<PAGE>
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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
For the fiscal year ended December 31, 1998
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 on
Title of Each Class Which Registered
------------------- ------------------------
<S> <C>
Common Stock, $.01 par value New York Stock Exchange
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 $3,989,690,000 on March 10, 1999.
There were 197,803,977 shares of the Registrant's common stock outstanding
as of March 10, 1999.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held May 12, 1999, are incorporated by reference
into Part III of this report.
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<PAGE>
PART I
Item 1. Business.
The Company is a manufacturer of a wide range of engineered products. It
was incorporated in 1901 as the successor to a partnership formed in 1883 at
Carthage, Missouri. That partnership was a pioneer in the development of steel
coil bedsprings. The Company today serves markets for:
. Residential Furnishings - components for bedding, furniture and other
residential furnishings and related consumer products.
. Commercial Furnishings - office and institutional furnishings components,
retail store fixtures, displays and other commercial furnishings products
and systems.
. Aluminum Products - die castings, custom tooling and dies, machining,
coating and other value added processes and aluminum raw materials.
. Industrial Materials - drawn wire, specialty wire products and welded steel
tubing.
. Specialized Products - automotive seating suspension, lumbar support and
control cable systems, specialized machinery and manufacturing equipment.
The term "Company," unless the context requires otherwise, refers to
Leggett & Platt, Incorporated and its majority owned subsidiaries.
General Development of Business. In 1998 the Company acquired seventeen
businesses with aggregate annualized sales of approximately $300 million. Three
additional businesses were acquired in the first two months of 1999. Eight
businesses producing residential furnishings were acquired by the Company in
1998 and the first two months of 1999 with annualized sales of approximately
$140 million. Over the same period, the Company acquired five companies
producing commercial furnishings which also have annualized sales of
approximately $140 million. During this same period, three businesses were
acquired producing aluminum products with annualized sales of approximately $35
million, one business producing industrial materials was acquired with
approximately $25 million in annualized sales and three businesses producing
specialized products were acquired with annualized sales of approximately $30
million.
Reference is also made to Note C of the Notes to Consolidated Financial
Statements for further information about the Company's acquisitions.
Residential Furnishings. The Company's residential furnishings products
include a broad line of components used by manufacturers to make finished
bedding and residential furniture products. Examples of residential furnishings
components manufactured by the Company include (i) innerspring and boxspring
units for mattresses and boxsprings; (ii) foam, textile, fiber,
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non-woven fabrics and other cushioning materials for bedding, furniture and
industrial applications; (iii) springs and seating suspensions for chairs, sofas
and other residential furniture; (iv) steel mechanisms and hardware for
reclining chairs, sleeper sofas and other types of motion furniture; and (v)
other furniture supplies.
The Company also manufactures or distributes finished residential
furnishings. These finished products include bed frames; daybeds; bunk beds;
headboards; adjustable electric beds; fashion beds, carpet underlay and non-slip
products.
Most of the Company's customers for residential furnishings manufacture
finished bedding (mattresses and boxsprings) or upholstered and non-upholstered
furniture for residential use. Finished residential furnishings are sold to
bedding and furniture manufacturers for resale or directly to retailers.
The Company's diverse range of components gives its residential furnishings
manufacturer-customers access to a single source for most of their component
needs. For example, a manufacturer of bedding can come to the Company for
almost every component part of a mattress and boxspring, except the upholstering
material. This same principle holds true for manufacturers of other residential
furnishings such as upholstered recliner chairs, sofas and loveseats. Because
the Company has the advantage of long production runs and numerous production
and assembly locations, it can generally produce component products more
efficiently than its customers. Therefore, components customers can focus on
the design, style and marketing of their various residential furnishings
products, rather than the production of components.
Commercial Furnishings. The Company manufactures a number of
commercial furnishings products, including both finished products and
components.
Finished commercial furnishings include point of purchase displays, store
fixtures and shelving, racking, counters and carts used to store and handle
materials. Point of purchase displays and store fixtures, made of wood, metal,
wire and plastics, are used by customers including a wide variety of branded
product manufacturers, distributors and retailers to display merchandise. The
Company has the ability to provide custom designed full store fixture packages
as well as more generic shelving used by large retailers, grocery stores,
discount chains and the like. Commercial storage products provide for the
efficient storage, organization and handling of materials used in food handling,
health care and other applications. Customers for these products include
restaurants, hospitals, and other businesses which have storage and handling
needs.
Commercial furnishings components include chair controls (devices which
allow office chairs to be adjusted as to height, tilt and swivel), chair bases,
columns, backrests, casters and other components used by customers which
manufacture office, institutional and other commercial furnishings.
Aluminum Products. The Company is engaged in die casting component
parts used by a number of different industries. The die castings are primarily
aluminum. Some zinc die castings are also produced.
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The Company's die casting products are sold in a diverse group of
industrial and consumer markets. Examples of significant aluminum product types
include components of outdoor gas barbecue grills; outdoor lighting fixtures;
cable and telecommunication products, covers, housings and other items used by
computer and electronics manufacturers; end shields and other components used in
the construction of electric motors; various components of consumer appliances
such as waffle grids and blender bases; components of power tools; clean room
flooring tiles; and parts for motorcycles, snowmobiles, ATVs, trucks and
automobiles. The Company's larger customers for aluminum products include those
manufacturing gas barbecue grills, electric motors, outdoor lights, cable line
amplifiers, wireless communication systems, electronic devices, automobiles,
motorcycles, trucks and outdoor furnishings products. The business of the
Company's gas barbecue grill customers is somewhat seasonal with the bulk of
shipments to these customers normally occurring during the first two quarters of
the year.
The Company also manufactures and refurbishes dies (also known as
molds or tools) for all types and sizes of die casting machines. These dies are
sold to the Company's customers for die castings and others.
In addition, the Company operates two smelting locations where
aluminum ingot and other forms of raw aluminum are produced from aluminum scrap.
This aluminum is used by the Company's die casting operations and sold to
unaffiliated customers.
Industrial Materials. The Company produces drawn steel wire and steel
tubing as well as certain finished wire products. Drawn wire and tubing are
important raw materials used widely in manufacturing the Company's products.
Wire is used to make innersprings and box springs for the Company's bedding
customers, different types of springs and seating constructions used by the
Company's residential furniture manufacturer-customers, finished commercial
furnishings products such as racks and displays and automotive products.
Steel tubing is used in many of the Company's products including
motion furniture mechanisms, displays, shelving and storage products, and
finished residential furnishings.
In addition to supplying the Company's needs for these materials, the
Company sells drawn wire and tubing products to a diverse group of industrial
customers such as manufacturers of automobiles, yard and garden equipment,
recreational equipment, construction related products, mechanical springs and
other formed wire consumer products.
Finished wire products using wire drawn by the Company include wire
ties used to secure cotton bales and baling wire used to bale waste materials.
Customers for these products include cotton gins, textile companies, recyclers
and waste removal concerns. The Company also manufactures and sells tying heads
of various types which tie wire used to secure baled material in various
applications.
Specialized Products. Two smaller business units are engaged in
manufacturing products for the automotive industry and manufacturing machinery
used primarily by bedding manufacturers. In the automotive area the Company
manufactures seating suspension, lumbar support and control cable systems. In
the machinery area the Company manufactures machinery
3
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that quilts fabrics used to cover mattresses and other furniture, coilers used
to fabricate springs of various types, sewing machines specifically designed for
the assembly of bedding, material handling systems and other related products.
Subcontractors to automobile manufacturers as well as the manufacturers
themselves are the primary customers for the Company's automotive products.
Manufacturers of bedding are the primary customers for the Company's machinery.
The Company's products are sold and distributed primarily through its own
sales personnel.
Reference is made to Note K of the Notes to Consolidated Financial
Statements for further information concerning sales of each of the Company's
business segments.
Foreign Operations. Foreign sales are a small portion of the Company's
business. However, foreign sales are growing and the Company is cautiously
proceeding to expand in foreign locations where opportunities present
themselves.
The Company has several operations in Canada producing primarily components
used by manufacturers of residential bedding and furniture as well as commercial
furnishings. The Company's international operations outside Canada are
primarily located in Europe and Mexico and involve (i) the sale of machinery and
equipment designed to manufacture the Company's innersprings, certain other
spring products and bedding and other products manufactured by the Company's
customers, (ii) the licensing of patents owned and presently maintained by the
Company in foreign countries, (iii) aluminum die casting, and (iv) the
production of seating components, wire innersprings and boxspring units.
Reference is made to Note K of the Notes to Consolidated Financial
Statements for further information concerning the Company's operations outside
of the United States.
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, woven and nonwoven fabrics,
aluminum ingot, aluminum scrap, angle iron, coil and sheet steel, dimension
lumber, textile scrap, foam chemicals, foam scrap, and plastic. 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.
Examples of products produced using steel wire include residential furnishings
such as innersprings and box springs, commercial furnishings such as displays,
shelving and racks and automotive seating systems. 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 from scrap aluminum. 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. Examples of the Company's more significant
trademarks include SEMI-FLEX(TM), LOK-Fast(TM) and DYNA-Lock(TM) (boxspring
components and foundations); Mira-Coil(R) and Lura-
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Flex(TM) (mattress innersprings); Nova-Bond(R) and Flexnet(TM) (insulators for
mattresses); ADJUSTA-MAGIC (adjustable electric beds); Wallhugger(R) and Hi-
Style(TM) (recliner chairs); SUPER SAGLESS(R) (motion and sofa sleeper
mechanisms) and No-Sag(R) (sinuous wire).
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 because 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 $12 million in 1998, $10 million in 1997 and $9 million in 1996.
Employees. The Company has approximately 27,000 employees of whom
approximately 21,000 are engaged in production. Approximately 28% 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 1998. Management is not aware of any
circumstances which are likely to result in a material work stoppage related to
the negotiations of any contracts expiring during 1999.
One of the Company's subsidiaries is involved in an unfair labor complaint
filed by the National Labor Relations Board prior to the Company's acquisition
of the subsidiary. An administrative decision has been rendered against the
subsidiary, which has been upheld by the courts. The Company is currently
pursuing actions to resolve this matter.
Competition. There are many companies offering products which compete with
those manufactured and sold by the Company. The markets for the Company's
products are highly competitive in all aspects. Given the diverse range of
components and other products produced by the Company, the number of the
companies competing with respect to any class or type of product varies over
the Company's product range. There are also a number of maker-users (vertically
integrated manufacturers) of many of the products the Company manufactures. The
primary competitive factors in the Company's business include price, product
quality and customer service.
To the best of the Company's knowledge, it is the largest supplier in the
United States of a diverse range of components to the residential furnishings
industry.
Backlog. The Company's relationship with its customers and its
manufacturing and inventory practices do not provide for the traditional backlog
associated with some manufacturing entities and no backlog data is regularly
prepared or used by management.
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
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consolidated financial condition or results of operations of the Company.
Item 2. Properties.
The Company's most important physical properties are its manufacturing
plants. Facilities manufacturing, assembling or distributing residential
furnishings products are located in approximately thirty states as well as
Canada, Europe, Asia and Mexico. Commercial furnishings manufacturing plants and
distribution facilities are located in California, Colorado, Florida, Georgia,
Illinois, Indiana, Michigan, Missouri, North Carolina, Ontario, Texas, Wisconsin
and the United Kingdom. Fifteen die casting facilities are located in Arkansas,
California, Massachusetts, Minnesota, Missouri, Pennsylvania, Tennessee,
Washington, Wisconsin and Mexico, three die and tooling production facilities in
Alabama, Minnesota and Missouri and two smelting operations in Alabama.
Industrial Materials are produced at six wire drawing mills and three welded
steel tubing mills. Automotive products and machinery are produced in facilities
in the United States and Europe.
Most of the Company's major manufacturing plants are owned by the Company.
The Company also conducts certain 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 G 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. These properties are located to allow quick and
efficient deliveries and necessary service to the Company's diverse customer
base.
Item 3. Legal Proceedings.
The Company is a defendant in various workers' compensation, product
liability, vehicle accident, employment, intellectual property, labor practices
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 in the ordinary course of
business.
The Company is party to a small number of proceedings in which a
governmental authority is a party and which involve laws 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.
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Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable.
PART II
Item 5. Market For the Registrant's Common Equity and Related Shareholder
Matters.
STOCK MARKET AND OWNERSHIP DATA
The Company's common stock is listed on the New York and Pacific stock
exchanges with the trading symbol LEG. The table below highlights quarterly and
annual stock market information for the last two years.
<TABLE>
<CAPTION>
Price Range Volume of
------------------- Shares Dividend
High Low Traded Declared
------- ------- ----------- --------
1998:
<S> <C> <C> <C> <C>
Fourth Quarter ........ $25.125 $16.875 16,458,000 $.08
Third Quarter ......... 28.750 19.063 14,293,900 .08
Second Quarter ........ 28.344 24.688 20,038,900 .08
First Quarter ......... 27.938 20.438 20,547,400 .075
------ ------ ---------- ----
For the Year .......... $28.750 $16.875 71,338,200 $.315
======= ======= ========== =====
1997:
Fourth Quarter ........ $22.282 $19.250 14,870,000 $.07
Third Quarter ......... 23.875 20.875 16,259,800 .07
Second Quarter ........ 21.500 16.125 11,769,000 .065
First Quarter ......... 18.688 15.750 15,622,600 .065
------- ------- ---------- ----
For the Year .......... $23.875 $15.750 58,521,400 $.27
======= ======= ========== ====
</TABLE>
____________________
Price and volume data reflect composite transactions and prices as reported
daily by The Wall Street Journal.
Restatements have been made to reflect a two-for-one stock split
distributed on June 15, 1998.
The Company had 14,879 shareholders of record on March 10, 1999.
During the fourth quarter of 1998 the Company issued no shares of its
common stock in transactions which qualified for exemption from registration
under the Securities Act by virtue of Regulation D and Section 4(2) of the
Securities Act.
Item 6. Selected Financial Data.
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SELECTED FINANCIAL DATA
Selected Financial Data
Leggett & Platt, Incorporated and Subsidiaries
(Unaudited)
(Dollar amounts in millions, except per share data)
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Summary of Operations
Net sales $3,370.4 $2,909.2 $2,466.2 $2,256.9 $2,009.1
Earnings from continuing operations 248.0 208.3 153.0 134.3 119.5
Earnings per share from continuing operations
Basic 1.25 1.09 .84 .76 .69
Diluted 1.24 1.08 .83 .75 .68
Cash dividends declared per share .315 .27 .23 .19 .155
======== ======== ======== ======== ========
Summary of Financial Position
Total assets $2,535.3 $2,106.3 $1,712.9 $1,478.1 $1,327.0
Long-term debt 574.1 466.2 388.5 380.6 364.1
======== ======== ======== ======== ========
</TABLE>
Merger related costs of $16.4 after-tax, or $.09 per basic and diluted share are
included in 1996 earnings from continuing operations. Previously reported per
share data have been restated to reflect a two-for-one stock split distributed
on June 15, 1998.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Previously reported share and per share amounts have been restated for a
June 15, 1998 two-for-one stock split.
