----------------------------------------------------------------
The Company shall promptly pay the Executive his full base salary through
the Date of Termination at the rate in effect at the time notice of termination
is given. In addition, the Company shall promptly pay the amount of any bonus
for a past period which has been earned by the Executive but not yet paid under
the applicable bonus plan. The Company shall give the Executive credit for any
vacation earned but not taken.
3.3 Pro-Rata Bonus for Year of Termination
--------------------------------------
The Company shall pay the Executive a pro-rata bonus for the year in which
his employment terminates. The pro-rata bonus shall be equal to "A" divided by
"B" with the quotient multiplied by "C" where:
(a) "A" equals the number of days the Executive is employed by the Company
in the year in which the termination of employment occurs (the "Termination
Year");
(b) "B" equals 365; and
(c) "C" equals the maximum bonus the Executive would have been eligible for
in the Termination Year under Section 4.2 of his Employment Agreement or under
the Company's Executive and Key Man Incentive Compensation Plan (or successor
plans), whichever may be applicable.
The pro-rata bonus shall be paid by the Company in a lump sum, concurrently
with the first severance pay installment provided for in Section 3.4.
3.4 Monthly Severance Payments
--------------------------
The Company shall pay the Executive aggregate severance payments equal to
(i) 148% of the Executive's annual base salary as of the date of the Change in
Control or as of the Date of Termination, whichever is greater, multiplied by
(ii) three. The severance payments shall be made in 36 equal, consecutive
monthly installments, with the first installment to be on the first day of the
first month immediately following the Date of Termination. The 148% figure in
this Section shall be appropriately increased or decreased if and as the
Executive's maximum annual bonus potential (expressed as a percentage of his
annual base salary) is increased or decreased.
3.5 Fringe Benefits (General)
-------------------------
The Company shall maintain in full force, for the continued benefit of the
Executive for three years after the Date of Termination, all employee benefit
plans,
8
<PAGE>
programs and/or arrangements (collectively and severally "Benefit Plans") in
which the Executive was entitled to participate immediately prior to the Date of
Termination provided the Executive's continued participation is possible under
the general terms and provisions of such Benefit Plans. If the Executive's
participation in any such Benefit Plan is barred, the Company shall arrange to
provide the Executive with benefits substantially similar to those which the
Executive is entitled to receive under such Plans. At the end of the three year
period of coverage, the Executive shall have the option to have assigned to him
at no cost and with no apportionment of prepaid premiums, any assignable
insurance policy owned by the Company and relating specifically to the
Executive.
3.6 Retirement Plans
----------------
The Company shall pay the Executive in cash a lump sum additional
retirement benefit. Such benefit shall be paid at the Executive's normal
retirement age (or earlier retirement age should the Executive so elect) as
defined in the retirement programs in which the Executive participates or any
successor programs in effect on the date of any Change in Control. Such
additional benefit shall be equal to the actuarial equivalent of the additional
retirement benefit to which the Executive would have been entitled under such
retirement programs had he accumulated three additional years of continuous
service (following the Date of Termination) under such retirement programs both
for purposes of determining eligibility for benefits and for purposes of
calculating the amount of such benefits. If any retirement program requires
contributions by participants and the Executive is precluded by the terms of the
program from making such contributions following the Date of Termination, then
the amount of additional retirement benefit payable under this Section 3.6 shall
be equitably adjusted to reflect the absence of contributions by the Executive.
The benefits under this Section 3.6 are in addition to those the Executive
may be entitled to under the retirement programs in question. In addition, the
benefits provided under this Section 3.6 do not in any way limit the benefits
payable to the Executive under Section 3.5.
3.7 Stock Options
-------------
The Company shall at the request of the Executive accelerate and make
immediately exercisable in full all unexercised stock options which the
Executive then holds to acquire securities from the Company. This shall be
done, to the maximum extent possible, in a manner that will allow the Executive,
upon the exercise of any such options, to obtain favorable Federal Income tax
treatment. The Executive's request may be made at any time during the period
beginning with the giving of the notice of termination and ending three months
after the Executive's employment terminates (the "Option Election Period").
Instead of exercising any or all outstanding stock options then held by
him, the Executive may elect during the Option Exercise Period to surrender to
the Company
9
<PAGE>
his rights in such outstanding stock options (whether or not then exercisable).
Upon such surrender, the Company shall pay to the Executive an amount in cash
per optioned share equal to the difference between (i) the option price of such
share and (ii) the higher of: (x) the closing price of the Company's shares on
the date of the Change in Control, (y) the closing price of the Company's shares
on the date the options (or in the case of Section 3.10, the shares) are
surrendered to the Company, or (z) the highest price per Company share actually
paid in connection with any Change in Control of the Company.
If, within six months of the taking of any Company Action under Section
2.4, the Executive dies while still employed by the Company, the Executive's
estate shall be entitled, upon notice to the Company within 90 days of the
Executive's death, to be paid an amount equal to the amount the Executive would
have received had he surrendered all of his stock options under this Section as
of the date preceding his death. Such amount shall be paid in cash by the
Company within 45 days after receipt of the notice and the delivery of an
instrument surrendering all rights the Executive's estate may have held to the
stock options.
3.8 Purchase of Company Car
-----------------------
The Company shall permit the Executive during the Option Election Period to
purchase any Company automobile the Company was providing for the Executive's
use at the time notice of termination was given. The purchase price shall be
the book or wholesale value of such automobile at such time, whichever is lower.
3.9 Job Search Assistance; Legal Fees; etc.
---------------------------------------
The Company shall reimburse the Executive for the costs of his job search,
including air fares, telephone conversations, advertisements, executive
placement or search fees and the like to the extent not reimbursed by others.
In addition, the Company shall provide the Executive with adequate secretarial
assistance and office space while the Executive's job search continues. The
Company shall promptly reimburse the Executive for all relocation costs to the
extent such reimbursement is not made by the Executive's new employer. The
Company's obligations under this first paragraph of Section 3.9 shall terminate
three years from the Date of Termination.
The Company shall pay all relocation and indemnity payments as set forth in
Section 2.4(e), and all legal fees and expenses incurred by the Executive as a
result of the termination of his employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination of
employment or in seeking to obtain or enforce any right or benefit provided by
this Agreement).
10
<PAGE>
3.10 Repurchase of Company Shares Owned by Executive
-----------------------------------------------
Upon request made during the Option Election Period, the Company shall
purchase all Company shares owned by the Executive immediately prior to the Date
of Termination. Within 45 days after the request is made, the Executive's
shares properly endorsed and free of all claims shall be delivered to the
Company. Thereupon, the Company shall pay the purchase price in cash. The
purchase price shall be the highest price per share that can be computed under
Section 3.7.
3.11 Termination Which Does Not Require Payment of Termination Benefits
------------------------------------------------------------------
No Termination Benefits need be provided by the Company to the Executive
under this Section 3 if the Executive's employment is terminated:
(a) By his death; or
(b) By the Executive for any reason other than for Good Reason (e.g. by
retirement); or
(c) By the Company for Disability or for Cause under this Agreement or for
disability or cause under the Employment Agreement.
As used herein, retirement by the Executive means termination of employment
in accordance with the Company's normal retirement policy, including early
retirement, generally applicable to the Company's salaried employees or in
accordance with any special retirement arrangement jointly established by the
Company and the Executive and mutually agreeable to both.