Capital Resources and Liquidity
The Company's financial position reflects management's capital policy
guidelines. These guidelines are intended to ensure that corporate liquidity is
adequate to support the Company's projected growth rate. Also, liquidity is
necessary so that financing of the Company's ongoing operations will be adequate
in periods of economic adversity. In a normal operating environment, management
intends to direct capital to strategic acquisitions and other investments that
provide opportunities for expansion and enhanced profitability.
The expansion of capital resources -- debt and equity -- is planned to
allow the Company to take advantage of favorable capital market conditions,
rather than respond to short-term needs. Such financial flexibility is
considered more important than short-term maximization of earnings per share
through excessive leverage. Therefore, management continuously provides for
available credit in excess of near-term 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%.
Total Capitalization
The following table shows the Company's total capitalization at the end of
the three most recent years. Also, the table shows the amount of unused
committed credit available through the Company's revolving bank credit
agreements and the amount of cash and cash equivalents at the end of the three
most recent years.
<TABLE>
<CAPTION>
(Dollar amounts in millions) 1998 1997 1996
-------- -------- --------
Long-term debt outstanding:
<S> <C> <C> <C>
Scheduled maturities.................................. $ 574.1 $ 402.9 $ 332.4
Average interest rates.............................. 6.6% 6.8% 7.7%
Average maturities in years......................... 6.2 6.6 7.0
Revolving credit/commercial paper..................... -- 63.3 56.1
-------- -------- --------
Total long-term debt................................ 574.1 466.2 388.5
Deferred income taxes and other liabilities........... 123.0 93.6 90.5
Shareholders' equity.................................. 1,436.8 1,174.0 941.1
-------- -------- --------
Total capitalization................................ $2,133.9 $1,733.8 $1,420.1
======== ======== ========
Unused committed credit................................ $ 300.0 $ 240.0 $ 215.0
======== ======== ========
Cash and cash equivalents.............................. $ 83.5 $ 7.7 $ 3.7
======== ======== ========
</TABLE>
Cash provided by operating activities was $354.9 million, $288.3 million
and $238.1 million for 1998, 1997 and 1996, respectively, or a three year total
of $881.3 million. The increase in cash provided by operating activities
principally reflects earnings improvements.
Long-term debt outstanding was 26.9% of total capitalization at the end of
1998 and 1997 and 27.4% at the end of 1996. As shown in the table above,
obligations having scheduled maturities are the base "layer" of the Company's
debt capital. At the end of 1998, these obligations consisted primarily of the
Company's privately placed medium-term notes and tax-exempt industrial
development bonds. In the first and second quarters of 1998, the Company issued
a total of $176 million in medium-term notes. Proceeds from the notes were used
to repay commercial paper outstanding and to provide financing for future growth
at favorable rates. A portion of the financing for future growth is temporarily
held in cash and cash equivalents at December 31, 1998. In the second quarter of
1998, the Company's senior debt rating was upgraded to single A+ from single A
by Standard & Poor's.
In the second quarter of 1997, the Company issued $100 million of medium-
term notes to repay commercial paper outstanding. In June 1996, the Company also
issued $100 million in medium-term notes. Proceeds from these notes provided a
majority of the funds required to redeem, at 113% of par value, all of the Pace
Holdings, Inc. (Pace) publicly owned senior notes that were to mature in almost
seven years and had fixed interest rates of 10.625%. Funds required to refinance
the balance of the senior notes and Pace's revolving credit initially were
provided through the Company's revolving credit/commercial paper arrangements.
In August 1996, the Company issued $25 million in medium-term notes to repay a
portion of revolving credit/commercial paper outstanding.
The second "layer" of the Company's debt capital consists of revolving bank
credit agreements and commercial paper issuances. Management has negotiated bank
credit agreements and established commercial paper programs to continuously
support 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 available for short-term
borrowings and repayments. At the end of 1998, the Company had no revolving
credit or commercial paper outstanding. Additional details of long-term debt,
including scheduled maturities, revolving credit and commercial paper are
discussed in Note F of the Notes to Consolidated Financial Statements.
Uses of Capital Resources
The Company's internal investments to modernize and expand manufacturing
capacity totaled $363.2 million in the last three years. In 1999, management
anticipates internal investments will approximate $155 million. During the last
three years, the Company employed $378.4 million in cash (net of cash acquired)
and issued 24.5 million shares of common stock in acquisitions, including 10.3
million shares in 1996 to acquire Pace. During 1998, seventeen businesses were
acquired for $117.1 million in cash (net of cash acquired) and 2.9 million
shares of common stock. About one-half of the 1998 acquisition investments (cash
and stock) were made in the Commercial Furnishings segment. Additional details
of acquisitions are discussed in Note C of the Notes to Consolidated Financial
Statements. Additions, by segment, to property, plant and equipment and
purchases of long-lived assets are shown in Note K of the Notes to Consolidated
Financial Statements.
Company purchases of its common stock totaled $13.5 million in 1998, $5.7
million in 1997, and $10.1 million in 1996. These purchases were made primarily
for employee stock plans, to replace shares issued in purchase acquisitions and
to satisfy contractual obligations. In 1998, the Company's Board of Directors
authorized management, at its discretion, to buy up to 500,000 shares of Leggett
stock for use in employee benefit plans. The authorization is continuously
replenished as shares acquired are reissued for these benefit plans. In
addition, management is authorized, again at its discretion, to repurchase any
shares issued in acquisitions accounted for as purchases.
Cash dividends on the Company's common stock in the last three years
totaled $138.2 million.
Future commitments under lease obligations are described in Note G and
contingencies are discussed in Note L of the Notes to Consolidated Financial
Statements.
Short-term Liquidity
Working capital increased $324.2 million in the last three years. To gain
additional flexibility in capital management and to improve the 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.
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Working capital turnover (excluding cash
and cash equivalents)........................... 5.5x 5.6x 5.7x
Trade receivables turnover....................... 7.2 7.5 7.8
Inventory turnover............................... 5.4 5.4 5.2
</TABLE>
No segment's working capital requirements vary significantly from the
consolidated ratios, except Aluminum Products. Aluminum Products' receivables
turnover is lower than the other segments due principally to the seasonal nature
of its gas barbecue grill business.
Results of Operations
Discussion of Consolidated Results
The results of operations during the last three years reflect various
elements of the Company's long-term growth strategy, along with general economic
trends and the specific market conditions. The Company's growth strategy
continues to include internal initiatives 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 technologies, the Company is able to consistently
offer high quality products, competitively priced.
Trends in the general economy were very favorable during the last three
years. In each year, acquisitions accounted for more of the Company's sales
growth than other factors. The balance of the Company's sales growth during this
period primarily reflected increases in unit volumes. Aluminum prices decreased
in 1998 and during the latter part of 1998, certain product lines in Residential
Furnishings and Industrial Materials were experiencing selling price declines.
Residential Furnishings accounted for 39.7% of the 1998 increase in consolidated
sales, and Commercial Furnishings accounted for 34.4% of the 1998 increase. In
1997, Residential Furnishings accounted for 42.7% of the consolidated sales
increase over 1996 and Commercial Furnishings accounted for 26.3% of the
increase.
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.
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Gross profit margin.............................. 25.9% 25.4% 25.3%
EBIT (Earnings before interest and taxes)
margin
- - before non-recurring items.................... 12.7 12.5 12.3
- - after non-recurring items..................... 12.7 12.5 11.3
Net profit margin
- - before non-recurring items.................... 7.4 7.2 6.9
- - after non-recurring items..................... 7.4 7.2 5.7
Effective income tax rate........................ 37.3 37.5 38.7
Interest coverage ratio.......................... 11.3x 11.5x 9.3x
</TABLE>
The Company's gross profit margins improved in each of the last two years.
The increase in 1998 reflected several favorable factors. These included
continued increases in production efficiencies, increased sales of products with
above average margins, lower material and other costs and better manufacturing
overhead absorption. The EBIT margin also increased due to these factors, offset
somewhat by higher selling costs in acquired companies as a percentage of sales.
The slight increase in the 1997 gross profit and EBIT margins versus 1996,
primarily reflected the Company's continuing sales growth in products with above
average margins, increased production efficiencies and better manufacturing
overhead absorption. The segment results discussion below identifies specific
reasons by segment for changes in margins. Other factors, including a more
favorable distribution of income, resulted in a lower effective income tax rate
in 1997 compared to the prior year, improving net profit margin.
In 1996, non-recurring costs were associated with the Pace acquisition
(Aluminum Products segment) and are discussed in Note C of the Notes to
Consolidated Financial Statements.
Discussion of Segment Results
A description of the products included in each segment, segment sales,
segment earnings before interest and taxes (EBIT) and other segment data appear
in Note K of the Notes to Consolidated Financial Statements. Following is a
comparison of EBIT margins (Segment EBIT divided by Total Segment Sales):
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Residential Furnishings 11.1% 10.8% 10.9%
Commercial Furnishings 17.8% 18.4% 18.7%
Aluminum Products 6.5% 10.1% 8.7%
Industrial Materials 11.7% 9.9% 9.5%
Specialized Products 11.5% 11.2% 8.4%
</TABLE>
Residential Furnishings sales increased 11.6% in 1998, principally from
acquisitions, although volume growth was also a significant factor. EBIT
increased 15.6% in 1998 versus 1997, and EBIT margin increased slightly as
higher volume improved operating efficiencies and raw material costs were lower.
For 1997, Residential Furnishings sales were up 13.3% due primarily to
acquisitions. EBIT improved in 1997 by 11.6%, while EBIT margin declined
slightly. Integration of certain bedding components' acquisitions had a negative
impact on 1997 EBIT margin.
Commercial Furnishings sales in 1998 increased 34.5% over the prior year
due primarily to acquisition activity. EBIT improved 30.2% in 1998, but EBIT
margin declined due to product mix and the fact that the Company has not yet
fully realized the integration benefits of the substantial acquisition activity
in this segment. In 1997, Commercial Furnishings sales improved 33.4%,
principally from significant acquisition activity. EBIT in 1997 was 30.6% higher
than 1996, but EBIT margin declined somewhat. Product mix, integration issues
related to new acquisitions and lower results in certain store display and
fixture markets impacted EBIT margin.
In 1998, Aluminum Products sales increased 13.5%, principally from
acquisitions. A major die casting customer's restructuring and inventory
reduction, and reduced production in smelting facilities due to lower prices of
aluminum and availability of aluminum scrap, lowered the sales improvement.
Segment EBIT declined 26.9% and EBIT margin was reduced as the impact of
acquisitions was more than offset by the die cast customer and smelting
production issues referred to above, and production inefficiences in certain die
cast facilities. Aluminum Products sales in 1997 improved 27.6% over 1996, as a
result of acquisitions and increased volume. EBIT improved 47.7% and EBIT margin
increased in 1997, reflecting the acquisitions, improved volume and production
efficiencies.
In 1998, Industrial Materials sales were 1.1% higher than 1997, reflecting
acquisition-related sales and improved steel tubing volume. These factors were
substantially offset by selling price declines on drawn wire and lower specialty
wire product sales in the cotton industry. EBIT improved 19.3% in 1998 and EBIT
margin was better principally reflecting lower raw material prices and improved
operating efficiencies, partially offset by selling price declines. Industrial
Materials sales in 1997 increased 9.5% over 1996 due primarily to volume
improvement. EBIT improved 13.6% in 1997, and EBIT margins were somewhat higher
as the increased volume resulted in production efficiencies and better overhead
absorption.
Specialized Products sales increased 39.5% in 1998 due primarily to
acquisitions. EBIT improved 42.6%, reflecting acquisition growth and higher
machinery sales. EBIT margin was up slightly from improved efficiencies in both
automotive and machinery operations. In 1997, Specialized Products sales
increased 23.5% reflecting acquisitions. EBIT grew 64.5% in 1997 versus 1996
reflecting the acquisitions and improved automotive operations. Also, EBIT
margin was higher in 1997 due to improved automotive operations, particularly in
Europe.
New Financial Accounting Standards Board Statements
During 1998, the Financial Accounting Standards Board (FASB) issued a new
accounting standard on "Accounting for Derivative Instruments and Hedging
Activities" (FASB No. 133). This new accounting standard will become effective
for 2000 financial reporting. FASB No. 133 is not expected to have a major
effect on the Company's financial statements since the Company has not engaged
in significant hedging or other activities involving derivative instruments in
the past and has no current plans to use such instruments extensively in the
future.
Year 2000 Readiness Disclosure
The "Year 2000" issue refers to older computer programs that used only two
digits to represent the year, rather than four digits. As a result, these older
computer programs may not process information or otherwise function properly
when using the year "2000", since that year will be indistinguishable from the
year "1900". These computer programs are found in information processing
applications and in timing devices for certain machinery and equipment.
To monitor Year 2000 issues, the Company implemented a Corporate level Year
2000 Steering Committee (the Steering Committee). The Steering Committee meets
regularly to review the Company's progress, and to consider other actions that
may be necessary for Year 2000 issues.
In addition, the Company has engaged a large, reputable consulting firm to
perform certain procedures to review the Company's planning, implementation and
readiness for the Year 2000 issues at certain major locations. The results of
the consulting firm's preliminary and follow-up studies have been reviewed with
the Company's Audit Committee of the Board of Directors. The Company has
responded, or is in the process of responding, to issues raised by the
consulting firm's studies.
The Company recognized the Year 2000 issue several years ago, and has been
working since to correct this problem in its computer systems. The majority of
the Company's information processing is centralized at its Corporate Offices.
All of these critical central systems have been converted to Year 2000 compliant
software, and individual system testing is substantially complete.
Many of the Company's international and certain domestic operations do not
use some or any of the Corporate Offices' centralized systems. All of these non-
central system locations have active projects underway to convert their systems
to Year 2000 compliant software by no later than the Third Quarter 1999. Also,
adequate testing of these non-central system conversions is expected to be
completed by that date.
In total, combining both central system and non-central system locations,
management estimates that the Year 2000 systems conversion effort is over 80%
complete as of December 31, 1998.
All locations of the Company have been instructed to review their
facilities for Year 2000 issues. Potential internal and third-party risks were
identified for the operating locations to consider. Inventories of computer
equipment, communications with key suppliers, correspondence with customers,
obtaining machinery and equipment compliance certificates and other facility
testing related to Year 2000 issues are in various stages of completion at the
Company's approximately 300 locations around the world. These efforts are
expected to be complete at all significant locations prior to the year 2000.