4. New Employment; Reduction of Termination Benefits
-------------------------------------------------
The Termination Benefits provided under Section 3 shall not be treated as
damages, but rather shall be treated as severance compensation to which the
Executive is entitled. The Executive shall not be required to mitigate the
amount of any Termination Benefit provided under Section 3 by seeking other
employment or otherwise. If, however, following a termination of employment
which invokes Section 3, the Executive becomes employed full time by a third
party (as distinguished from becoming self-employed or being employed by an
employer controlled by the Executive and/or members of his immediate family),
then the amount of any cash compensation (including base salary and bonuses)
received by the Executive from such third party shall reduce on a dollar for
dollar basis, but not below zero, the amount of cash payments which the
Executive is thereafter entitled to receive under Section 3.4. In addition, any
fringe benefits that the Executive may receive from full time employment by a
third person (as distinguished from self-employment or employment by an employer
controlled by the Executive and/or members of his immediate family) shall be
11
<PAGE>
applied against and reduce any fringe benefits thereafter to be made available
to the Executive under Section 3.5. In no event shall the Executive be required
to return to the Company any Termination Benefits received by him prior to his
commencement of full time employment with a third person.
5. Voluntary Termination of Employment By Executive
------------------------------------------------
The Executive may voluntarily terminate his employment with the Company for
any reason (including retirement) within one year of any Change in Control
described in this Section. A termination of employment under this Section 5
shall be deemed a valid and proper termination of the Employment Agreement if
then in force and to this extent the parties agree that the Employment Agreement
is hereby amended. Upon any such termination of employment the Executive may in
his sole discretion elect to receive, and the Company shall provide, the
following benefits and no others under this under this Agreement:
(a) The Company shall promptly pay the Executive those salary, bonus and
vacation payments provided for in Section 3.2, which section is
incorporated by reference in this Section 5.
(b) The Company shall promptly pay the Executive the pro-rata bonus
provided for in Section 3.3, which section is incorporated by reference
in this Section 5.
(c) The Company shall promptly pay the Executive a non-forfeitable lump sum
cash termination payment equal to 75% of the Executive's total cash
compensation for the calendar year immediately preceding the Date of
Termination of his employment.
(d) The Company shall provide the Executive for one year with those fringe
benefits described in Section 3.5, which section is incorporated by
reference in this Section 5. The fringe benefits provided under this
subsection (d) shall be reduced by any fringe benefits the Executive
may thereafter receive from full time employment by a third person (as
distinguished from self-employment).
If the Executive does not elect to receive benefits under this Section 5,
then he shall remain eligible to receive Termination Benefits in accordance with
the provisions of Section 3.
The benefits payable to the Executive under this Section 5 are in addition
to all benefits provided to him under the Employment Agreement except as
provided in the next following sentence. If the Executive elects to receive
benefits under this Section 5 then he shall automatically forfeit his option, if
any, under Section 9 of the Employment Agreement to
12
<PAGE>
render consulting services to the Company on the terms and conditions set out in
the Employment Agreement and shall also automatically forfeit his right to
receive the compensations and benefits provided for in Section 10 of the
Employment Agreement.
The only Change in Control that will permit an Executive to make an
election under this Section 5 is a Change in Control that is opposed by a
majority vote of the Board and in connection with such Change in Control or as a
result thereof:
(a) A majority of the whole Board becomes comprised of persons other than
Original Directors or their Successors (as those terms are defined in
Section l(c)); or
(b) Any person (as defined in Section l(b)) becomes the beneficial owner
(as defined in Section l(b)); directly or indirectly of 50% or more of
the combined voting power of the Company's then outstanding voting
securities.
6. Termination of Employment Prior to Change in Control
----------------------------------------------------
Prior to a Change in Control and if there is no Employment Agreement in
force, the Executive shall not voluntarily terminate his employment with the
Company except upon at least three months' prior notice. Similarly, the Company
shall not terminate the Executive's employment other than for Cause except upon
at least three months' prior notice. If the Employment Agreement is in force,
termination of employment by the Executive or the Company shall be governed by
the terms thereof.
7. Successor; Binding Agreement
----------------------------
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place (the assumption
shall be by agreement in form and substance satisfactory to the Executive).
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive, at his election, to Termination Benefits from the Company in the same
amount and on the same terms as the Executive would be entitled to hereunder if
he terminated his employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such election becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
13
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This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee or, if there be no such designee, to his estate.
8. Miscellaneous
-------------
8.1 Notice
------
All notices, elections, waivers and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the first page of this Agreement, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
8.2 No Waiver
---------
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and an officer of the Company. No waiver by either party at any
time of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
8.3 Enforceability
--------------
The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
8.4 Disputes
--------
Notwithstanding the pendency of any dispute involving this Agreement, the
Company shall continue to pay all amounts and provide all benefits which the
Executive alleges are required by this Agreement (collectively the "Disputed
Benefits") until the dispute is finally resolved by agreement, litigation or
otherwise. If the dispute is resolved in the Company's favor, then the
person(s) resolving the dispute shall further determine (i) whether the
Executive initiated and continued the dispute in good faith and (ii) whether
there was a
14
<PAGE>
reasonable basis for the allegations made by the Executive. If it is determined
the Executive proceeded in good faith and with a reasonable basis for his
allegations, then the Executive shall not be required to reimburse the Company
for the Disputed Benefits received by him. Otherwise the Executive shall be
required (i) to fully reimburse the Company for the actual cost to the Company
of providing the Disputed Benefits and (ii) to pay the Company as liquidated
damages a lump sum cash payment equal to 20% of the Disputed Benefits.
8.5 Sections; Captions
------------------
All references in this Agreement to Sections refer to the applicable
Sections of this Agreement. References in this Agreement to a given Section
(e.g. Section 3) shall, unless the context requires otherwise, refer to all
parts of such Section (e.g. 3.1 through 3.10).
The captions have been placed in this Agreement for ease of reference only.
They shall not be used in the interpretation of this Agreement.
8.6 Term of Agreement
-----------------
This Agreement shall continue in force so long as the Executive remains
employed by the Company or any successor and shall apply to any Change in
Control that occurs while the Executive remains so employed.
8.7 No Right of Offset
------------------
Effective upon the occurrence of a Change in Control, the Company waives,
and will not assert, any right to set off the amount of any claims, liabilities,
damages or losses the Company may have against any amounts payable by the
Company to the Executive whether under this Agreement or otherwise.
8.8 Successive Changes in Control
-----------------------------
A separate Change in Control shall be deemed to have occurred with each
occurrence of any event described at subsections (a) through (e) of Section 1.1.
This Agreement pertains to each and every Change in Control, including
successive Changes in Control involving the same controlling person(s).
8.9 Interpretation of Agreement
---------------------------
In the event of any ambiguity, vagueness or other matter involving the
interpretation or meaning of this Agreement, this Agreement shall be liberally
construed so as to provide to the Executive the full benefits set out herein.
15
<PAGE>
IN WITNESS WHEREOF, this Agreement has been signed as of the day and year
first above written.