Since the Company has been working on Year 2000 issues for several years,
the costs of mitigating these issues, which costs have not been material in the
past, were expensed in ongoing operations. No material costs are expected from
the remaining Year 2000 compliance efforts. Costs of all the Company's system
conversion and implementation efforts, which include those efforts related to
the Year 2000 issue, were less than $6 million in 1998. It is not practical to
segregate past or anticipated capital expenditures between Year 2000 compliance
and expenditures which occur normally to keep operations technologically
competitive. However, management believes that past or expected future capital
requirements related to Year 2000 compliance issues are not significant to its
operations.
The Company manufactures a broad line of products in over 150 major
manufacturing sites around the world. Raw materials and critical outside
services are generally available from numerous supply sources including, in some
cases, the Company's own vertically integrated operations. The Company's
revenues are not dependent upon any single customer or any few customers.
Therefore, the impact to the Company of any individual operating location or
third-party risk involving Year 2000 is relatively small. It is reasonable to
assume that the Company will experience a few, hopefully isolated, disturbances
to its operations early in the year 2000. While reasonable actions have been
taken, and will continue to be taken in the future, to mitigate such disruption,
the magnitude of all Year 2000 disturbances cannot be predicted. In addition,
any widespread Year 2000 failures, particularly in North America, in industries
such as financial services, communications, transportation and electrical or
other utilities could significantly and adversely impact the Company's
operations.
Efforts to date have been concentrated on mitigating Year 2000
disturbances. The Steering Committee plans in 1999 to discuss and evaluate the
reasonable potential risks, and determine the extent of contingency planning and
resources that are appropriate. Any such contingency actions and resources would
be planned to be in place in sufficient time for the year 2000.
Forward-Looking Statements
This report and other public reports or statements made from time to time
by the Company or its management may contain "forward-looking" statements
concerning possible future events, objectives, strategies, trends or results.
Such statements are identified either by the context in which they appear or by
use of words such as "anticipate," "believe," "estimate," "expect," or the like.
Readers are cautioned that any forward-looking statement reflects only the
beliefs of the Company or its management at the time the statement is made. In
addition, readers should keep in mind that, because all forward-looking
statements deal with the future, they are subject to risks, uncertainties and
developments which might cause actual events or results to differ materially
from those envisioned or reflected in any forward-looking statement. Moreover,
the Company does not have and does not undertake any duty to update any forward-
looking statement to reflect events or circumstances after the date on which the
statement was made. For all of these reasons, forward-looking statements should
not be relied upon as a prediction of actual future events, objectives,
strategies, trends or results.
It is not possible to anticipate and list all of the risks, uncertainties
and developments which may affect the future operations or performance of the
Company, or which otherwise may cause actual events or results to differ from
forward-looking statements. However, some of these risks and uncertainties
include the following: general economic and market conditions and risks, such as
the rate of economic growth in the United States, inflation, government
regulation, interest rates, taxation, and the like; risks and uncertainties
which could affect industries or markets in which the Company participates, such
as growth rates and opportunities in those industries, or changes in demand for
certain products, etc.; and factors which could impact costs, including but not
limited to the availability and pricing of raw materials, the availability of
labor and wage rates, and fuel and energy costs. As indicated above, the
consequences of the Year 2000 issues cannot be accurately predicted; therefore,
actual consequences will remain at least to some extent uncertain.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Disclosures About Market Risk
Leggett & Platt, Incorporated and Subsidiaries
(Unaudited)
(Dollar amounts in millions)
Interest Rate
The table below provides information about the Company's debt obligations
sensitive to changes in interest rates. The Company has no other significant
financial instruments sensitive to changes in interest rates. The Company has
not in the past used any derivative financial instruments to hedge its exposure
to interest rate changes. Substantially all of the debt shown in the table below
is denominated in United States dollars (U.S. $). The fair value of fixed rate
debt exceeded its carrying value by $23 and $10 at December 31, 1998 and 1997,
respectively. The fair value of fixed rate debt was calculated using the U.S.
Treasury Bond rate as of December 31, 1998 and 1997 for similar remaining
maturities, plus an estimated "spread" over such Treasury securities
representing the Company's interest costs under its medium-term note program.
The fair value of variable rate debt is not significantly different from its
recorded amount.
<TABLE>
<CAPTION>
Scheduled Maturity Date
---------------------------------------------------------
Long-term debt as of December 31 1999 2000 2001 2002 2003 Thereafter 1998 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal fixed rate debt $35.0* $15.0 $50.0 $75.0 $114.5 $226.7 $516.2 $350.2
Average interest rate 6.77% 5.65% 7.22% 7.18% 6.27% 6.72% 6.71% 6.92%
Principal variable rate debt - - 5.9 5.1 3.3 19.4 33.7 97.1
Average interest rate - - 3.74% 3.70% 5.78% 4.48% 4.36% 5.54%
Miscellaneous debt 29.4 23.6
---------------------
Total debt 579.3 470.9
Less: current maturities * (5.2) (4.7)
----------------------
Total long-term debt $574.1 $466.2
=====================
</TABLE>
* The 1999 scheduled maturity is not included in current maturities, as
the Company intends to refinance this note on a long-term basis either
through reissuance or unused credit available under its revolving
credit agreements.
Exchange Rate
The Company has not typically hedged foreign currency exposures related to
transactions denominated in other than its functional currencies, although such
transactions have not been material in the past. The Company does hedge firm
commitments for certain machinery purchases, and occasionally may hedge amounts
due in foreign currencies related to its acquisition program. The decision by
management to hedge any such transactions is made on a case-by-case basis. The
amount of forward contracts outstanding at December 31, 1998 was approximately
$3 (pay U.S. $/receive Canadian Dollars) and the highest amount during 1998 was
approximately $4.5 ($3 pay U.S. $/receive Canadian Dollars and $1.5 pay U.S.
$/receive Swiss Francs).
The Company views its investment in foreign subsidiaries as a long-term
commitment and does not hedge any translation exposures. The investment in a
foreign subsidiary may take the form of either permanent capital or notes. The
Company's net investment (excluding goodwill) in foreign subsidiaries subject to
translation exposure at December 31 is as follows:
<TABLE>
<CAPTION>
Functional currency 1998 1997
------------------- ------ ------
<S> <C> <C>
Canadian Dollar $142.9 $131.5
European currencies 66.1 50.3
Other (.2) .2
--------------
$208.8 $182.0
==============
</TABLE>
Commodity Price
The Company does not use derivative commodity instruments to hedge its
exposures to changes in commodity prices. The principal commodity price exposure
is aluminum, of which the Company had an estimated $48 and $46 (at cost) in
inventory at December 31, 1998 and 1997, respectively. The Company has
purchasing procedures and arrangements with customers to mitigate its exposure
to aluminum price changes. No other commodity exposures are significant to the
Company.
Item 8. Financial Statements and Supplementary Data.
The Consolidated Financial Statements and supplementary data included in
this Report are listed in Item 14 and begin immediately after Item 14.
Item 9. Changes In And Disagreements With Accountants On Accounting And
Financial Disclosure.
Not applicable.
PART III
Item 10. Directors And Executive Officers Of The Registrant.
Reference is made to the section entitled "Election of Directors" and
"Compliance with Section 16(a) of the Securities Exchange Act of 1934" in the
Company's definitive Proxy Statement for the Company's Annual Meeting of
Shareholders to be held on May 12, 1999, said sections 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 normally elected
annually by the Board of Directors at the Meeting of Shareholders.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Harry M. Cornell, Jr. 70 Chairman of the Board and Chief Executive Officer
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Felix E. Wright 63 President and Chief Operating Officer and Director
David S. Haffner 46 Executive Vice President and Director
Bob L. Gaddy 58 Senior Vice President - Chairman and Chief Executive Officer,
Aluminum Products and Director
Karl G. Glassman 40 Senior Vice President - President, Residential Furnishings
Michael A. Glauber 55 Senior Vice President - Finance and Administration (Principal
Financial Officer)
Robert G. Griffin 47 Senior Vice President
Robert A. Jefferies, Jr. 57 Senior Vice President - Mergers, Acquisitions and Strategic
Planning and Director
Jack D. Crusa 44 Vice President - President, Industrial Materials
Ernest C. Jett 53 Vice President - General Counsel and Secretary
Allan J. Ross 52 Vice President, Accounting (Principal Accounting Officer)
</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 has served as the Company's President and Chief Operating
Officer for more than the last five years.
David S. Haffner was elected Executive Vice President in 1995. He
previously served as Senior Vice President and President-Furniture and
Automotive Components Group from 1992 to 1995.
Bob L. Gaddy joined the Company in May, 1996 with the Company's acquisition
of Pace Industries, Inc. At that time he was elected a Senior Vice President of
the Company. From 1984 to 1993, Mr. Gaddy was President and Chief Operating
Officer of Pace Industries, Inc. and since 1993 has served as Chairman of
the Board and Chief Executive Officer of Pace Industries, Inc. Mr. Gaddy
presently serves as Chairman and Chief Executive Officer of all the Company's
aluminum products operations.
Karl G. Glassman has been employed by the Company for more than the last
five years, became Vice President and President - Bedding Components in 1995 and
became a Senior Vice President - President Residential Furnishings in 1999.
Michael A. Glauber has served as the Company's Senior Vice President,
Finance and Administration for more than the last five years.
9
<PAGE>
Robert G. Griffin has been employed by the Company for more than the last
five years, was named Vice President and Director of Mergers, Acquisitions and
Strategic Planning in 1995, President - Commercial Fixtures and Display Group in
1998 and Senior Vice President in 1999.
Robert A. Jefferies, Jr. has served as the Company's Senior Vice President,
Mergers, Acquisitions and Strategic Planning for more than the last five years.
Jack D. Crusa has served the Company as Vice President and President -
Automotive Components for the last five years and became President - Industrial
Materials in 1999.
Ernest C. Jett was appointed General Counsel in 1997, and was elected Vice
President and Secretary in 1995. He previously served the Company as Assistant
General Counsel from 1979 to 1995 and as Managing Director of the Legal
Department from 1991 to 1997.
Allan J. Ross has served the Company as Vice President, Accounting since
April, 1993. In May, 1996 Mr. Ross was designated by the Board of Directors as
the Company's Principal Accounting Officer.
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 12, 1999, 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 12, 1999, 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
12, 1999 is incorporated by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
10
<PAGE>
1. Financial Statements and Financial Statement Schedule Covered by
Report of Independent Accountants.
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, 1998
. Consolidated Balance Sheets at December 31, 1998 and 1997
. Consolidated Statements of Cash Flows for each of the years in the
three year period ended December 31, 1998
. Consolidated Statements of Changes in Shareholders' Equity for each of
the years in the three year period ended December 31, 1998
. Notes to Consolidated Financial Statements
. Schedule for each of the years in the three year period ended December
31, 1998
Schedule II - 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.
2. Exhibits - See Exhibit Index.
3. Reports on Form 8-K filed during the last quarter of 1998:
Form 8-K filed as of December 1, 1998 regarding adoption of
Shareholder Protection Rights Plan
11
<PAGE>
Consolidated Statements of Earnings
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
<TABLE>
<CAPTION>
Year ended December 31 1998 1997 1996
-------------- ----------- -----------
<S> <C> <C> <C>
Net sales $3,370.4 $2,909.2 $2,466.2
Cost of goods sold 2,498.9 2,171.4 1,842.7
-------------- ----------- -----------
Gross profit 871.5 737.8 623.5
Selling, distribution and administrative expenses 422.8 358.8 303.5
Amortization of excess cost of purchased
companies and other intangibles 21.8 17.3 16.4
Merger expense - - 26.6
Other income, net of other deductions 2.2 .8 .6
-------------- ----------- -----------
Earnings before interest, income taxes
and extraordinary item 429.1 362.5 277.6
Interest expense 38.5 31.8 30.0
Interest income 5.0 2.6 2.1
-------------- ----------- -----------
Earnings before income taxes
and extraordinary item 395.6 333.3 249.7
Income taxes 147.6 125.0 96.7
-------------- ----------- -----------
Net earnings before extraordinary item 248.0 208.3 153.0
Extraordinary item from the extinguishment of debt - - 12.5
-------------- ----------- -----------
Net earnings $248.0 $208.3 $140.5
============== =========== ===========
Earnings per share
Net earnings before extraordinary item - basic $ 1.25 $ 1.09 $ .84
============== =========== ===========
Net earnings before extraordinary item - diluted $ 1.24 $ 1.08 $ .83
============== =========== ===========
Net earnings - basic $ 1.25 $ 1.09 $ .78
============== =========== ===========
Net earnings - diluted $ 1.24 $ 1.08 $ .77
============== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Consolidated Balance Sheets
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
<TABLE>
<CAPTION>
December 31 1998 1997
---------- ----------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 83.5 $ 7.7
Accounts and notes receivable, less allowance
of $13.5 in 1998 and $11.5 in 1997 503.1 438.6
Inventories
Finished goods 251.7 228.0
Work in process 56.2 50.3
Raw materials and supplies 185.5 170.0
LIFO reserve (7.2) (15.1)
---------- ----------
Total inventories 486.2 433.2
Other current assets 64.3 65.1
---------- -----------
Total current assets 1,137.1 944.6
Property, Plant and Equipment - at cost
Machinery and equipment 915.5 767.8
Buildings and other 470.6 397.3
Land 48.9 47.2
---------- ----------
Total property, plant and equipment 1,435.0 1,212.3
Less accumulated depreciation 614.6 519.1
---------- ----------
Net property, plant and equipment 820.4 693.2
Other Assets
Excess cost of purchased companies over net assets
acquired, less accumulated amortization of
$50.8 in 1998 and $38.2 in 1997 498.9 394.0
Other intangibles, less accumulated amortization of
$25.3 in 1998 and $24.1 in 1997 29.7 31.6
Sundry 49.2 42.9
---------- ----------
Total other assets 577.8 468.5
---------- ----------
TOTAL ASSETS $2,535.3 $2,106.3
========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1998 1997
---------- ----------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 134.8 $ 128.7
Accrued expenses 168.8 166.4
Other current liabilities 97.8 77.4
---------- ----------
Total current liabilities 401.4 372.5
Long-Term Debt 574.1 466.2
Other Liabilities 48.1 40.8
Deferred Income Taxes 74.9 52.8
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 197,766,091
and 192,759,120 shares in 1998
and 1997, respectively 2.0 1.0
Additional contributed capital 396.1 311.9
Retained earnings 1,058.7 871.3
Accumulated other comprehensive income (18.2) (10.1)
Less treasury stock - at cost (82,580 and 4,774
shares in 1998 and 1997, respectively) (1.8) (.1)
---------- ----------
Total shareholders' equity 1,436.8 1,174.0
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,535.3 $2,106.3
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Consolidated Statements of Cash Flows
Leggett & Platt, Incorporated and Subsidiaries
<TABLE>
<CAPTION>
(Dollar amounts in millions)
Year ended December 31 1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Operating Activities
Net earnings $ 248.0 $ 208.3 $ 140.5
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation 106.1 88.3 75.8
Amortization 21.8 17.3 16.4
Merger expense (non-cash portion) - - 24.4
Extraordinary item (non-cash portion) - - 4.0
Stock and deferred compensation 10.8 7.9 14.2
Deferred income tax expense (benefit) 17.3 (1.5) (13.4)
Other (3.6) (2.1) .5
Other changes, excluding effects from
purchases of companies
(Increase) in accounts receivable,net (31.5) (52.1) (17.0)
(Increase) in inventories (6.6) (15.0) (7.5)
(Increase) in other current assets (7.2) (5.1) (2.1)
(Decrease) increase in current liabilities (.2) 42.3 2.3
------- ------- -------
Net Cash Provided by Operating Activities 354.9 288.3 238.1
Investing Activities
Additions to property, plant and equipment (147.6) (119.4) (96.2)
Purchases of companies, net of cash acquired (117.1) (171.6) (89.7)
Other 6.7 8.2 (3.1)
------- ------- -------
Net Cash Used for Investing Activities (258.0) (282.8) (189.0)
Financing Activities
Additions to debt 269.7 214.8 292.9
Payments on debt (216.9) (164.7) (309.4)
Dividends paid (59.9) (48.0) (30.3)
Issuances of common stock 5.0 6.6 5.0
Purchase of common stock (13.5) (5.7) (10.1)
Other (5.5) (4.5) (1.7)
------- ------- -------
Net Cash Used for Financing Activities (21.1) (1.5) (53.6)
------- ------- -------
Increase (Decrease) in Cash and Cash Equivalents 75.8 4.0 (4.5)
Cash and Cash equivalents - Beginning of Year 7.7 3.7 8.2
------- ------- -------
Cash and Cash Equivalents - End of Year $ 83.5 $ 7.7 $ 3.7
======= ======= =======
Supplemental Information
Interest paid $ 36.5 $ 30.3 $ 28.8
Income taxes paid 142.6 124.4 92.8
Liabilities assumed of acquired companies 118.9 81.1 47.3
Common stock issued for acquired companies 66.8 52.0 58.3
Common stock issued for employee stock plan 26.4 27.4 39.4
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Consolidated Statements of Changes in Shareholders' Equity
Leggett & Platt, Incorporated and Subsidiaries
<TABLE>
<CAPTION>
(Dollar amounts in millions, except per share data)
Year ended December 31
1998 1997 1996
-------- -------- ------
<S> <C> <C> <C>
Common Stock
Balance, beginning of period $ 1.0 $ .9 $ .9
Common stock issued - .1 -
Two-for-one stock split 1.0 - -
-------- -------- ------
Balance, end of period $ 2.0 $ 1.0 $ .9
======== ======== ======
Additional Contributed Capital
Balance, beginning of period $ 311.9 $ 240.2 $164.0
Common stock issued 87.3 74.6 90.2
Treasury stock issued (6.2) (9.7) (5.7)
Treasury stock purchased - - (9.6)
Tax benefit related to stock options 4.1 6.8 1.3
Two-for-one stock split (1.0) - -
-------- -------- ------
Balance, end of period $ 396.1 $ 311.9 $240.2
======== ======== ======
Retained Earnings
Balance, beginning of period $ 871.3 $ 704.4 $601.6
Net earnings for the year 248.0 208.3 140.5
Retained earnings of pooled companies at date of acquisition 1.7 9.2 3.6
Cash dividends declared (per share: 1998 - $.315; 1997 - $.27;
1996 - $.23) (62.3) (50.6) (41.3)
-------- -------- ------
Balance, end of period $1,058.7 $ 871.3 $704.4
======== ======== ======
Treasury Stock
Balance, beginning of period $ (.1) $ (.2) $(14.7)
Treasury stock purchased (19.7) (17.3) (3.0)
Treasury stock issued 18.0 17.4 17.5
-------- -------- ------
Balance, end of period $ (1.8) $ (.1) $ (.2)
======== ======== ======
Accumulated Other Comprehensive Income
Balance, beginning of period $ (10.1) $ (4.2) $ (5.0)
Foreign currency translation adjustment (8.1) (5.9) .8
-------- -------- ------
Balance, end of period $ (18.2) $ (10.1) $ (4.2)
======== ======== ======
Total Shareholders' Equity $1,436.8 $1,174.0 $941.1
======== ======== ======
Comprehensive Income
Net earnings $ 248.0 $ 208.3 $140.5
Foreign currency translation adjustment (net of tax: 1998 - $2.2;
1997 - $1.1; 1996 - $.2) (8.1) (5.9) .8
-------- -------- ------
Total Comprehensive Income $ 239.9 $ 202.4 $141.3
======== ======== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
Notes to Consolidated Financial Statements
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
December 31, 1998, 1997 and 1996
A-Summary of Significant Accounting Policies
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Leggett & Platt, Incorporated (Leggett & Platt) and its
majority-owned subsidiaries (the Company). All significant intercompany
transactions and accounts have been eliminated in consolidation.
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 50% and 55% of the
inventories at December 31, 1998 and 1997, respectively. The first-in, first-out
(FIFO) method is principally used for the remainder. The FIFO cost of
inventories at December 31, 1998 and 1997 approximated replacement cost.
DEPRECIATION, AMORTIZATION AND ASSET IMPAIRMENT: Property, plant and
equipment are depreciated by the straight-line method. The rates of depreciation
range from 7% to 25% for machinery and equipment, 3% to 7% for buildings and 12%
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. The rates of amortization range
from 5% to 33%. In accordance with FASB Statement No. 121, long-lived assets,
including intangibles, are evaluated for probable recovery of their carrying
amount. Appropriate adjustment, using current market values, estimates of
discounted future cash flows and other methods, is made when recovery of the
carrying amount is not reasonably assured.
CONCENTRATION OF CREDIT RISKS, EXPOSURES AND FINANCIAL INSTRUMENTS: The
Company engages in manufacturing, marketing, and distributing engineered
products for markets served by the Company as described in Note K. The Company's
operations are principally in the United States, although the Company also has
manufacturing subsidiaries in Canada, Europe, Mexico and China and marketing and
distribution operations in other areas.
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 purchases and other transactions 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.
The carrying value of cash and short-term financial instruments
approximates fair value due to the short maturity of those instruments. The fair
value of long-term debt exceeds the carrying value by approximately $23.
OTHER RISKS: The Company obtains insurance for workers' 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 carriers.
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.
INCOME TAXES: The Company provides for taxes on undistributed earnings of
foreign subsidiaries where appropriate. The tax effect of most distributions
would be significantly offset by available foreign tax credits.
STOCK-BASED COMPENSATION: The Company applies the intrinsic value based
method of accounting prescribed by APB Opinion No. 25 and related
interpretations in accounting for stock-based compensation plans. Accordingly,
compensation cost for stock options is measured as the excess, if any, of the
quoted market price of the Company's stock at the date of grant over the amount
an employee must pay to acquire the stock.
FOREIGN CURRENCY TRANSLATION: The functional currency for most foreign
operations is the local currency. The translation of foreign currencies into
U.S. dollars is performed for balance sheet accounts using current exchange
rates in effect at the balance sheet date and for income and expense accounts
using monthly average exchange rates. The cumulative effects of translating the
functional currencies into the U.S. dollar are included in comprehensive income.
Foreign entities whose functional currency is the U.S. dollar are not
significant.
<PAGE>
B-Stock Split
On June 15, 1998, the Company distributed a two-for-one stock split in the
form of a stock dividend. This resulted in the issuances of 98,289,297
additional shares of common stock and 34,096 shares held in treasury. All share
and per share amounts have been restated to reflect the split.
<PAGE>
C-Acquisitions
During 1998, the Company acquired sixteen businesses in transactions
accounted for as purchases. These transactions required the use of $117.1 in
cash, net of cash acquired, and 2,741,480 shares of common stock valued at
$59.8. The excess of the purchase price over the fair value of the net assets
acquired increased goodwill by $121.8. The Company also issued 183,892 shares to
acquire one business in a transaction accounted for as a pooling of interests.
The Company elected not to restate its financial statements as the effect of
this pooling was not material. These acquired businesses manufacture and
distribute products primarily to the commercial furnishings and residential
furnishings markets, as well as the other markets the Company serves.
The unaudited pro forma consolidated net sales for the years ended December
31, 1998 and 1997 as though the 1998 acquisitions had occurred on January 1 of
each year presented were $3,440.2 and $3,189.9, respectively. The unaudited pro
forma consolidated net earnings and earnings per share are not materially
different from the amounts reflected in the accompanying financial statements.
These pro forma amounts are not necessarily indicative of either results of
operations that would have occurred had the purchases been made on January 1 of
each year or of future results of the combined companies.
During 1997, the Company acquired the assets of 28 companies in exchange
for $171.6 in cash, net of cash acquired, and 2,180,100 shares of common stock
valued at $38.7 in transactions accounted for as purchases. The excess of the
purchase price over the fair value of the net assets acquired increased goodwill
by $116.0. These companies manufacture and distribute products to residential
furnishings, commercial furnishings and other markets. The Company also issued
3,736,960 shares to acquire two businesses in transactions accounted for as
poolings of interests. The Company elected not to restate its financial
statements as the effect of these poolings was not material. These businesses
manufacture and distribute products to aluminum products markets.
On May 13, 1996, the Company issued 10,268,184 shares of common stock to
acquire Pace Holdings, Inc. (Pace) in a transaction accounted for as a pooling
of interests. Pace is a leading manufacturer and marketer of non-automotive
aluminum die cast components. Previously issued financial statements were
restated to reflect the pooling.
In connection with a 1993 leveraged buyout transaction, Pace adopted an
employee stock option/bonus plan that provided for the granting of options,
under certain conditions, at an exercise price of $.01 per Pace share. In May
1996, prior to the acquisition, options were granted and exercised under the
plan resulting in compensation expense of $12 before taxes. Other merger
expense, including costs for the accrual of commitments under contracts no
longer benefiting the Company and legal and environmental issues, was $14.6
before taxes in 1996.
Following the acquisition, the Company issued a tender offer to all holders
of the Pace 10.625% senior notes. In June 1996, the notes were redeemed at
approximately 113% of par value, plus accrued interest. The cash required for
the redemption was provided through the issuance of medium-term notes and the
Company's revolving credit agreements. The Company recognized an extraordinary
charge, net of related tax benefits, of $12.5 from the extinguishment of debt.
Also during 1996, the Company acquired the assets of twelve companies in
transactions accounted for as purchases. These transactions required the use of
$89.7 in cash, net of cash acquired, and 4,256,248 shares of common stock and
common stock equivalents valued at $54.5. The excess of the purchase price over
the fair value of the net assets acquired increased goodwill by $86.6. In
addition, the Company issued 1,124,858 shares to acquire another business in a
transaction accounted for as a pooling of interests. The Company elected not to
restate its financial statements as the effect of this pooling was not material.
These acquired businesses manufacture and distribute products to residential
furnishings, commercial furnishings and other markets.
The results of operations of the above acquired companies, except the 1996
Pace pooling, have been included in the consolidated financial statements since
the dates of acquisition.
The terms of certain of the Company's acquisition agreements provide for
additional consideration to be paid if the acquired company's results of
operations exceed certain targeted levels. Such additional consideration may be
paid in cash or shares of the Company's common stock, and is recorded when
earned as additional purchase price. The maximum amount of additional
consideration remaining at December 31, 1998 is approximately $50 and will be
payable, if earned, through 2002.
<PAGE>
D - Earnings Per Share
Basic and diluted earnings per share were calculated as follows:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Basic
Weighted average shares outstanding,
including shares issuable for little
or no cash 197,682,147 190,268,516 181,072,718
------------- ------------ ------------
Net earnings before extraordinary item $248.0 $208.3 $153.0
============= ============ ============
Earnings per share - basic $1.25 $1.09 $.84
============= ============ ============
Diluted
Weighted average shares outstanding,
including shares issuable for little
or no cash 197,682,147 190,268,516 181,072,718
Additional dilutive shares principally
from the assumed exercise of
outstanding stock options 2,987,686 2,921,108 2,616,656
------------- ------------ ------------
200,669,833 193,189,624 183,689,374
============= ============ ============
Net earnings before extraordinary item $248.0 $208.3 $153.0
============= ============ ============
Earnings per share - diluted $1.24 $1.08 $.83
============= ============ ============
</TABLE>
<PAGE>
E-Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities at December 31 consist of
the following:
<TABLE>
<CAPTION>
1998 1997
------------ -------------
<S> <C> <C>
Accrued expenses
Wages and commissions payable $ 36.0 $ 41.8
Workers' compensation, medical, auto
and product liability insurance 45.5 46.5
Income taxes 5.9 10.9
Other 81.4 67.2
------------ -------------
$168.8 $166.4
============ =============
Other current liabilities
Outstanding checks in excess of book balances $ 46.5 $ 41.9
Current maturities of long-term debt 5.2 4.7
Other 46.1 30.8
------------ -------------
$ 97.8 $ 77.4
============= ==============
</TABLE>
<PAGE>
F-Long-Term Debt
Long-term debt, weighted average interest rates and due dates at December
31 are as follows:
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Medium-term notes, fixed interest rates of 6.8% and 7.0%
for 1998 and 1997, respectively, due dates through 2008 $491.0 $325.0
Commercial paper, variable interest rate of
6.6% for 1997, due date in 1998 - 63.3
Industrial development bonds, principally variable interest
rates of 4.5% and 4.2% for 1998 and 1997, respectively,
due dates through 2030 38.9 38.9
Other, partially secured 49.4 43.7
----------- ------------
579.3 470.9
Less current maturities 5.2 4.7
----------- ------------
$574.1 $466.2
============ ============
</TABLE>
The current revolving credit agreements provide for a maximum line of
credit of $300. 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 credit agreements. Agreement amounts of $217.5 and $82.5 will
terminate at July 31, 2002 and August 31, 1999, respectively, at which time all
outstanding balances will become due.
Medium-term notes that mature in the current year are classified as long-
term debt since the Company intends to refinance them 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 and require net earnings to meet or exceed specified levels of
funded debt.