LEGGETT & PLATT, INCORPORATED
Attest:
/s/ ERNEST C. JETT By /s/ ROGER D. GLADDEN
--------------------------------- ----------------------------------
Assistant Secretary Vice President
/s/ FELIX E. WRIGHT
----------------------------------
Executive
16
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EXHIBIT 10.6
SEVERANCE BENEFIT AGREEMENT
TABLE OF CONTENTS
-----------------
PAGE
----
1. Change in Control........................................................ 1
2. Termination of Employment Following a Change in Control.................. 2
2.1 General............................................................ 2
2.2 Termination for Disability......................................... 2
2.3 Termination by Company for "Cause"................................. 3
2.4 Termination by Executive for Good Reason........................... 4
2.5 Notice of Termination.............................................. 5
2.6 Date of Termination................................................ 6
2.7 Prior Notice Required of Company Actions........................... 6
3. Benefits upon Termination of Employment.................................. 6
3.1 General............................................................ 6
3.2 Base Salary Through Date of Termination; Previously Earned Bonus... 6
3.3 Pro-Rata Bonus for Year of Termination............................. 7
3.4 Monthly Severance Payments......................................... 7
3.5 Fringe Benefits (General).......................................... 7
3.6 Retirement Plans................................................... 8
3.7 Stock Options...................................................... 8
3.8 Purchase of Company Car............................................ 9
3.9 Job Search Assistance; Legal Fees; etc............................. 9
3.10 Repurchase of Company Shares Owned by Executive.................... 9
3.11 Termination Which Does Not Require Payment of Termination Benefits. 9
4. New Employment; Reduction of Termination Benefits........................ 10
5. Voluntary Termination of Employment By Executive......................... 10
6. Termination of Employment Prior to Change in Control..................... 11
7. Successor; Binding Agreement............................................. 12
8. Miscellaneous............................................................ 12
8.1 Notice............................................................. 12
8.2 No Waiver.......................................................... 12
8.3 Enforceability..................................................... 13
i
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8.4 Disputes........................................................... 13
8.5 Sections; Captions................................................. 13
8.6 Term of Agreement.................................................. 13
8.7 No Right of Offset................................................. 13
8.8 Successive Changes in Control...................................... 14
8.9 Interpretation of Agreement........................................ 14
ii
<PAGE>
SEVERANCE BENEFIT AGREEMENT
---------------------------
This Severance Benefit Agreement (the "Agreement") is made as of May 9,
1984 by Leggett & Platt, Incorporated, No. 1, Leggett Road, Carthage, Missouri
64836 (the "Company") and ROBERT A. JEFFERIES, JR., residing at 1218 S. Maple,
Carthage, Missouri 64836 (the "Executive").
RECITALS
--------
The Executive functions as Vice President, General Counsel and Secretary of
the Company on the date hereof and is one of the key employees of the Company.
The Company considers the maintenance of sound and vital management
essential to protecting and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that in today's
business environment the possibility of a change in control of the Company may
exist in the future. The Company further recognizes that such possibility, and
the uncertainty which it may raise among key executives, could result in the
departure or distraction of key executives to the detriment of the Company and
its shareholders. Accordingly, the Board of Directors of the Company (the
"Board") has determined that appropriate steps should be taken (i) to further
induce the Executive to remain with the Company and (ii) to reinforce and
encourage the continued attention and dedication of the Executive to his
assigned duties without distraction in the face of potentially disturbing
circumstances arising from the possibility of a change in control of the
Company.
Now, Therefore, in consideration of the premises and for other good and
valuable considerations, receipt of which are hereby acknowledged, the Company
and the Executive do agree as follows:
1. Change in Control
-----------------
The Company may be required to provide certain benefits to the Executive
under this Agreement following each and every "Change in Control" of the
Company.
A "Change in Control" of the Company shall be deemed to have occurred if:
(a) There is any change in control as contemplated by (i) Item 5(f) of
Schedule 14A, Regulation 14A, promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") or (ii) Item 1 of Form 8-K
promulgated by the Securities and Exchange Commission under the
Exchange Act; or
1
<PAGE>
(b) Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of 25% or more
of the combined voting power of the Company's then outstanding voting
securities; or
(c) Those persons serving as directors of the Company on the date of this
Agreement (the "Original Directors") and/or their Successors do not
constitute a majority of the whole Board of Directors of the Company
(the term "Successors" shall mean those directors whose election or
nomination for election by the Company's shareholders has been approved
by the vote of at least two-thirds of the Original Directors and
previously qualified Successors serving as directors of the Company at
the time of such election or nomination for election); or
(d) The Company shall be a party to a merger or consolidation with another
corporation and as a result of such merger or consolidation, less than
75% of the outstanding voting securities of the surviving or resulting
corporation shall be owned in the aggregate by the former shareholders
of the Company as the same shall have existed immediately prior to such
merger or consolidation; or
(e) The Company liquidates, sells or otherwise transfers all or
substantially all of its assets to a person not controlled by the
Company both immediately prior to and immediately after such sale.
2. Termination of Employment Following a Change in Control
-------------------------------------------------------
2.1 General
-------
During the 36-month period immediately following each and every Change
in Control (the "Protected Period"), the Executive and the Company shall comply
with all provisions of this Section 2 regarding termination of the Executive's
employment.
2.2 Termination for Disability
--------------------------
The Company may terminate the Executive's employment for Disability.
"Disability" shall mean the Executive's absence from, and his inability to
substantially perform, his duties with the Company for a continuous period of
six or more months as a result of physical causes or mental illness. During any
period prior to the termination of his employment that the Executive is absent
from, and is unable to substantially perform, his duties with the Company as a
result of physical causes or mental illness, the Company shall continue to pay
the Executive his full base salary at the rate then in effect and any bonuses
2
<PAGE>
earned by the Executive under Company bonus plans until such time as the
Executive's employment is terminated by the Company for Disability. Following
termination of employment, the Executive's benefits shall be determined in
accordance with the Company's long term disability program as in effect on the
date hereof, or any successor program then in effect.
2.3 Termination by Company for "Cause"
----------------------------------
The Company may terminate the Executive for Cause.
Termination for "Cause" shall be limited to the following:
(a) The Executive's conviction of any crime involving money or other
property of the Company or any of its subsidiaries or of any other
crime (whether or not involving the Company or any of its subsidiaries)
that constitutes a felony in the jurisdiction involved; or
(b) The Executive's continued, repeated, willful violations of specific
written directions of the Board or the Company's chief executive
officer, which directions are consistent with this Agreement and the
Executive's duties and do not constitute Company Action as defined in
Section 2.4 and which violations continue following the Executive's
receipt of such written directions; or
(c) The Executive's continued, repeated, willful failure to perform his
duties; provided, however, that no discharge shall be deemed for Cause
under this subsection (c) unless the Executive first receives written
notice from the Board or the Company's chief executive officer advising
the Executive of specific acts or omissions alleged to constitute a
failure to perform his duties, and such failure continues after the
Executive shall have had a reasonable opportunity to correct the acts
or omissions so complained of.
No act or failure to act on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that his action or omission was in the best interest
of the Company. Moreover, the Executive should not be terminated for Cause
unless and until there shall have been delivered to the Executive a notice of
termination duly adopted by the affirmative vote of at least three-quarters of
the entire membership of the Board at a meeting of the Board called and held for
the purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with his counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was guilty of the
conduct set forth in Section 2.3(a), (b) or (c) and specifying the particulars
thereof in detail.
3
<PAGE>
A termination shall not be deemed for Cause if, for example, the
termination results from the Company's determination that the Executive's
position is redundant or unnecessary or that the Executive's performance is
unsatisfactory or if the termination stems from the Executive's refusal to agree
to or accept any Company Action described and defined in Section 2.4.