Maturities of long-term debt for each of the five years following 1998 are:
<TABLE>
<CAPTION>
Year ended December 31
<S> <C>
1999 $ 5.2
2000 18.0
2001 60.4
2002 117.7
2003 123.6
</TABLE>
<PAGE>
G-Lease Obligations
The Company conducts certain 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 $29.6, $27.3 and $24.3 for the years ended December 31, 1998,
1997 and 1996, respectively.
Future minimum rental commitments for all long-term noncancelable operating
leases are as follows:
<TABLE>
<CAPTION>
Year ended December 31
<S> <C>
1999 $16.2
2000 11.5
2001 8.0
2002 5.2
2003 2.6
Later years 2.6
-----
$46.1
=====
</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.
<PAGE>
H-Capital Stock
STOCK ACTIVITY
Activity in the Company's stock accounts for each of the three years ended
December 31 is as follows:
<TABLE>
<CAPTION>
Common Treasury
Stock Stock
----------- ----------
<S> <C> <C>
Balance, January 1, 1996 178,814,206 (1,289,078)
Shares issued 5,413,366 1,494,066
Treasury stock purchased - (217,528)
----------- ----------
Balance, December 31, 1996 184,227,572 (12,540)
Shares issued 8,531,548 930,280
Treasury stock purchased - (922,514)
----------- ----------
Balance, December 31, 1997 192,759,120 (4,774)
Shares issued 5,006,971 779,695
Treasury stock purchased - (857,501)
----------- ----------
Balance, December 31, 1998 197,766,091 (82,580)
=========== ==========
</TABLE>
The Company issues shares for employee stock plans and acquisitions. The
Company purchases its common stock to meet the requirements of the employee
stock purchase and incentive plans, to replace shares issued in purchase
acquisitions and to satisfy contractual obligations. The Company will also
receive shares in stock-for-stock option exercises.
STOCK OPTIONS
At December 31, 1998, the Company had 13,836,912 common shares authorized
for issuance under stock option plans. Generally, options become exercisable in
varying installments, beginning 6 to 18 months after the date of grant, and have
a maximum term of 5-15 years. Options may be issued with exercise prices at or
below market price. Compensation cost charged against income related to the
Company's stock option grants for each of the years ending December 31, 1998,
1997 and 1996 was $8.9, $6.6 and $13.7, respectively. Compensation cost
includes amounts for options granted under the deferred compensation plan for
certain executives, which allows the executive to elect stock options in lieu of
future salary and bonuses. Had compensation cost for the Company's stock-based
compensation plans been determined based on the estimated fair value of the
options at the grant dates, consistent with the method of FASB Statement No.
123, the Company's net income and earnings per share would not be significantly
reduced.
A summary of the Company's stock option plans as of December 31, 1998, 1997
and 1996, and changes during the years ending on those dates is presented below:
<TABLE>
<CAPTION>
Weighted
Average
Exercise Price
Shares per Share
---------- --------------
<S> <C> <C>
Outstanding at January 1, 1996 5,264,778 $ 5.44
Granted 4,954,314 10.14
Exercised (1,342,620) 5.61
Forfeited (85,168) 10.45
---------- ------
Outstanding at December 31, 1996 8,791,304 8.01
Granted 1,429,502 10.18
Exercised (2,066,732) 6.45
Forfeited (161,480) 11.76
---------- ------
Outstanding at December 31, 1997 7,992,594 8.72
Granted 966,798 14.38
Exercised (1,218,447) 9.05
Forfeited (36,760) 16.85
---------- ------
Outstanding at December 31, 1998 7,704,185 $ 9.34
---------- ------
Options exercisable at
December 31, 1998 4,646,155 $ 6.67
December 31, 1997 3,488,022 6.16
December 31, 1996 3,653,654 4.53
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
1998 1997 1996
------------- ------------- --------------
Weighted-average fair value of options:
<S> <C> <C> <C>
Granted at market price $5.66 $4.44 $2.53
Granted below market price 16.52 12.27 8.44
Weighted-average exercise price of options:
Granted at market price 23.20 20.31 11.89
Granted below market price 3.17 4.54 6.76
Principal assumptions used in calculating
fair value consistent with the method of FASB
Statement No. 123:
Risk-free interest rate 5.1% 6.0% 5.9%
Expected life in years 5.1 4.8 4.3
Expected volatility 20.0% 19.0% 19.0%
Expected dividend yield 1.5% 1.7% 1.7%
</TABLE>
The following table summarizes information about stock options outstanding
at December 31, 1998:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
--------------------------------------------------- ------------------------------
Weighted-Average
Remaining Weighted- Weighted-
Range of Number Contractual Life Average Number Average
Exercise Prices Outstanding In Years Exercise Price Exercisable Exercise Price
- --------------- --------------------------------------------------- ------------------------------
<S> <C> <C> <C> <C> <C>
$ .01 - $ .25 1,538,563 6.9 $.06 1,341,980 $.06
1.81 - 5.69 986,911 1.9 3.82 705,284 3.68
7.75 - 9.84 665,782 2.3 8.04 631,378 7.99
10.00 - 12.94 2,922,593 2.4 11.05 1,576,278 11.21
13.06 - 15.44 553,270 7.2 13.69 344,865 13.69
16.06 - 18.06 74,738 3.0 16.42 23,570 16.48
20.00 - 21.50 427,828 3.9 21.20 22,800 21.34
22.09 - 25.63 534,500 4.2 23.53 - -
</TABLE>
The Company also has authorized shares for issuance in connection with
certain employee stock benefit plans discussed in Note I.
PAR VALUE AMENDMENT
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. 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.
SHAREHOLDER PROTECTION RIGHTS PLAN
In 1989, the Company declared a dividend distribution of one preferred
stock purchase right (a Right) for each share of common stock. The Rights were
attached to and traded with the Company's common stock. The Rights became
exercisable only under certain circumstances involving actual or potential
acquisitions of the Company's common stock. The Rights expired in February 1999.
The Company simultaneously issued substantially identical rights, which remain
in existence until February 2009, unless they are exercised, exchanged or
redeemed at an earlier date. Depending upon the circumstances, if these 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.
<PAGE>
I-Employee Benefit Plans
The following table provides information at December 31 as to the Company
sponsored defined benefit pension plans:
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- -----------
<S> <C> <C> <C>
Change in Benefit Obligation
Benefit obligation, beginning of period $ 89.5 $ 69.2 $ 62.5
Service cost 2.2 1.6 1.7
Interest cost 5.1 5.0 4.5
Plan participants' contributions 4.0 3.5 3.0
Actuarial losses 4.4 14.7 1.2
Benefits paid (5.1) (4.5) (3.7)
----------- ----------- ------------
Benefit obligation, end of period 100.1 89.5 69.2
Change in Plan Assets
Fair value of plan assets, beginning of period 127.6 98.8 87.1
Actual return on plan assets 5.6 29.8 12.4
Plan participants' contributions 4.0 3.5 3.0
Benefits paid (5.1) (4.5) (3.7)
----------- ----------- ------------
Fair value of plan assets, end of period 132.1 127.6 98.8
Plan Assets in Excess of Benefit Obligations 32.0 38.1 29.6
Unrecognized net actuarial gains (5.6) (14.8) (7.6)
Unrecognized net transition asset (1.0) (1.7) (2.4)
Unrecognized prior service cost (.3) (.3) (.3)
----------- ----------- ------------
Prepaid pension cost $ 25.1 $ 21.3 $ 19.3
=========== =========== ============
Components of Net Pension Income
Service cost $ (2.2) $ (1.6) $ (1.7)
Interest cost (5.1) (5.0) (4.5)
Expected return on plan assets 10.0 7.9 7.0
Amortization of net transition asset .7 .7 .7
Recognized net actuarial gain .4 -- --
----------- ----------- ------------
Net pension income $ 3.8 $ 2.0 $ 1.5
=========== =========== ============
Weighted Average Assumptions
Discount rate 5.50% 6.00% 7.25%
Expected return on plan assets 8.00% 8.00% 8.00%
Rate of compensation increase 4.40% 5.20% 5.19%
</TABLE>
Plan assets are invested in a diversified portfolio of equity, debt and
government securities, including 1,176,000 shares of the Company's common stock
at December 31, 1998.
<PAGE>
Contributions to union sponsored, defined benefit, multiemployer pension
plans were $.2 in 1998, 1997 and 1996. These plans are not administered by the
Company and contributions are determined in accordance with provisions of
negotiated labor contracts. As of 1998, the actuarially computed values of
vested benefits for these plans were primarily equal to or less than the net
assets of the plans. Therefore, the Company would have no material 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 expense, including Company sponsored defined benefit plans,
multiemployer plans and other plans, was $.4, $.8 and $.4 in 1998, 1997 and
1996, respectively.
The Company 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
$6.9, $5.8 and $4.7 for 1998, 1997 and 1996, respectively.
Under the DSP, eligible employees may purchase a maximum of 16,000,000
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 894,445, 871,394 and 1,009,210 during 1998, 1997 and 1996,
respectively. Purchase prices ranged from $10 to $23 per share. Since inception
of the DSP in 1982, a total of 13,100,743 shares have been purchased by
employees.
<PAGE>
J-Income Taxes
The components of earnings before income taxes and extraordinary item are
as follows:
<TABLE>
<CAPTION>
Year ended December 31 1998 1997 1996
------------ ------------ -------------
<S> <C> <C> <C>
Domestic $340.8 $292.2 $218.0
Foreign 54.8 41.1 31.7
------------ ------------ -------------
$395.6 $333.3 $249.7
============ ============ =============
</TABLE>
Income tax expense is comprised of the following components:
<TABLE>
<CAPTION>
Year ended December 31 1998 1997 1996
------------ ------------ -------------
<S> <C> <C> <C>
Current
Federal $108.1 $102.2 $ 86.3
State and local 4.2 9.9 12.1
Foreign 18.0 14.4 11.7
------------ ------------ -------------
130.3 126.5 110.1
Deferred
Federal 4.1 (5.5) (12.8)
State and local 11.0 4.1 (.5)
Foreign 2.2 (.1) (.1)
------------ ------------ ------------
17.3 (1.5) (13.4)
------------ ------------ ------------
$147.6 $125.0 $ 96.7
============ ============ =============
</TABLE>
In addition to the above income tax expense, the Company recognized a
current benefit from an extraordinary item of $7.7 in 1996.
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 are as follows:
<TABLE>
<CAPTION>
December 31 1998 1997
------------- -------------
<S> <C> <C>
Property, plant and equipment $(70.0) $(53.7)
Accrued expenses 51.3 55.2
Prepaid pension cost (10.1) (8.4)
Other, net (20.8) (14.0)
------------- -------------
$(49.6) $(20.9)
============= =============
</TABLE>
Deferred tax assets and liabilities included in the consolidated balance
sheet are as follows:
<TABLE>
<CAPTION>
December 31 1998 1997
------------- -------------
<S> <C> <C>
Other current assets $ 25.3 $ 31.9
Deferred income taxes (74.9) (52.8)
------------- -------------
$(49.6) $(20.9)
============= =============
</TABLE>
A valuation allowance has not been provided for the deferred tax asset as
the Company believes it will be realized through future taxable income and
reversal of other timing differences.
<PAGE>
Income tax expense, as a percentage of earnings before income taxes and
extraordinary item, differs from the statutory federal income tax rate as
follows:
<TABLE>
<CAPTION>
Year ended December 31 1998 1997 1996
------------- ------------ ----------
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 35.0%
Increases in rate resulting primarily
from state and other jurisdictions 2.3 2.5 3.7
------------- ------------ ----------
Effective tax rate 37.3% 37.5% 38.7%
============= ============ ==========
</TABLE>
<PAGE>
K-Segment Information
The Company has primarily determined its reportable segments based upon the
internal organization, which is generally focused on broad end-user markets for
its diversified products. Residential Furnishings derives its revenues from
bedding, furniture and other furnishings components and related consumer
products. Commercial Furnishings derives its revenues from office and
institutional furnishings components, retail store fixtures, displays and other
commercial products and systems. The Aluminum Products segment derives its
revenues from die castings, custom tooling and dies, machining and coating and
aluminum raw materials (ingot). Industrial Materials derives its revenues from
drawn wire, specialty wire products and welded steel tubing materials.
Specialized Products is a combination of segments which derive their revenues
from machinery and manufacturing equipment and automotive seating suspension,
lumbar support and control cable systems.
The accounting principles used in the preparation of the segment
information are the same as used for the consolidated financial statements,
except that the segment assets and income reflect the FIFO basis of accounting
for inventory. Certain inventories are accounted for using the LIFO basis in the
consolidated financial statements. The Company evaluates performance based on
earnings from operations before interest and income taxes (EBIT). Intersegment
sales are made primarily at prices that approximate market-based selling prices.
Centrally incurred costs are allocated to the segments based on estimates of
services used by the segment. Certain general and administrative costs of the
Company are allocated to the segments based on sales. Asset information for the
segments includes only inventory, trade receivables, net property, plant and
equipment and purchased intangibles. These segment assets are reflected in the
segment information at their estimated average for the year. Long-lived assets
as disclosed below include property, plant and equipment, goodwill and other
intangibles, and long-term assets. Centrally incurred costs and allocated
general and administrative costs include depreciation and other costs related to
assets that are not allocated or otherwise included in the segment assets.
Summarized financial information concerning the Company's reportable
segments is shown in the following tables:
<PAGE>
<TABLE>
<CAPTION>
Year ended December 31
Inter-
External Segment Total
Sales Sales Sales EBIT
----------------------------------------------
<S> <C> <C> <C> <C>
1998
Residential Furnishings $1,800.5 $ 11.4 $1,811.9 $201.8
Commercial Furnishings 623.3 1.7 625.0 111.1
Aluminum Products 501.1 - 501.1 32.6
Industrial Materials 269.6 174.9 444.5 51.9
Specialized Products 175.9 43.0 218.9 25.1
Intersegment eliminations (1.3)
Adjustment to LIFO method 7.9
----------------------------------------------
$3,370.4 $231.0 $3,601.4 $429.1
==============================================
1997
Residential Furnishings $1,617.4 $ 5.9 $1,623.3 $174.6
Commercial Furnishings 464.4 .3 464.7 85.3
Aluminum Products 441.4 - 441.4 44.6
Industrial Materials 259.7 180.1 439.8 43.5
Specialized Products 126.3 30.6 156.9 17.6
Intersegment eliminations .3
Adjustment to LIFO method (3.4)
---------------------------------------------
$2,909.2 $216.9 $3,126.1 $362.5
=============================================
1996
Residential Furnishings $1,428.4 $ 4.7 $1,433.1 $156.4
Commercial Furnishings 348.0 .4 348.4 65.3
Aluminum Products 345.8 - 345.8 30.2
Industrial Materials 241.0 160.7 401.7 38.3
Specialized Products 103.0 24.0 127.0 10.7
Intersegment eliminations (2.4)
Adjustment to LIFO method 5.7
Merger costs (26.6)
---------------------------------------------
$2,466.2 $189.8 $2,656.0 $277.6
==============================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Additions Acquired
to Property, Companies' Depreciation
Plant and Long-Lived and
Assets Equipment Assets Amortization
-------------------------------------------------------
<S> <C> <C> <C> <C>
1998
Residential Furnishings $ 983.1 $ 55.0 $ 64.7 $ 58.8
Commercial Furnishings 469.8 9.7 116.1 21.4
Aluminum Products 404.4 42.6 24.5 17.9
Industrial Materials 204.5 7.3 10.4 12.7
Specialized Products 176.7 27.5 4.6 8.1
Unallocated assets 285.9 5.5 9.0
Adjustment to year-end vs. average assets 10.9
-------------------------------------------------------
$2,535.3 $147.6 $220.3 $127.9
=======================================================
1997
Residential Furnishings $ 869.1 $ 41.5 $ 67.7 $ 49.9
Commercial Furnishings 315.0 13.3 75.7 15.4
Aluminum Products 353.3 23.9 11.1 13.6
Industrial Materials 179.9 18.3 2.8 11.5
Specialized Products 166.5 13.9 46.9 7.4
Unallocated assets 227.6 8.5 7.8
Adjustment to year-end vs. average assets (5.1)
-------------------------------------------------------
$2,106.3 $119.4 $204.2 $105.6
=======================================================
1996
Residential Furnishings $ 772.5 $ 39.3 $ 77.3 $ 43.5
Commercial Furnishings 192.6 14.6 49.1 10.9
Aluminum Products 301.6 18.7 4.9 15.3
Industrial Materials 168.5 9.3 8.6 10.5
Specialized Products 111.6 7.9 4.6 6.1
Unallocated assets 138.8 6.4 5.9
Adjustment to year-end vs. average assets 27.3
-------------------------------------------------------
$1,712.9 $ 96.2 $144.5 $ 92.2
=======================================================
</TABLE>
<PAGE>
Revenues from external customers, by product line, are as follows:
<TABLE>
<CAPTION>
Year ended December 31 1998 1997 1996
---------------------------------------
<S> <C> <C> <C>
Residential Furnishings
Bedding components $ 672.3 $ 596.3 $ 564.6
Residential furniture components 413.4 382.6 327.5
Finished & consumer products 466.1 419.3 377.5
Other residential furnishings products 248.7 219.2 158.8
---------------------------------------
1,800.5 1,617.4 1,428.4
Commercial Furnishings
Store displays, fixtures & storage products 369.7 236.9 138.0
Office furnishings & plastic components 253.6 227.5 210.0
---------------------------------------
623.3 464.4 348.0
Aluminum Products
Die cast products 423.3 355.3 272.8
Smelter, tool & die operations 77.8 86.1 73.0
---------------------------------------
501.1 441.4 345.8
Industrial Materials
Wire, wire products & steel tubing 269.6 259.7 241.0
Specialized Products
Automotive products & specialized machinery 175.9 126.3 103.0
---------------------------------------
$ 3,370.4 $ 2,909.2 $ 2,466.2
=======================================
</TABLE>
<PAGE>
The Company's operations outside of the United States are principally in Canada,
Europe and Mexico, none of which are individually material to its consolidated
operations. The geographic information that follows regarding sales is based on
the area of manufacture.
<TABLE>
<CAPTION>
Year ended December 31 1998 1997 1996
- ----------------------------------------------------------------------------
<S> <C> <C> <C>
External sales
United States $ 3,025.9 $ 2,636.6 $ 2,292.7
Foreign 344.5 272.6 173.5
---------------------------------------
$ 3,370.4 $ 2,909.2 $ 2,466.2
=======================================
Long-lived assets
United States $ 1,183.8 $ 989.2 $ 824.7
Foreign 214.4 172.5 124.9
---------------------------------------
$ 1,398.2 $ 1,161.7 $ 949.6
=======================================
</TABLE>
<PAGE>
L-Contingencies
The Company is involved in various legal proceedings including matters
which involve claims against the Company under employment, intellectual
property, environmental and other laws. One of the Company's subsidiaries is
involved in an unfair labor complaint filed by the National Labor Relations
Board prior to the Company's acquisition of the subsidiary. An administrative
decision has been rendered against the subsidiary, which has been upheld by the
courts. The Company is currently pursuing actions to resolve this matter.
When it appears probable in management's judgement that the Company will
incur monetary damages or other costs in connection with claims and proceedings,
and the costs can be reasonably estimated, appropriate liabilities are recorded
in the financial statements and charges are made against earnings. No claim or
proceeding has resulted in a material charge against earnings, nor are the total
liabilities recorded material to the Company's financial position. While the
results of any ultimate resolution cannot be predicted, management believes the
possibility of a material adverse effect on the Company's consolidated financial
position, results of operations and cash flows from claims and proceedings is
remote.
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of Leggett & Platt, Incorporated:
In our opinion, the financial statements listed in the index appearing
under Item 14 present fairly, in all material respects, the financial position
of Leggett & Platt, Incorporated and Subsidiaries at December 31, 1998 and 1997,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1998 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.
/s/ PricewaterhouseCoopers, LLP
St. Louis, Missouri
February 3, 1999
<PAGE>
Quarterly Summary of Earnings
Leggett & Platt, Incorporated and Subsidiaries
(Unaudited)
(Dollar amounts in millions, except per share data)
<TABLE>
<CAPTION>
Year ended December 31, 1998 First Second Third Fourth Total
- ---------------------------- ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Net sales $793.2 $855.4 $884.1 $837.7 $3,370.4
Gross profit 202.3 219.3 228.8 221.1 871.5
Earnings before income taxes 92.7 100.8 104.4 97.7 395.6
Net earnings 57.9 63.4 65.2 61.5 248.0
====== ====== ====== ====== ========
Earnings per share
Net earnings--basic $ .29 $ .32 $ .33 $ .31 $ 1.25
====== ====== ====== ====== ========
Net earnings--diluted $ .29 $ .32 $ .32 $ .31 $ 1.24
====== ====== ====== ====== ========
Year ended December 31, 1997
Net sales $673.2 $721.2 $747.0 $767.8 $2,909.2
Gross profit 170.2 183.4 188.5 195.7 737.8
Earnings before income taxes 78.1 83.9 83.9 87.4 333.3
Net earnings 48.4 52.0 52.8 55.1 208.3
====== ====== ====== ====== ========
Earnings per share
Net earnings--basic $ .26 $ .28 $ .27 $ .28 $ 1.09
====== ====== ====== ====== ========
Net earnings--diluted $ .26 $ .27 $ .27 $ .28 $ 1.08
====== ====== ====== ====== ========
</TABLE>
Previously reported per share data have been restated to reflect a two-for-one
stock split distributed on June 15, 1998.
<PAGE>
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(Amounts in millions)
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
-------- -------- -------- -------- --------
Additions
Charged
Balance at to Cost Balance at
Beginning of and End of
Description Period Expenses Deductions Period
----------- ------------ --------- ---------- ----------
<S> <C> <C> <C> <C>
Year ended December 31, 1998.......................
Allowance for doubtful receivables................. $ 11.5 $ 5.2 $ 3.2 (A) $ 13.5
============ ========= ========== ==========
Year ended December 31, 1997.......................
Allowance for doubtful receivables................. $ 8.6 $ 5.6 $ 2.7 (A) $ 11.5
============ ========= ========== ==========
Year ended December 31, 1996.......................
Allowance for doubtful receivables................. $ 7.5 $ 4.8 $ 3.7 (A) $ 8.6
============ ========= ========== ==========
</TABLE>
__________________
(A) Uncollectible accounts charged off, net of recoveries
<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.
LEGGETT & PLATT, INCORPORATED
/s/ HARRY M. CORNELL, JR.
By: ___________________________
Harry M. Cornell, Jr.
Chairman of the Board and
Chief Executive Officer
Dated: March 30, 1999
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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
(a) Principal Executive Officer:
/s/ HARRY M. CORNELL, JR. Chairman of the Board and March 30, 1999
----------------------------- Chief Executive Officer
Harry M. Cornell, Jr.
(b) Principal Financial Officer:
/s/ MICHAEL A. GLAUBER Senior Vice President, March 30, 1999
- ------------------------------ Finance & Administration
Michael A. Glauber
(c) Principal Accounting Officer:
/s/ ALLAN J. ROSS Vice President - Accounting March 30, 1999
- ------------------------------
Allan J. Ross
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
(c) Directors:
RAYMOND F. BENTELE * Director
-------------------------
Raymond F. Bentele
ROBERT TED ENLOE, III * Director
--------------------------
Robert Ted Enloe, III
RICHARD T. FISHER * Director
--------------------------
Richard T. Fisher
BOB L. GADDY * Director
--------------------------
Bob L. Gaddy
DAVID S. HAFFNER * Director
--------------------------
David S. Haffner
THOMAS A. HAYS * Director
--------------------------
Thomas A. Hays
ROBERT A. JEFFERIES, JR. * Director
--------------------------
Robert A. Jefferies, Jr.
ALEXANDER M. LEVINE * Director
--------------------------
Alexander M. Levine
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
RICHARD L. PEARSALL * Director
-------------------------
Richard L. Pearsall
DUANE W. POTTER * Director
--------------------------
Duane W. Potter
MAURICE E. PURNELL, JR. * Director
--------------------------
Maurice E. Purnell, Jr.
ALICE L. WALTON * Director
--------------------------
Alice L. Walton
FELIX E. WRIGHT * Director
--------------------------
Felix E. Wright
/s/ ERNEST C. JETT March 30, 1999
* By --------------------------
Ernest C. Jett
Attorney-in-Fact pursuant to Power of
Attorney dated February 10, 1999
</TABLE>
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. DOCUMENT DESCRIPTION PAGE NO.
- ----------- -------------------- -------
<C> <S> <C>
3.1 Restated Articles of Incorporation of the Company as of
May 13, 1987.
3.2 Amendment to Restated Articles of Incorporation of the
Company dated May 12, 1993.
3.3 By-Laws of the Company with all amendments through March
15, 1999.
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 effective February 15, 1999 between
Registrant and ChaseMellon Shareholder Services, LLC,
pertaining to preferred stock rights distributed by
Registrant, filed as Exhibit 1 to Registrant's Form 8-K
filed December 1, 1998 is incorporated by reference.
10.1(1) Restated and Amended Employment Agreement between Harry
M. Cornell, Jr. and Leggett & Platt, Incorporated dated
as of August 14, 1996, filed as Exhibit 10.1 to
Registrant's Form 10-K for the year ended December 31,
1996, is incorporated by reference.
10.2(1) Restated and Amended Employment Agreement between the
Company and Felix E. Wright dated March 1, 1999.
10.3(1) Employment Agreement between the Company and Robert A.
Jefferies, Jr. 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.
10.4(1) Severance Benefit Agreement between the Company and Harry M.
Cornell, Jr. dated May 9, 1984 filed as Exhibit 10.4 to
Registrant's Form 10-K for the year ended December 31, 1994,
is incorporated by reference.
10.5(1) Severance Benefit Agreement between the Company and Felix E.
Wright dated May 9, 1984 filed as Exhibit 10.5 to
Registrant's Form 10-K for the year ended December 31, 1994,
is incorporated by reference.
10.6(1) Severance Benefit Agreement between the Company and Robert A.
Jefferies, Jr. dated May 9, 1984 filed as Exhibit 10.6 to
Registrant's Form 10-K for the year ended December 31, 1994,
is incorporated by reference.
10.7(1) Reference is make to Appendix B to Registrant's definitive
Proxy Statement dated March 27, 1997 used in conjunction
with Registrant's Annual Meeting of Shareholders held on
May 14, 1997 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 to
Registrant's Form 10-K for the year ended December 31,
1993, is incorporated by reference.
</TABLE>
<PAGE>
<TABLE>
<C> <S>
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 to Registrant's Form 10-K
for the year ended December 31, 1991, which is incorporated
by reference.
10.10(1) Form of Indemnification Agreement approved by the
shareholders of Registrant and entered into between
Registrant and each of its directors and executive officers,
filed as Exhibit 10.10 to Registrants Form 10-K for the year
ended December 31, 1995, is incorporated by reference.
10.11(1) Reference is made to Appendix A to Registrant's definitive
Proxy Statement dated March 27, 1997 used in conjunction
with Registrant's Annual Meeting of Shareholders held on
May 14, 1997, for a copy of the Company's Director Stock
Option Plan, as amended, which is incorporated by reference.
10.12(1) 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 to
Registrant's Form 10-K for the year ended December 31, 1991,
is incorporated by reference.
10.13(1) Revised Employment Agreement between Bob L. Gaddy, Pace
Industries, Inc. and Leggett & Platt, Incorporated, filed
as Exhibit 10.13 to Registrant's Form 10-K for the year
ended December 31, 1996, is incorporated by reference.
10.14(1) Registrant's Stock Award Program filed as Exhibit 10.20 of
the Registrant's Form 10-K for the year ended December 31,
1997 is incorporated by reference.
10.15(1) The Company's Deferred Compensation Program.
10.16(1) The Company's Executive Deferred Stock Program.
10.17(1) Noncompetition Agreement, dated as of May 13, 1996 between
Bob L. Gaddy and Leggett & Platt, Incorporated, filed as
Exhibit 10.25 to Registrant's Form 10-K for the year
ended December 31, 1996, is incorporated by reference.
10.18(1) Pace Industries, Inc., Revised and Restated Employee
Incentive Compensation Plan, filed as Exhibit 10.27 to
Registrant's Form 10-K for the year ended December 31,
1996, is incorporated by reference.
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.
99 Power of Attorney executed by Robert G. Griffin appointing
attorneys-in-fact for purposes of filing reports under
Section 16(a) of the Securities Exchange Act of 1934.
</TABLE>
- -----------------
(1) Denotes management contract or compensatory plan or arrangement.
<PAGE>
EXHIBIT 3.1
RESTATED ARTICLES OF INCORPORATION
LEGGETT & PLATT, INCORPORATED
-- oOo --
ARTICLE I
The name of this corporation shall be "LEGGETT & PLATT, INCORPORATED."
ARTICLE II
The corporation has heretofore complied with the requirements of law as to
initial minimum capital, without which it could not have commenced business.
ARTICLE III
The aggregate number of shares which the corporation shall have the
authority to issue is One Hundred Million (100,000,000) shares of Common Stock
of One Dollar ($1.00) par value and One Hundred Million (100,000,000) shares of
Preferred Stock without par value.
1. Common Stock. The following is a statement of the designations,
preferences, limitations and relative rights in respect of the shares of the
Common Stock.