2.4 Termination by Executive for Good Reason
----------------------------------------
The Executive may terminate his employment for "Good Reason" by giving
notice of termination to the Company following (i) any action or omission by the
Company described in this Section 2.4 or (ii) receipt of notice from the Company
of the Company's intention to take any such action or engage in any such
omission. The actions or omissions which may lead to a termination of employment
for Good Reason (herein collectively and severally "Company Actions") are as
follows:
(a) A reduction by the Company in the Executive's base salary as in effect
on the date hereof or as the same may be increased from time to time or
a failure by the Company to increase the Executive's base salary each
year during the Protected Period by an amount which at least equals, on
a percentage basis, the average percentage increase in base salary for
all officers of the Company during the three full calendar years
immediately preceding the Change in Control; or
(b) A change in the Executive's reporting responsibilities, titles or
offices as in effect immediately prior to a Change in Control; or
(c) The assignment to the Executive of any positions, duties or
responsibilities inconsistent in the good faith opinion of the
Executive with the Executive's positions, duties and responsibilities
with the Company immediately prior to the Change in Control; or
(d) A failure by the Company (i) to continue any cash bonus or other
incentive plans substantially in the forms in effect immediately prior
to the Change in Control, or (ii) to continue the Executive as a
participant in such plans on at least the same basis as the Executive
participated in accordance with the plans immediately prior to the
Change in Control; or
(e) A requirement by the Company that the Executive be based or perform his
duties anywhere other than at the Company's Corporate Office location
immediately prior to the Change in Control, except for required travel
on the Company's business to an extent substantially consistent with
the Executive's business travel obligations immediately prior to the
4
<PAGE>
Change in Control or, in the event the Executive consents to any
relocation, the failure by the Company to pay (or reimburse the
Executive for) all reasonable expenses incurred by him relating to a
change of his principal residence in connection with such relocation
and to indemnify the Executive against any loss realized on the sale of
his principal residence in connection with any such change of residence
(loss is defined as the difference between the actual sale price of
such residence and the higher of (i) the aggregate investment in such
residence (including improvements thereto) or (ii) the fair market
value of such as determined by a real estate appraiser designated by
the Executive and reasonably satisfactory to the Company); or
(f) A failure by the Company to continue in effect any benefit or other
compensation plan (e.g. stock ownership plan, stock purchase plan,
stock option plan, life insurance plan, health and accident plan or
disability plan) in which the Executive is participating at the time of
a Change in Control (or plans providing the Executive with
substantially similar benefits), the taking of any action by the
Company which would adversely affect the Executive's participation in
or materially reduce the Executive's benefits under any of such plans
or deprive the Executive of any material fringe benefit enjoyed by him
at the time of the Change in Control, or the Company's failure to
provide the Executive with the number of paid vacation days to which he
is entitled in accordance with the Company's normal vacation practices
with respect to the Executive at the time of the Change in Control; or
(g) A failure by the Company to obtain the assumption agreement to perform
this Agreement by any successor as contemplated by Section 7 of this
Agreement; or
(h) Any purported termination of the Executive's employment that is not
carried out (i) pursuant to a notice of termination which satisfies the
requirements of Section 2.5 or (ii) in accordance with Section 2.3, if
applicable; and for purposes of this Agreement, no such purported
termination shall be effective.
2.5 Notice of Termination
---------------------
Any purported termination by the Company of the Executive's employment
under Section 2.2 (Disability) or 2.3 (for Cause) or by the Executive under
Section 2.4 (for Good Reason) shall be communicated by notice of termination to
the other party. A notice of termination shall mean a notice which shall include
the specific termination Section in this Agreement relied upon and shall set
forth in reasonable detail, the facts and
5
<PAGE>
circumstances claimed to provide a basis for termination of employment under the
Section so indicated.
2.6 Date of Termination
-------------------
The date the Executive's employment is terminated under this Agreement
for Disability, for Cause or for Good Reason is called the "Date of
Termination." In cases of Disability, the date of termination shall be 30 days
after notice of termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis during such 30
day period). If the Executive's employment is terminated for Cause, the Date of
Termination shall be the date specified in the notice of termination. If the
Executive's employment is terminated for Good Reason, the Date of Termination
shall be the date set out in the notice of termination.
Any dispute by a party hereto regarding a notice of termination
delivered to such party must be conveyed to the other party within 30 days after
the notice of termination is given. If the particulars of the dispute are not
conveyed within the 30 day period, then the disputing party's claims regarding
the termination shall be forever deemed waived.
2.7 Prior Notice Required of Company Actions
----------------------------------------
During the Protected Period, the Company shall not terminate the
Executive's employment (except for Disability or for Cause) or take any Company
Action as defined in Section 2.4 without first giving the Executive at least
three months' prior notice of termination or the planned Company Action, as the
case may be.
3. Benefits upon Termination of Employment
---------------------------------------
3.1 General
-------
If, during the Protected Period following each Change in Control, the
Executive's employment is terminated either (i) by the Company (other than for
Disability or Cause) or (ii) by the Executive for Good Reason, then the
Executive shall be entitled to the benefits provided in this Section 3
(collectively and severally "Termination Benefits").
3.2 Base Salary Through Date of Termination; Previously Earned Bonus
----------------------------------------------------------------
The Company shall promptly pay the Executive his full base salary through
the Date of Termination at the rate in effect at the time notice of termination
is given. In addition, the Company shall promptly pay the amount of any bonus
for a past period which has been earned by the Executive but not yet paid under
the applicable bonus plan. The Company shall give the Executive credit for any
vacation earned but not taken.
6
<PAGE>
3.3 Pro-Rata Bonus for Year of Termination
--------------------------------------
The Company shall pay the Executive a pro-rata bonus for the year in
which his employment terminates. The pro-rata bonus shall be equal to "A"
divided by "B" with the quotient multiplied by "C" where:
(a) "A" equals the number of days the Executive is employed by the Company
in the year in which the termination of employment occurs (the "Termination
Year");
(b) "B" equals 365; and
(c) "C" equals the maximum bonus the Executive would have been eligible for
in the Termination Year.
The pro-rata bonus shall be paid by the Company in a lump sum, concurrently
with the first severance pay installment provided for in Section 3.4.
3.4 Monthly Severance Payments
--------------------------
The Company shall pay the Executive aggregate severance payments equal
to (i) 136% of the Executive's annual base salary as of the date of the Change
in Control or as of the Date of Termination, whichever is greater, multiplied by
(ii) three. The severance payments shall be made in 36 equal, consecutive
monthly installments, with the first installment to be on the first day of the
first month immediately following the Date of Termination. The 136% figure in
this Section shall be appropriately increased or decreased if and as the
Executive's maximum annual bonus potential (expressed as a percentage of his
annual base salary) is increased or decreased.
3.5 Fringe Benefits (General)
-------------------------
The Company shall maintain in full force, for the continued benefit of
the Executive for three years after the Date of Termination, all employee
benefit plans, programs and/or arrangements (collectively and severally "Benefit
Plans") in which the Executive was entitled to participate immediately prior to
the Date of Termination provided the Executive's continued participation is
possible under the general terms and provisions of such Benefit Plans. If the
Executive's participation in any such Benefit Plan is barred, the Company shall
arrange to provide the Executive with benefits substantially similar to those
which the Executive is entitled to receive under such Plans. At the end of the
three year period of coverage, the Executive shall have the option to have
assigned to him at no cost and with no apportionment of prepaid premiums, any
assignable insurance policy owned by the Company and relating specifically to
the Executive.
7
<PAGE>
3.6 Retirement Plans
----------------
The Company shall pay the Executive in cash a lump sum additional
retirement benefit. Such benefit shall be paid at the Executive's normal
retirement age (or earlier retirement age should the Executive so elect) as
defined in the retirement programs in which the Executive participates or any
successor programs in effect on the date of any Change in Control. Such
additional benefit shall be equal to the actuarial equivalent of the additional
retirement benefit to which the Executive would have been entitled under such
retirement programs had he accumulated three additional years of continuous
service (following the Date of Termination) under such retirement programs both
for purposes of determining eligibility for benefits and for purposes of
calculating the amount of such benefits. If any retirement program requires
contributions by participants and the Executive is precluded by the terms of the
program from making such contributions following the Date of Termination, then
the amount of additional retirement benefit payable under this Section 3.6 shall
be equitably adjusted to reflect the absence of contributions by the Executive.
The benefits under this Section 3.6 are in addition to those the Executive
may be entitled to under the retirement programs in question. In addition, the
benefits provided under this Section 3.6 do not in any way limit the benefits
payable to the Executive under Section 3.5.
3.7 Stock Options
-------------
The Company shall at the request of the Executive accelerate and make
immediately exercisable in full all unexercised stock options which the
Executive then holds to acquire securities from the Company. This shall be
done, to the maximum extent possible, in a manner that will allow the Executive,
upon the exercise of any such options, to obtain favorable Federal Income tax
treatment. The Executive's request may be made at any time during the period
beginning with the giving of the notice of termination and ending three months
after the Executive's employment terminates (the "Option Election Period").