(a) Dividends. Subject to the prior and superior rights of the
Preferred Stock as set forth below and in any Directors' Resolution
(hereinafter defined), dividends may be paid on the Common Stock as and
when declared by the Board of Directors of the corporation out of any funds
of the corporation legally available for the payment thereof.
The corporation shall not issue fractional shares or script in
satisfaction of any stock dividend, but in lieu thereof shall pay in cash
an amount equal to such fraction multiplied by the current per share market
value of the class of stock on which the stock dividend is issued, as
determined by the Board of Directors.
(b) Dissolution. Subject to the prior and superior rights of the
Preferred Stock as set forth below and in any Directors' Resolution
(hereinafter defined), in the event of any liquidation, dissolution or
winding up of the affairs of the corporation, whether voluntary or
involuntary, the holders of Common Stock shall be entitled to share ratably
in the distribution of the assets of the corporation. Neither the
consolidation nor merger of the corporation into or with any other
corporation or corporations, nor merger of any other corporation into the
corporation, nor a reorganization of the corporation, nor the purchase or
redemption of all or part of the outstanding shares of any class or classes
of the stock of the corporation, nor a sale or transfer of the property and
business of the corporation as, or substantially as, an entity, shall be
deemed a liquidation, dissolution or winding up of the affairs of the
corporation within the meaning of any of the provisions of this paragraph.
<PAGE>
(c) Voting. Except as otherwise required by law, each share of Common
Stock shall have equal voting rights, each holder of such stock of the
corporation entitled to vote shall have one vote, in person or by proxy,
for each share thereof held, and all shares of the corporation, including
shares of Preferred Stock, shall be voted as a single class except where
specifically required by law to vote separately.
2. Preferred Stock. The Board of Directors is hereby authorized from time
to time to provide by resolution for the issuance of shares of Preferred Stock
in one or more classes and one or more series within any class not exceeding the
aggregate number of shares of Preferred Stock authorized by these Restated
Articles of Incorporation, as amended from time to time; and to determine with
respect to each such class or series the voting power, if any (which voting
powers if granted may be full or limited), designations, preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions appertaining thereto, including
without limiting the generality of the foregoing, the voting rights appertaining
to shares of Preferred Stock of any class or series, the rate of dividend to
which holders of Preferred Stock of any class or series may be entitled (which
may be cumulative or noncumulative), the rights of holders of Preferred Stock of
any class or series in the event of liquidation, dissolution or winding up of
the affairs of the corporation, and the rights (if any) of holders of Preferred
Stock of any class or series to convert or exchange such shares of Preferred
Stock of such class or series for shares of any other class or series of capital
stock of this corporation or any other corporation (including the determination
of the price or prices or the rate or rates applicable to such right to convert
or exchange and the adjustment thereof, the time or times during which the
rights to convert or exchange shall be applicable and the time or times during
which a particular price or rate shall be applicable).
Before the corporation shall issue any shares of Preferred Stock of any
class or series, a certificate setting forth a copy of the resolution or
resolutions of the Board of Directors, fixing the voting power, designations,
preferences, the relative, participating, optional or other rights, if any, and
the qualifications, limitations and restrictions, if any, appertaining to the
shares of Preferred Stock of such class or series, and the number of shares of
Preferred Stock of such class or series, authorized by the Board of Directors to
be issued shall be made and filed in accordance with applicable law.
3. Pre-emptive Rights. No holder of any stock of the corporation shall be
entitled as a matter of right to purchase or subscribe for any part of any stock
of the corporation, authorized by this Article III, or of any additional stock
of any class to be issued by reason of any increase of the authorized stock of
the corporation, or of any bonds, certificates of indebtedness, debentures or
other securities convertible into stock of the corporation, but any stock
authorized by this Article III or any such additional authorized issue of new
stock or of securities convertible into stock may be issued and disposed of by
the Board of Directors to such persons, firms, corporations or associations for
such consideration and upon such terms and in such manner as the Board of
Directors may in their discretion determine without offering any thereof on the
same terms or on any terms to the stockholders then of record or to any class of
stockholders.
4. Shareholders' Rights to Have Shares Redeemed in Certain Circumstances.
The following is a statement of the shareholders' rights to have shares of
Common Stock redeemed by the corporation in certain circumstances.
<PAGE>
(a) In the event that any person (Acquiring Person) (i) who is the
beneficial owner, directly or indirectly, of more than fifty per cent of
the shares of Common Stock outstanding becomes the beneficial owner,
directly or indirectly, of any additional shares of Common Stock pursuant
to a tender offer opposed by the Board of Directors of the corporation or
(ii) becomes the beneficial owner, directly or indirectly, of more than
fifty per cent of the shares of the Common Stock outstanding and any of
such shares of Common Stock were acquired pursuant to a tender offer
opposed by the Board of Directors of the Corporation, each holder of shares
of Common Stock, other than the Acquiring Person or a transferee of the
Acquiring Person, shall have the right until and including the forty-fifth
day following the date the notice to holders of shares of Common Stock
referred to in subsection (c) herein is mailed to have the shares of Common
Stock held by such holder redeemed by the corporation at the Redemption
Price determined as provided in subsection (d) herein, and each holder of
securities convertible into shares of Common Stock or of options, warrants,
or rights exercisable to acquire shares of Common Stock prior to such
forty-fifth day, other than the Acquiring Person or a transferee of the
Acquiring Person, shall have the right simultaneously with the conversion
of such securities or exercise of such options, warrants, or rights to
have the shares of Common Stock to be received thereupon by such holder
redeemed by the corporation at the Redemption Price.
(b) For purposes of this Section 4:
(1) A tender offer opposed by the Board of Directors of the corporation
shall mean a tender offer that the Board of Directors, acting pursuant to a
resolution approved by a majority of the Company's directors, recommends be
rejected by the shareholders of the corporation if such recommendation is
made by public announcement or written notice to the shareholders of the
corporation at any time on or before the expiration of such tender offer,
including all extensions and amendments thereof, and is not withdrawn by
public announcement or written notice to shareholders on or before such
expiration.
(2) The term "person" shall include an individual, a corporation,
partnership, trust or other entity. When two or more persons act as a
partnership, limited partnership, syndicate, or other group for the purpose
of acquiring shares of Common Stock of the corporation, such partnership,
syndicate or group shall be deemed a "person."
(3) For the purposes of determining whether a person is an Acquiring
Person, such person shall be deemed to beneficially own (i) all shares of
Common Stock with respect to which such person has the capability to
control or influence the voting power in respect thereof and (ii) all
shares of Common Stock which such person has the immediate or future right
to acquire, directly or indirectly, pursuant to agreements, through the
exercise of options, warrants or rights or through the conversion of
convertible securities or otherwise; and all shares of Common Stock which
such person has the right to acquire in such manner shall be deemed to be
outstanding shares, but shares of Common Stock which any other person has
the right to acquire in such manner shall not be deemed to be outstanding
shares.
(4) The term "tender offer," as used herein, shall mean a tender offer
within the meaning of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
<PAGE>
(5) Subject to the provisions of subsection (b) (2) herein, "outstanding
shares" shall mean shares of Common Stock which at the time in question
have been issued by the corporation and not reacquired and held or retired
by it or held by any subsidiary of the corporation.
(c) (1) Not later than twenty days following the date on which the
corporation receives reasonable notice that any person has become
an Acquiring Person (the "Record Date"), the corporation shall
give written notice (the "Shareholder Notice") by first class
mail, postage prepaid, at the addresses shown on the records of
the corporation, to each holder of record as of the Record Date
of:
(i) shares of Common Stock;
(ii) securities that are convertible into shares of Common Stock
immediately or within forty-five days following the Record Date; and
(iii) options, warrants or rights that are exercisable to acquire
shares of Common Stock immediately or within forty-five days following
the Record Date;
and shall advise all such holders of the right to have shares of Common
Stock redeemed and the procedure for such redemption. In the event that the
corporation fails to give the Shareholder Notice as required by subsection
(c), any holder entitled to receive such Shareholder Notice may within
sixty days thereafter serve written demand upon the corporation to give
such Shareholder Notice. If within twenty days after receipt of written
demand the corporation fails to give the required Shareholder Notice, such
holder may at the expense and on behalf of the corporation take such
reasonable action as may be appropriate to cause Shareholder Notice to be
given under this subsection (c).
(2) In the event shares of Common Stock are subject to redemption in
accordance with this Section 4, the Board of Directors of the corporation
shall designate a Redemption Agent, which shall be a corporation or
association (i) organized and doing business under the laws of the United
States or any State, (ii) subject to supervision or examination by Federal
or State authority, (iii) having combined capital and surplus of at least
$5,000,000 and (iv) having the power to exercise corporate trust powers.
(3) For a period of forty-five days from the date of the mailing of
the Shareholder Notice to persons entitled thereto pursuant to this
subsection (c), persons entitled to have shares of Common Stock redeemed
pursuant to this Section 4 may, at their option, deposit certificates
representing all or less than all shares of Common Stock held of record by
them with the Redemption Agent together with written notice that the holder
elects to have such shares redeemed pursuant to this Section 4. The Company
shall redeem all shares delivered for redemption allowable under Missouri
law, on a pro rata basis (except that no fractional shares shall be
redeemed), and the shares so redeemed shall no longer be considered
outstanding as of the close of business on the day certificates evidencing
such shares are deposited in proper form with the Redemption Agent. Any
shares not permitted to be redeemed under Missouri law shall be immediately
returned to the depositing shareholder and shall remain issued and
outstanding.
<PAGE>
(4) The corporation shall deposit in trust with the Redemption Agent,
as soon as possible, cash sufficient to pay the aggregate Redemption Price
of all of the shares of Common Stock redeemed.
(5) As soon as practicable after receipt by the Redemption Agent of
cash deposited by the corporation pursuant to subsection (4) immediately
above, the Redemption Agent shall issue its checks payable to the order of
the persons entitled to receive the Redemption Price of the shares of
Common Stock redeemed. If the amount of cash so received by the Redemption
Agent at any one time is not sufficient to pay the aggregate Redemption
Price to which all such persons are entitled, the Redemption Agent shall
pay each such person a pro rata part of the amount to which he is entitled.
(6) In the event the entire Redemption Price has not been paid for all
shares received by the Redemption Agent within thirty (30) days following
the last day shareholders are entitled to deposit shares for redemption as
provided in subsection (c) (3) hereof, then each shareholder who has not
received the full Redemption Price for any of such shares shall be entitled
to receive interest on the unpaid portion of the Redemption Price due him
at the rate of 18% per annum or the highest rate of interest allowed by
applicable law, whichever is less, from the expiration of said thirty (30)
day period until the Redemption Price is paid in full. All funds paid by
the Redemption Agent shall be allocated first to accrued and unpaid
interest and then to the Redemption Price.
(d) (1) The Redemption Price shall be the higher of (i) the highest price
paid by the Acquiring Person, including any commissions paid to brokers or
dealers for solicitation or other services, for any shares of Common Stock
pursuant to a tender offer that was made at any time by such Acquiring
Person and was opposed by the Board of Directors of the corporation; or
(ii) the highest market price per Common Share on the Record Date. For
purposes of subpart (i) of this subsection (d) (1), if the consideration
paid in any such acquisition of shares consisted, in whole or part, of
consideration other than cash, the Board of Directors of the corporation
shall take such action, as in its judgment it deems appropriate, to
establish the cash value of such consideration, but such valuation shall
not be less than the cash value, if any, ascribed to such consideration by
the Acquiring Person. For purposes of this subpart (ii) of subsection (d)
(1), the price on the Record Date shall be the highest sale price per
Common Share traded on the New York Stock Exchange or other national
securities exchange on the Record Date or, if Common Shares are not then
traded on a national securities exchange, the mean of the highest bid and
highest asked prices per Common Share quoted in the National Association of
Securities Dealers Automated Quotation System on the Record Date.
(2) The determinations to be made pursuant to this Section 4 shall be
made by the Board of Directors not later than the date of the Shareholder
Notice referred to in subsection (c) hereof. In making such determination,
the Board of Directors may engage such persons, including investment
banking firms and the independent accountants who have reported on the most
recent financial statements of the corporation, and utilize employees and
agents of the corporation who will, in the judgment of the Board of
Directors, be of assistance to the Board of Directors.
(3) The determinations to be made pursuant to this Section 4, when
made by the Board of Directors acting in good faith on the basis of such
information and assistance as was then reasonably available for such
purpose, shall be conclusive and binding upon the corporation and its
shareholders, including any person referred to in subsection (c) hereof.
<PAGE>
(e) This Section 4 of this Article III may be amended or repealed only
by the affirmative vote of the holders of at least eighty-five (85%) of the
outstanding shares of Common Stock of the corporation: provided, however,
that no amendment or repeal adopted after the Shareholder Notice under
subsection (c) hereof shall affect any such shares thereafter deposited
with the Redemption Agent in connection with such Shareholder Notice for
redemption pursuant to this Section 4.
5. Shareholder Voting Requirements for Approval of Mergers, Consolidations,
and Certain Dispositions of Assets of the Company. The affirmative vote of the
holders of at least two-thirds of the outstanding shares of the corporation
entitled to vote shall be required for the approval of (i) any merger or
consolidation of the corporation with or into any other corporation or entity;
(ii) any sale, lease or exchange or other disposition (other than by mortgage,
deed of trust or pledge), of all, or substantially all, property and assets,
with or without the goodwill, of the corporation, if not made in the usual and
regular course of its business; or (iii) any plan or agreement relating to any
transaction or agreement set forth in (i) or (ii) of this Section 5.
This Section 5 of this Article III shall be amended or repealed only by the
affirmative vote of the holders of at least two-thirds of the outstanding shares
entitled to vote on such amendment or repeal.
6. Miscellaneous. The corporation shall be entitled to treat the person in
whose name any share, right or option is registered as the owner thereof for all
purposes and shall not be bound to recognize any equitable or other claim to or
interest in such share, right or option on the part of any other person, whether
or not the corporation shall have notice thereof, save as may be expressly
provided by the laws of the State of Missouri.
A director shall be fully protected in relying in good faith upon the books
of account of the corporation or statements prepared by any of its officials as
to the value and amount of the assets, liabilities and/or net profits of the
corporation, or any other facts pertinent to the existence and amount of surplus
or other funds from which dividends might properly be declared and paid.
Without action by the stockholders, the shares of stock may be issued by
the corporation from time to time for such consideration (not less than the par
value thereof if such stock has a par value) as may be fixed from time to time
by the Board of Directors thereof, and any and all such shares so issued, the
full consideration for which has been paid or delivered, shall be deemed fully
paid stock and not liable to any further call or assessment thereon, and the
holder of such shares shall not be liable for any further call or assessment
thereon, or for any other payment thereon.