Instead of exercising any or all outstanding stock options then held by
him, the Executive may elect during the Option Exercise Period to surrender to
the Company his rights in such outstanding stock options (whether or not then
exercisable). Upon such surrender, the Company shall pay to the Executive an
amount in cash per optioned share equal to the difference between (i) the option
price of such share and (ii) the higher of: (x) the closing price of the
Company's shares on the date of the Change in Control, (y) the closing price of
the Company's shares on the date the options (or in the case of Section 3.10,
the shares) are surrendered to the Company, or (z) the highest price per Company
share actually paid in connection with any Change in Control of the Company.
If, within six months of the taking of any Company Action under Section
2.4, the Executive dies while still employed by the Company, the Executive's
estate shall be
8
<PAGE>
entitled, upon notice to the Company within 90 days of the Executive's death, to
be paid an amount equal to the amount the Executive would have received had he
surrendered all of his stock options under this Section as of the date preceding
his death. Such amount shall be paid in cash by the Company within 45 days
after receipt of the notice and the delivery of an instrument surrendering all
rights the Executive's estate may have held to the stock options.
3.8 Purchase of Company Car
-----------------------
The Company shall permit the Executive during the Option Election Period to
purchase any Company automobile the Company was providing for the Executive's
use at the time notice of termination was given. The purchase price shall be
the book or wholesale value of such automobile at such time, whichever is lower.
3.9 Job Search Assistance; Legal Fees; etc.
---------------------------------------
The Company shall reimburse the Executive for the costs of his job search,
including air fares, telephone conversations, advertisements, executive
placement or search fees and the like to the extent not reimbursed by others.
In addition, the Company shall provide the Executive with adequate secretarial
assistance and office space while the Executive's job search continues. The
Company shall promptly reimburse the Executive for all relocation costs to the
extent such reimbursement is not made by the Executive's new employer. The
Company's obligations under this first paragraph of Section 3.9 shall terminate
three years from the Date of Termination.
The Company shall pay all relocation and indemnity payments as set forth in
Section 2.4(e), and all legal fees and expenses incurred by the Executive as a
result of the termination of his employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination of
employment or in seeking to obtain or enforce any right or benefit provided by
this Agreement).
3.10 Repurchase of Company Shares Owned by Executive
-----------------------------------------------
Upon request made during the Option Election Period, the Company shall
purchase all Company shares owned by the Executive immediately prior to the Date
of Termination. Within 45 days after the request is made, the Executive's
shares properly endorsed and free of all claims shall be delivered to the
Company. Thereupon, the Company shall pay the purchase price in cash. The
purchase price shall be the highest price per share that can be computed under
Section 3.7.
3.11 Termination Which Does Not Require Payment of Termination Benefits
------------------------------------------------------------------
No Termination Benefits need be provided by the Company to the Executive
under this Section 3 if the Executive's employment is terminated:
9
<PAGE>
(a) By his death; or
(b) By the Executive for any reason other than for Good Reason (e.g. by
retirement); or
(c) By the Company for Disability or for Cause.
As used herein, retirement by the Executive means termination of employment
in accordance with the Company's normal retirement policy, including early
retirement, generally applicable to the Company's salaried employees or in
accordance with any special retirement arrangement jointly established by the
Company and the Executive and mutually agreeable to both.
4. New Employment; Reduction of Termination Benefits
-------------------------------------------------
The Termination Benefits provided under Section 3 shall not be treated as
damages, but rather shall be treated as severance compensation to which the
Executive is entitled. The Executive shall not be required to mitigate the
amount of any Termination Benefit provided under Section 3 by seeking other
employment or otherwise. If, however, following a termination of employment
which invokes Section 3, the Executive becomes employed full time by a third
party (as distinguished from becoming self-employed or being employed by an
employer controlled by the Executive and/or members of his immediate family),
then the amount of any cash compensation (including base salary and bonuses)
received by the Executive from such third party shall reduce on a dollar for
dollar basis, but not below zero, the amount of cash payments which the
Executive is thereafter entitled to receive under Section 3.4. In addition, any
fringe benefits that the Executive may receive from full time employment by a
third person (as distinguished from self-employment or employment by an employer
controlled by the Executive and/or members of his immediate family) shall be
applied against and reduce any fringe benefits thereafter to be made available
to the Executive under Section 3.5. In no event shall the Executive be required
to return to the Company any Termination Benefits received by him prior to his
commencement of full time employment with a third person.
5. Voluntary Termination of Employment By Executive
------------------------------------------------
If the Executive voluntarily terminates his employment with the Company for
any reason (including retirement) within one year of any Change in Control
described in this Section, then the Executive may in his sole discretion elect
to receive, and the Company shall provide, the following benefits and no others
under this under this Agreement:
(a) The Company shall promptly pay the Executive those salary, bonus and
vacation payments provided for in Section 3.2, which section is
incorporated by reference in this Section 5.
10
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(b) The Company shall promptly pay the Executive the pro-rata bonus
provided for in Section 3.3, which section is incorporated by reference
in this Section 5.
(c) The Company shall promptly pay the Executive a non-forfeitable lump sum
cash termination payment equal to 75% of the Executive's total cash
compensation for the calendar year immediately preceding the Date of
Termination of his employment.
(d) The Company shall provide the Executive for one year with those fringe
benefits described in Section 3.5, which section is incorporated by
reference in this Section 5. The fringe benefits provided under this
subsection (d) shall be reduced by any fringe benefits the Executive
may thereafter receive from full time employment by a third person (as
distinguished from self-employment).
If the Executive does not elect to receive benefits under this Section 5,
then he shall remain eligible to receive Termination Benefits in accordance with
the provisions of Section 3.
The only Change in Control that will permit an Executive to make an
election under this Section 5 is a Change in Control that is opposed by a
majority vote of the Board and in connection with such Change in Control or as a
result thereof:
(a) A majority of the whole Board becomes comprised of persons other than
Original Directors or their Successors (as those terms are defined in
Section l(c)); or
(b) Any person (as defined in Section l(b)) becomes the beneficial owner
(as defined in Section l(b)); directly or indirectly of 50% or more of
the combined voting power of the Company's then outstanding voting
securities.
6. Termination of Employment Prior to Change in Control
----------------------------------------------------
Prior to a Change in Control, the Executive shall not voluntarily terminate
his employment with the Company except upon at least three months' prior notice.
Similarly, the Company shall not terminate the Executive's employment other than
for Cause except upon at least three months' prior notice.
11
<PAGE>
7. Successor; Binding Agreement
----------------------------
The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place (the assumption
shall be by agreement in form and substance satisfactory to the Executive).
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle the
Executive, at his election, to Termination Benefits from the Company in the same
amount and on the same terms as the Executive would be entitled to hereunder if
he terminated his employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such election becomes
effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Section 7 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to his devisee, legatee or other
designee or, if there be no such designee, to his estate.
8. Miscellaneous
-------------
8.1 Notice
------
All notices, elections, waivers and all other communications provided for
in this Agreement shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified mail, return receipt
requested, postage prepaid, addressed to the respective addresses set forth on
the first page of this Agreement, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
8.2 No Waiver
---------
No provisions of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and an officer of the Company. No waiver by either party at any
time of any breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or
12
<PAGE>
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
8.3 Enforceability
--------------
The invalidity or unenforceability of any provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
8.4 Disputes
--------
Notwithstanding the pendency of any dispute involving this Agreement, the
Company shall continue to pay all amounts and provide all benefits which the
Executive alleges are required by this Agreement (collectively the "Disputed
Benefits") until the dispute is finally resolved by agreement, litigation or
otherwise. If the dispute is resolved in the Company's favor, then the
person(s) resolving the dispute shall further determine (i) whether the
Executive initiated and continued the dispute in good faith and (ii) whether
there was a reasonable basis for the allegations made by the Executive. If it
is determined the Executive proceeded in good faith and with a reasonable basis
for his allegations, then the Executive shall not be required to reimburse the
Company for the Disputed Benefits received by him. Otherwise the Executive shall
be required (i) to fully reimburse the Company for the actual cost to the
Company of providing the Disputed Benefits and (ii) to pay the Company as
liquidated damages a lump sum cash payment equal to 20% of the Disputed
Benefits.
8.5 Sections; Captions
------------------
All references in this Agreement to Sections refer to the applicable
Sections of this Agreement. References in this Agreement to a given Section
(e.g. Section 3) shall, unless the context requires otherwise, refer to all
parts of such Section (e.g. 3.1 through 3.10).
The captions have been placed in this Agreement for ease of reference only.
They shall not be used in the interpretation of this Agreement.
8.6 Term of Agreement
-----------------
This Agreement shall continue in force so long as the Executive remains
employed by the Company or any successor and shall apply to any Change in
Control that occurs while the Executive remains so employed.
8.7 No Right of Offset
------------------
Effective upon the occurrence of a Change in Control, the Company waives,
and will not assert, any right to set off the amount of any claims, liabilities,
damages
13
<PAGE>
or losses the Company may have against any amounts payable by the Company to the
Executive whether under this Agreement or otherwise.
8.8 Successive Changes in Control
-----------------------------
A separate Change in Control shall be deemed to have occurred with each
occurrence of any event described at subsections (a) through (e) of Section 1.
This Agreement pertains to each and every Change in Control, including
successive Changes in Control involving the same controlling person(s).
8.9 Interpretation of Agreement
---------------------------
In the event of any ambiguity, vagueness or other matter involving the
interpretation or meaning of this Agreement, this Agreement shall be liberally
construed so as to provide to the Executive the full benefits set out herein.
IN WITNESS WHEREOF, this Agreement has been signed as of the day and year
first above written.
Attest: LEGGETT & PLATT, INCORPORATED
/s/ ERNEST C. JETT By /s/ HARRY M. CORNELL, JR.
------------------------- -------------------------------
Secretary President
/s/ ROBERT A. JEFFERIES, JR.
-------------------------------
Executive
14
<PAGE>
EXHIBIT 10.14
STOCK AWARD AGREEMENT
---------------------
FELIX E. WRIGHT
Leggett & Platt, Incorporated (the "Company") and Felix E. Wright (the
"Participant") agree as of July 5, 1994 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to Participant
upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning July 8, 1994 and
ending December 23, 1994.
Each bi-weekly Basic Stock Award and Incentive Bonus will be in whole
(not fractional) Shares having a fair market value on the date the Award is made
that is as close as possible to $3,950.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1995 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1994 or has
terminated his employment before December 31, 1994 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1994
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
-1-
<PAGE>
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock
Awards received by Participant (with such fair market value being determined as
of the date that each Basic Stock Award is made).
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
-------------------------------------------------------
______ Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld from all
------ cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "Participant's Investments." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during the
period of this Agreement shall not be less than 2% nor more than 10% of
Participant's gross cash compensation for the calendar year 1993. All cash
transmitted will be invested by the Company in the same manner as cash dividends
from Company Shares and thereupon shall constitute and remain a portion of
Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock shall normally be issued in the name of the Participant only. However, if
the Participant so
-2-
<PAGE>
requests, certificates will be issued (i) in the name of the Participant and the
Participant's spouse as tenants by the entirety, or (ii) in the name of the
Participant and any other person designated by the Participant as joint tenants
with right of survivorship. Any such issuance will be in accordance with such
guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
-3-
<PAGE>
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employment by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within sixty (60) days following the Participant's termination of employment.
The above option applies only to a Participant (a) who is under age 60 when his
employment terminates, (b) who has been employed by an Employer for less than 5
continuous years when his employment terminates and (c) whose employment is
terminated for a reason other than permanent and total disability or death. For
purposes of determining a Participant's length of employment, employment with an
Employer prior to the time that it became an Employer shall be disregarded.
Without, in any way, limiting the provisions of Section 8, in order to
facilitate the Company's exercise of the foregoing option, the Participant
shall, as a condition to receiving an Award, execute such stock and other
assignments and other documents of transfer as the Committee shall request at
any time. Notwithstanding the foregoing,
-4-
<PAGE>
the decision as to whether to exercise the option granted by this Section 13
shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ FELIX E. WRIGHT By: /s/ R. A. JEFFERIES, JR.
------------------------------------- -------------------------------------
Participant Senior Vice President
-5-
<PAGE>
EXHIBIT 10.15
STOCK AWARD AGREEMENT
---------------------
DUANE W. POTTER
Leggett & Platt, Incorporated (the "Company") and Duane W. Potter (the
"Participant") agree as of July 5, 1994 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to Participant
upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning July 8, 1994 and
ending December 23, 1994.
Each bi-weekly Basic Stock Award and Incentive Bonus will be in whole
(not fractional) Shares having a fair market value on the date the Award is made
that is as close as possible to $1,196.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1995 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1994 or has
terminated his employment before December 31, 1994 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1994
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
-1-
<PAGE>
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock
Awards received by Participant (with such fair market value being determined as
of the date that each Basic Stock Award is made).
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
-------------------------------------------------------
_______ Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld from
------- all cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "Participant's Investments." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during the
period of this Agreement shall not be less than 2% nor more than 10% of
Participant's gross cash compensation for the calendar year 1993. All cash
transmitted will be invested by the Company in the same manner as cash dividends
from Company Shares and thereupon shall constitute and remain a portion of
Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock shall normally be issued in the name of the Participant only. However, if
the Participant so
-2-
<PAGE>
requests, certificates will be issued (i) in the name of the Participant and the
Participant's spouse as tenants by the entirety, or (ii) in the name of the
Participant and any other person designated by the Participant as joint tenants
with right of survivorship. Any such issuance will be in accordance with such
guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
-3-
<PAGE>
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employment by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within sixty (60) days following the Participant's termination of employment.
The above option applies only to a Participant (a) who is under age 60 when his
employment terminates, (b) who has been employed by an Employer for less than 5
continuous years when his employment terminates and (c) whose employment is
terminated for a reason other than permanent and total disability or death. For
purposes of determining a Participant's length of employment, employment with an
Employer prior to the time that it became an Employer shall be disregarded.
Without, in any way, limiting the provisions of Section 8, in order to
facilitate the Company's exercise of the foregoing option, the Participant
shall, as a condition to receiving an Award, execute such stock and other
assignments and other documents of transfer as the Committee shall request at
any time. Notwithstanding the foregoing,
-4-
<PAGE>
the decision as to whether to exercise the option granted by this Section 13
shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ DUANE W. POTTER By: /s/ R. A. JEFFERIES, JR.
------------------------------------- -------------------------------------
Participant Senior Vice President
-5-
<PAGE>
EXHIBIT 10.16
STOCK AWARD AGREEMENT
---------------------
DAVID S. HAFFNER
Leggett & Platt, Incorporated (the "Company") and David S. Haffner (the
"Participant") agree as of July 5, 1994 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to Participant
upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning July 8, 1994 and
ending December 23, 1994.
Each bi-weekly Basic Stock Award and Incentive Bonus will be in whole
(not fractional) Shares having a fair market value on the date the Award is made
that is as close as possible to $1,450.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1995 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1994 or has
terminated his employment before December 31, 1994 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1994
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
-1-
<PAGE>
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock
Awards received by Participant (with such fair market value being determined as
of the date that each Basic Stock Award is made).
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
-------------------------------------------------------
______ Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld from all
______ cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "Participant's Investments." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during the
period of this Agreement shall not be less than 2% nor more than 10% of
Participant's gross cash compensation for the calendar year 1993. All cash
transmitted will be invested by the Company in the same manner as cash dividends
from Company Shares and thereupon shall constitute and remain a portion of
Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock shall normally be issued in the name of the Participant only. However, if
the Participant so
-2-
<PAGE>
requests, certificates will be issued (i) in the name of the Participant and the
Participant's spouse as tenants by the entirety, or (ii) in the name of the
Participant and any other person designated by the Participant as joint tenants
with right of survivorship. Any such issuance will be in accordance with such
guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
-3-
<PAGE>
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employment by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within sixty (60) days following the Participant's termination of employment.
The above option applies only to a Participant (a) who is under age 60 when his
employment terminates, (b) who has been employed by an Employer for less than 5
continuous years when his employment terminates and (c) whose employment is
terminated for a reason other than permanent and total disability or death. For
purposes of determining a Participant's length of employment, employment with an
Employer prior to the time that it became an Employer shall be disregarded.
Without, in any way, limiting the provisions of Section 8, in order to
facilitate the Company's exercise of the foregoing option, the Participant
shall, as a condition to receiving an Award, execute such stock and other
assignments and other documents of transfer as the Committee shall request at
any time. Notwithstanding the foregoing,
-4-
<PAGE>
the decision as to whether to exercise the option granted by this Section 13
shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ DAVID S. HAFFNER By: /s/ R. A. JEFFERIES, JR.
------------------------------------- ------------------------------------
Participant Senior Vice President
-5-
<PAGE>
EXHIBIT 10.17
STOCK AWARD AGREEMENT
Leggett & Platt, Incorporated (the "Company") and Harry M. Cornell, Jr.
(the "Participant") agree as of December 20, 1994 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company ("Shares")
granted to or acquired by Participant under or pursuant to this Agreement is
subject to the Plan. A copy of the Plan is available to Participant upon
request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of Common
Stock of the Company, such awards to be made beginning January 6, 1995 and
ending December 22, 1995.
On or before March 31, 1995, the Committee will grant a one-time Basic
Stock Award to Participant providing Participant remains a full-time executive
of an Employer on that date.
Each bi-weekly Basic Stock Award and the one-time Basic Stock Award
will be in whole (not fractional) Shares having a fair market value on the date
the Award is made that is as close as possible to 7.35% of each installment of
Participant's pay, including Participant's incentive bonus. The parties to this
Agreement agree that the immediately preceding percentages may be adjusted
upward or downward as necessary by the Company to reflect any changes in
federal, state or local tax rates.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1996 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1995 or has
terminated his employment before December 31, 1995 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1995
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award.
-1-
<PAGE>
The Additional Stock Award will be in whole (not fractional) Shares having a
fair market value on the date the Award is made that is as close as possible to
the product of "X" and "Y" where:
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock Awards
received by Participant during calendar year 1995. The fair market value of
each Basic Stock Award shall be determined as of the date such Award is made.
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
------------------------------------------------------
________ Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld from
-------- all cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "Participant's Investments." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being under
any obligation to do so, may transmit cash to the Company (bi-weekly by payroll
deduction or in lump sum amounts). Any such cash transmitted during the period
of this Agreement shall not be less than 1% nor more than 10% of Participant's
gross cash compensation for the calendar year 1994. All cash transmitted will be
invested by the Company in the same manner as cash dividends from Company Shares
and thereupon shall constitute and remain a portion of Participant's
Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock shall normally be issued in the name of the Participant only. However, if
the Participant so requests,
-2-
<PAGE>
certificates will be issued (i) in the name of the Participant and the
Participant's spouse as tenants by the entirety, or (ii) in the name of the
Participant and any other person designated by the Participant as joint tenants
with right of survivorship. Any such issuance will be in accordance with such
guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Participant may also transfer Common Stock to a revocable trust
providing the terms of such trust meets the requirements set forth in Section 21
of the Company's Executive Stock Purchase Program.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERRABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
In addition, Participant may not sell or otherwise dispose of any
shares of Common Stock awarded under this Agreement unless the shares have been
held for at least six months after the date of the Award.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates which have been held for at least six months from the date that
they were awarded. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The Committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
-3-
<PAGE>
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employed by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within 60 days following the Participant's termination of employment. The above
option applies only to a Participant (a) who is under age 60 when his employment
terminates, (b) who has been employed by an Employer for less than 5 continuous
years when his employment terminates and (c) whose employment is terminated for
a reason other than permanent and total disability or death. For purposes of
determining a Participant's length of employment, employment with an Employer
prior to the time that it became an Employer shall be disregarded. Without, in
any way, limiting the provisions of Section 8, in order to facilitate
-4-
<PAGE>
the Company's exercise of the foregoing option, the Participant shall, as a
condition to receiving an Award, execute such stock and other assignments and
other documents of transfer as the Committee shall request at any time.
Notwithstanding the foregoing, the decision as to whether to exercise the option
granted by this Section 13 shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ HARRY M. CORNELL, JR. By: /s/ R. A. JEFFERIES, JR.
--------------------------- -------------------------
Participant Senior Vice President
-5-
<PAGE>
EXHIBIT 10.18
DEFERRED COMPENSATION PROGRAM
The Company has implemented a program through which certain managers,
including the Company's executive officers, may elect to forego future cash
compensation such as salary and bonus. When an election to forego future cash
compensation is made the manager receives from the Company either a market rate-
based interest bearing obligation of the Company to pay cash to the manager in
the future or an option to purchase shares of the Company's common stock, $.01
par value (the "Common Stock"). Stock options are granted under the Company's
1989 Flexible Stock Plan, as amended. The formula used to determine the number
of shares subject to the options is (i) the cash compensation foregone divided
by (ii) the current market value of one share of Common Stock minus $1.00. This
quotient is then multiplied by 1.176.
The option price under the stock options is $1.00 per share. The options
have a term of fifteen years from the grant date and become exercisable at the
later of (i) six months after grant or (ii) when they would otherwise be
entitled to receive the cash compensation. The options are not transferable.
<PAGE>
EXHIBIT 11
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
COMPUTATIONS OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
(Amounts in millions, except per share data)
Year Ended December 31,
--------------------------
1994 1993 1992
------ ----- -----
<S> <C> <C> <C>
EARNINGS PER SHARE
Weighted average number of common shares outstanding................. 41.0 40.1 39.1
Dilution from outstanding stock options--computed using the
"treasury stock" method............................................ .6 .7 .5
Dilution from shares issuable under contingent earnout agreement..... - .3 .2
------ ----- -----
Weighted average number of common shares outstanding as adjusted..... 41.6 41.1 39.8
====== ===== =====
Net Earnings......................................................... $115.4 $85.9 $65.4
====== ===== =====
Earnings Per Share................................................... $ 2.78 $2.09 $1.64
====== ===== =====
</TABLE>
<PAGE>
EXHIBIT 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
<TABLE>
<CAPTION>
Name of State of Percentage of
Organization Incorporation Voting Interest
------------ -------------- ---------------
<S> <C> <C>
AAA WIRE PRODUCTS, INC. Texas 100%
BERKSHIRE FURNITURE CO., INC. Delaware 100%
BOIS AISE DE ROBERVAL INC. Canada 100%
BOIS J.L.P. INC. Canada 100%
COLLIER-KEYWORTH, INC. North Carolina 100%
CREST-FOAM CORP. New Jersey 100%
CREST-HOOD FOAM COMPANY, INC. Delaware 100%
DRESHER, INC. Delaware 100%
GRIBETZ INTERNATIONAL, INC. Delaware 100%
GRIBETZ THREADS, INC. Florida 100%
HANES COMPANIES FOUNDATION North Carolina 100%
HANES COMPANIES, INC. North Carolina 100%
HANES CONVERTING COMPANY
OF NEW YORK, INC. North Carolina 100%
L&P ACQUISITION COMPANY - 7 Delaware 100%
L&P ACQUISITION COMPANY - 8 Delaware 100%
L&P ACQUISITION COMPANY - 10 Delaware 100%
L&P ACQUISITION COMPANY - 12 Delaware 100%
L&P ACQUISITION COMPANY - 14 Delaware 100%
L&P ACQUISITION COMPANY - 15 Delaware 100%
L&P AUTOMOTIVE EUROPE GMBH Germany 100%
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Name of State of Percentage of
Organization Incorporation Voting Interest
------------ -------------- ---------------
<S> <C> <C>
L&P INTERNATIONAL HOLDINGS
COMPANY Delaware 100%
L AND P MEXICO, S.A. DE C.V. Mexico 100%
L&P NETHERLANDS HOLDINGS B.V. The Netherlands 100%
L&P PROPERTY MANAGEMENT
COMPANY Illinois 100%
L&P TRANSPORTATION CO. Delaware 100%
L&P WESTERN SPRING CO. Delaware 100%
LEGGETT & PLATT CANADA LTD. Canada 100%
LEGGETT & PLATT FOREIGN SALES
CORPORATION West Indies 100%
LEGGETT AND PLATT INTERNATIONAL
CORPORATION Missouri 100%
LEGGETT & PLATT INTERNATIONAL
DEVELOPMENT CO. Delaware 100%
LEGGETT & PLATT INTERNATIONAL
SERVICE CORPORATION Delaware 100%
LEGGETT & PLATT U.K. LIMITED United Kingdom 100%
LEGGETT WIRE COMPANY Delaware 100%
MG LOAN COMPANY Delaware 100%
MASTERBLEND, INC. Mississippi 100%
MULTILASTIC LIMITED United Kingdom 100%
NO-SAG SPRING COMPANY, LIMITED Canada 100%
NORTHFIELD METAL PRODUCTS (1994)
LTD./PRODUITS METAUX
NORTHFIELD (1994) LTEE Canada 100%
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Name of State of Percentage of
Organization Incorporation Voting Interest
------------ -------------- ---------------
<S> <C> <C>
PULLMAFLEX A.B. (SWEDEN) Sweden 100%
PULLMAFLEX BENELUX N.V. Belgium 100%
PULLMAFLEX ESPANOLA Spain 100%
PULLMAFLEX INTERNATIONAL B.V.
(NETHERLANDS) Holland 100%
PULLMAFLEX INTERNATIONAL
LIMITED England 100%
PULLMAFLEX JAPAN KK Japan 100%
PULLMAFLEX U.K. LIMITED England 100%
SOUTHEASTERN MANUFACTURING
CO., INC. Florida 100%
STEINER-LIFF TEXTILE PRODUCTS, CO. Delaware 100%
STYLELANDER METAL STAMPING, INC. Mississippi 100%
SUPER SAGLESS, INC. Delaware 100%
SUPLOM LTD. Switzerland 100%
TI, INC. Missouri 100%
TALBOT INDUSTRIES, INC. Missouri 100%
WBSCO, INC. New Mexico 100%
WEBER PLASTICS CO. LTD. Canada 100%
YOUNG SPRING & WIRE COMPANY Delaware 100%
YOUNGFLEX A.G. Switzerland 100%
</TABLE>
3
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in the Registration
Statements of Leggett & Platt, Incorporated, listed below, of our report dated
February 14, 1995 appearing on page 30 of Leggett & Platt, Incorporated's Annual
Report on Form 10-K for the year ended December 31, 1994. We also consent to
the incorproation by reference of our report on the Financial Statement
Schedules, which is included in this Form 10-K.
1. Post-Effective Amendment No. 1 to Form S-8, Registration No. 33-15441,
filed August 29, 1989.
2. Form S-8, Registration No. 33-44224, filed November 27, 1991.
3. Form S-8, Registration No. 33-45334, filed January 27, 1992.
4. Form S-8, Registration No. 33-45335, filed January 27, 1992.
5. Form S-8, Registration No. 33-45336, filed January 27, 1992.
6. Form S-8, Registration No. 33-67910, filed August 26, 1993.
7. Form S-8, Registration No. 33-54339, filed June 28, 1994.
8. Post-Effective Amendment No. 1 to Form S-3, Registration No. 33-55413,
filed September 23, 1994.
9. Form S-3, Registration No. 33-55725, filed September 30, 1994.
10. Form S-3, Registration No. 33-56111, filed October 25, 1994.
11. Form S-3, Registration No. 33-56919, filed December 16, 1994.
PRICE WATERHOUSE LLP
/S/ PRICE WATERHOUSE LLP
St. Louis, Missouri
March 28, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors of
LEGGETT & PLATT, INCORPORATED, a Missouri corporation (the "Corporation"), does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr., and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to sign in the name of and on behalf of the
undersigned directors of the Corporation and to file with the Securities &
Exchange Commission ("SEC") the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and any other documents or further
Amendments to said Annual Report, and to take such other action, all as said
attorneys-in-fact, or any one of them, deem necessary or advisable to the end
that such Annual Report or amendments thereto in respect of same, shall comply
with the Securities Exchange Act of 1934, as amended, and the applicable rules
of the SEC thereunder; and does hereby ratify and confirm all that said
attorneys-in-fact, and each of them, may do by virtue hereof.
Additionally, each of the undersigned directors of the Corporation does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr. and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to, from time to time, sign in the name of
and on behalf of the undersigned directors of the Corporation and to file with
the SEC Registration Statements with respect to the Corporation's common stock,
$.01 par value, and the Preferred Stock Purchase Rights attached to and trading
with such Common Stock to be sold in secondary offerings by shareholders of the
Company and any other documents or further Amendments or Post-Effective
Amendments to such Registration Statements and to take such other action, all as
said attorneys-in-fact, or any one of them, deem necessary or advisable and does
hereby ratify and confirm all that said attorneys-in-fact, and each of them, may
do by virtue hereof.
Additionally, each of the undersigned directors of the Corporation does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr. and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to, from time to time, sign in the name of
and on behalf of the undersigned directors of the Corporation and file with the
SEC Registration Statements with respect to securities (including the
Corporation's common stock, $.01 par value, and the Preferred Stock Purchase
Rights attached to and trading with such Common Stock) to be sold pursuant to
the Corporation's Restated Employee Stock Purchase/Stock Bonus Plan, 1989
Discount Stock Plan, 1989 Flexible Stock Plan, Directors Stock Option Plan and
any other employee benefit plans of the Corporation adopted or approved during
calendar year 1995 and any other documents or further Amendments or Post-
Effective Amendments to such Registration Statements (or any previous
registration statements filed as respects any of the above-mentioned plans) and
to take such other action, all as said attorneys-in-fact, or any one of them,
deem necessary or advisable and does hereby ratify and confirm all that said
attorneys-in-fact, and each of them, may do by virtue hereof.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FOR THE
FINANCIAL STATEMENTS OF LEGGETT & PLATT, INCORPORATED FOR THE YEAR ENDED
DECEMBER 31, 1994 (COMMISSION FILE NUMBER 1-7845) AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 2,700,000
<SECURITIES> 0
<RECEIVABLES> 252,800,000
<ALLOWANCES> 7,500,000
<INVENTORY> 255,500,000
<CURRENT-ASSETS> 544,700,000
<PP&E> 699,500,000
<DEPRECIATION> 303,500,000
<TOTAL-ASSETS> 1,119,900,000
<CURRENT-LIABILITIES> 232,900,000
<BONDS> 204,900,000
<COMMON> 400,000
0
0
<OTHER-SE> 624,800,000
<TOTAL-LIABILITY-AND-EQUITY> 1,119,900,000
<SALES> 1,858,100,000
<TOTAL-REVENUES> 1,858,100,000
<CGS> 1,429,100,000
<TOTAL-COSTS> 1,429,100,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,800,000
<INCOME-PRETAX> 189,500,000
<INCOME-TAX> 74,100,000
<INCOME-CONTINUING> 115,400,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 115,400,000
<EPS-PRIMARY> 2.78
<EPS-DILUTED> 0
</TABLE>