6. Shareholder Voting Requirements, Fairness of Certain Proposed Business
Combinations.
(a) Except as expressly provided in Section 6(b) hereof, no Business
Combination shall be consummated without first being approved by the affirmative
vote of 95% of the then outstanding Voting Stock voting together as a single
class. The affirmative vote required by this Section 6(a) is in addition to any
other affirmative vote required by law, these Restated Articles of
Incorporation, the By-Laws of the corporation or otherwise.
<PAGE>
(b) Section 6(a) hereof shall not apply to a Business Combination if all of
the conditions precedent specified in either Section 6(b)(1) or Section 6(b)(2)
are met prior to the consummation of such Business Combination.
(1) The Business Combination shall have been duly approved by a
majority of all of the Continuing Directors.
(2) All of conditions 6(b)(2)(i) through 6(b)(2)(v) shall have been
met.
(i) The amount of (X) cash or (Y) non-cash consideration to be
received per share by holders of Voting Stock (or each class of Voting
Stock separately, if applicable) in such proposed Business Combination
shall be at least equal to the highest amount determined under
6(b)(2)(i)(A), (B) and (C) below:
(A) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Shareholder for any share of such Voting Stock
acquired by it (X) within the two-year period immediately prior
to the first public announcement of the proposed Business
Combination (the "Announcement Date") or (Y) in the transaction
in which the Interested Shareholder became an Interested
Shareholder, whichever is higher;
(B) the Fair Market Value per share of such Voting Stock on
the Announcement Date or on the date on which the Interested
Shareholder became an Interested Shareholder (such latter date is
referred to in this Section 6 as the "Determination Date"),
whichever is higher, multiplied by the greater of one (1.0) or
the ratio of (X) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers'
fees) paid by the Interested Shareholder for any shares of such
Voting Stock acquired by it within the two-year period
immediately prior to the Announcement Date or in the transaction
in which the Interested Shareholder became an Interested
Shareholder, whichever is higher, to (Y) the Fair Market Value
per share of such Voting Stock on the first date in such two-year
period immediately prior to the Announcement Date on which the
Interested Shareholder acquired any such Voting Stock, or, in the
event the Interested Shareholder did not acquire any such Voting
Stock within such two-year period, the Fair Market Value per
share of such Voting Stock on the most recent date on which the
Interested Shareholder acquired any such Voting Stock; and
(C) the primary earnings per share of the Common Stock for
the four full consecutive fiscal quarters of the corporation
immediately preceding the Announcement Date multiplied by the
price/earnings ratio of the Interested Shareholder. For purposes
of this Section 6(b)(2)(i)(C) the "price/earnings ratio" shall be
the ratio of (X) the per share Fair Market Value of all
outstanding common stock of the Interested Shareholder on the
Announcement Date to (Y) the primary earnings per share
attributable to such common stock for the four full consecutive
quarters of the Interested Shareholder immediately preceding the
Announcement Date. If more than one Person constitutes the
Interested Shareholder, the price/earnings ratio of the Person
having the highest
<PAGE>
price/earnings ratio shall be used for the computation required
by this Section 6(b)(2)(i)(C). The Fair Market Value of non-cash
consideration shall be determined as of the date of the
consummation of the Business Combination.
(ii) The consideration to be received by holders of a particular
class of outstanding Voting Stock pursuant to the proposed Business
Combination shall be cash unless the Interested Shareholder acquired
all Voting Stock beneficially owned by such Interested Shareholder for
non-cash consideration. In such case, the consideration to be paid in
the proposed Business Combination shall be in the same form previously
paid by the Interested Shareholder for such Voting Stock.
(iii) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business
Combination:
(A) there shall have been no failure to declare and pay at
the regular date therefor any dividends (whether or not
cumulative) on any outstanding preferred stock of the
corporation, except as approved by a majority of all of the
Continuing Directors;
(B) there shall have been no reduction in the rate or
frequency of dividends paid on any class of common stock of the
corporation as compared to the practice of the corporation
immediately preceding the Determination Date (except as necessary
to reflect any subdivision of any class of such common stock or
to the extent necessary to comply with the provisions of any
applicable law) or except as approved by a majority of all of the
Continuing Directors;
(C) there shall have been an increase in such rate of
dividends as is necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of
reducing the number of outstanding shares of any class of common
stock of the corporation, unless the failure to increase such
annual rate is approved by a majority of all of the Continuing
Directors; and
(D) such Interested Shareholder shall not have become the
beneficial owner of any additional shares of Voting Stock except
to the extent necessary to fulfill contractual obligations
incurred in the transaction which resulted in such Interested
Shareholder becoming an Interested Shareholder so long as the
terms of such transaction are not amended or modified subsequent
to the Determination Date.
(iv) After the Determination Date, the Interested Shareholder
shall not have received the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances, guarantees,
pledges or other financial assistance, or any tax credits or other tax
advantages provided by the corporation, whether in anticipation of
such Business Combination or otherwise.
(v) A proxy or information statement describing the proposed
Business Combination containing the views of all of the Continuing
Directors and any investment advisor selected by a majority of all of
the Continuing Directors and complying with the
<PAGE>
requirements of the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing such
Act, rules or regulations) shall be mailed to shareholders of the
corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or subsequent
provisions).
(3) Notwithstanding this Section 6(b), any Business Combination
meeting the conditions precedent specified in Sections 6(b)(1) or 6(b)(2)
shall, nevertheless, proceed only upon receiving any affirmative vote
required by law, these Restated Articles of Incorporation, the By-Laws of
the corporation, or otherwise.
(c) Definitions for the purposes of this Section 6:
(1) "Affiliate." An "Affiliate" of, or a Person "affiliated" with, a
specific Person, means a Person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.
(2) "Announcement Date." See Section 6(b)(2)(i)(A).
(3) "Associate." The term "Associate" means:
(i) any corporation or organization (other than this corporation
or a Subsidiary of this corporation) of which a Person is an officer
of partner or is, directly or indirectly, the beneficial owner of ten
percent (10%) or more of any class of equity securities; or
(ii) any trust or other estate in which a Person has a
substantial beneficial interest or as to which a Person serves as
trustee or in a similar fiduciary capacity; or
(iii) any relative or spouse of a Person, or any relative of such
spouse, who has the same home as such Person; or
(iv) any investment company registered under the Investment
Company Act of 1940 for which a Person or any Affiliate of such Person
serves as investment advisor.
(4) "Beneficial Owner." A Person shall be a "Beneficial Owner" of any
Voting Stock:
(i) which a Person or any of its Affiliates or Associates
directly or indirectly, pursuant to any agreement, arrangement or
understanding, has or shares the power to vote or direct the voting of
or to dispose of or direct the disposition of; or
(ii) which such Person or any of its Affiliates or Associates has
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of any shares of
Voting Stock.
<PAGE>
(5) "Business Combination." Each of the following shall be deemed a
"Business Combination":
(i) any merger or consolidation of the corporation or of any
Subsidiary of the corporation with any Interested Shareholder or any
Affiliate of an Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to
or with any Interested Shareholder or any Affiliate or any Interested
Shareholder of any assets of the corporation or any subsidiary of the
corporation having an aggregate Fair Market Value of $5,000,000 or
more; or
(iii) any issuance or transfer by the corporation or any
Subsidiary of the corporation (in one transaction or a series of
transactions) of any securities of the corporation or any Subsidiary
of the corporation to any Interested Shareholder or any Affiliate of
any Interested Shareholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate Fair Market
Value of $5,000,000 or more; or
(iv) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation at any time during which there exists
an Interested Shareholder; or
(v) any reclassification of securities (including any reverse
stock split), or recapitalization of the corporation, or any merger or
consolidation of the corporation with any of its Subsidiaries or any
other transaction (whether or not with or into or otherwise involving
an Interested Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of Voting Stock which are beneficially owned by
any Interested Shareholder or any Affiliate of any Interested
Shareholder.
(6) "Continuing Director." The term "Continuing Director" shall
include any member of the Board of Directors of the corporation who was
serving as a director of the corporation on May 9, 1984 and the Successors
of any such member. For purposes of this Section 6(c)(6), a Successor shall
mean any director of the corporation elected subsequent to May 9, 1984
whose nomination or election was approved by the affirmative vote of a
majority of all of the Continuing Directors and previously qualified
Successors serving at the time of such vote. If at any time the number of
Continuing Directors shall be less than four (4) or one-third (1/3) of the
number of Continuing Directors serving on the Determination Date, whichever
is greater, it shall be deemed that no Continuing Directors exist;
provided, however, this sentence shall not apply to Section 6(b)(2)(v).
(7) "Determination Date." See Section 6(b)(2)(i)(B).
(8) "Fair Market Value." "Fair Market Value" shall mean:
(i) in the case of equity or debt securities, the closing sale
price on the date in question of such securities on the Composite Tape
for New York Stock Exchange-Listed Stocks, or, if such securities are
not quoted on the Composite Tape, on the New York
<PAGE>
Stock Exchange, or, if such securities are not listed on such
exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such
securities are listed, or, if such securities are not listed on any
such exchange, the highest closing bid quotation with respect to such
securities on the date in question on the National Association of
Securities Dealers, Inc. Automated Quotation System or any system then
in use, or, if no such quotations are available, the fair market value
on the date in question of such securities as determined by a majority
of all of the Continuing Directors or if no Continuing Directors are
then serving by a majority of all of the Board of Directors in good
faith; and
(ii) in the case of property other than equity or debt
securities, the fair market value of such property on the date in
question as determined in good faith by a majority of all of the
Continuing Directors or if no Continuing Directors are then serving by
a majority of all of the Board of Directors in good faith.
(9) "Interested Shareholder." An "Interested Shareholder" is any
Person which is the Beneficial Owner of ten percent (10%) or more of any
class of Voting Stock. The term "Interested Shareholder" shall never
include the corporation or any Subsidiary of the corporation. The term
"Interested Shareholder" shall also never include any fiduciary or trustee
for the employees of the corporation or its Subsidiaries acting pursuant to
any benefit plan or arrangement established by the corporation.
(10) "Person." The term "Person" shall mean any individual,
partnership, corporation, group or other entity. When two or more Persons
act as a partnership, limited partnership, syndicate, association or other
group for the purpose of acquiring, holding or disposing of shares of
stock, such partnership, syndicate, association or group shall be deemed a
"Person."
(11) "Subsidiary." The term "Subsidiary" shall mean any corporation or
other entity of which the Person in question owns at least 50% of any class
of equity securities, directly or indirectly.
(12) "Voting Stock." "Voting Stock" shall mean the Common Stock and
any other class of capital stock of the corporation which shall from time
to time be outstanding which is entitled to vote generally in the election
of directors.
(d) Nothing contained in this Section 6 shall be construed to relieve any
Interested Shareholder from any fiduciary obligation imposed by law.
(e) Notwithstanding any other provisions of these Restated Articles of
Incorporation or the By-Laws of the corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, these Restated Articles of
Incorporation, or the By-Laws of the corporation), the affirmative vote of the
holders of ninety-five percent (95%) or more of the shares of Voting Stock,
voting together as a single class, shall be required to amend, repeal, or adopt
any provisions inconsistent with, this Section 6; provided, however, that at any
time there does not exist an Interested Shareholder, this Section 6 may be
amended or repealed (or provisions may be adopted inconsistent with this Section
6) upon the affirmative vote of sixty percent (60%) or more of the outstanding
shares of Voting Stock, voting together as a single class.
<PAGE>
ARTICLE IV
This corporation reserves the right to amend, alter, change or repeal any
provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by law and all rights conferred on officers, directors and
shareholders herein are granted subject to this reservation.
ARTICLE V
The property and business of the corporation shall be controlled and
managed by a board of directors. The number of directors shall be fixed by, or
in the manner provided in, the bylaws; provided, however, the number of
directors shall be not less than three (3).
ARTICLE VI
The duration of the corporation is perpetual.
ARTICLE VII
The purposes for which this corporation is organized are as follows:
To design and manufacture products of every description fabricated
from various grades of ferrous and non-ferrous metals and their alloys and
to buy, sell and otherwise deal therein;
To manufacture, buy, sell, procure, distribute, market, exchange,
import, export and in any other manner deal in or deal with (as principal,
agent or otherwise) various spring, coil, wire, metal and other products of
various grades of ferrous and non-ferrous metals and their alloys, as well
as materials, parts, instruments, devices and other tools, parts,
components and supplies;
To manufacture, purchase, or otherwise acquire, invest in, own,
mortgage, pledge, lease, sell, assign and transfer or otherwise dispose of,
trade, deal in and deal with goods, wares and merchandise and personal
property of every class and description within or without the State of
Missouri;
To acquire by purchase, lease or otherwise erect, maintain, operate,
lease, mortgage and otherwise deal in and deal with real estate, buildings,
warehouses, storehouses, manufacturing plants, factories, machine shops and
any other structures and equipment necessary, useful or desirable for the
conduct of the business of this corporation;
To acquire the goodwill, rights and property and to undertake the
whole or any part of the assets and liabilities of any person, firm,
association or corporation; to pay for the same in cash, the stock of this
corporation, bonds, or otherwise; to hold or in any manner to dispose of
the whole or any part of the property so purchased; to conduct in any
lawful manner the whole or any part of any business so acquired and to
exercise all the powers necessary or convenient in and about the conduct
and management of such business;
<PAGE>
To enter into partnership or into any arrangement for sharing of
profits, union of interests, cooperation, joint adventure, reciprocal
concession or otherwise, with any person or corporation carrying on or
engaged in or about to carry on or engage in or any business or transaction
which the corporation is authorized to carry on or engage in, or any
business or transaction capable of being conducted so as directly or
indirectly to benefit the corporation; and, without banking or discount
privileges, to lend money to and/or guarantee the contracts of and payment
of the principal of and interest on any notes, debentures, bonds or other
evidences of indebtedness of any such person, corporation or entity, or
otherwise assist any such person or corporation, and to take or otherwise
acquire shares and securities of any such corporation, and to sell, hold,
reissue, with or without guaranty, or otherwise deal with the same;
To purchase or otherwise acquire, apply for, register, hold, use, sell
or in any manner dispose of and to grant licenses or other rights in and in
any manner deal with patents, inventions, improvements, processes,
formulas, trademarks, trade names, rights and licenses secured under
letters patent, copyrights or otherwise;
To enter into, make and perform contracts of every kind for any lawful
purpose with any person, firm, association or corporation, town, city,
county, body politic, state, territory, government or colony or dependency
thereof;
To borrow or raise moneys for any of the purposes of the corporation
and, from time to time without limit as to amount, to draw, make, accept,
endorse, execute and issue promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable or non-negotiable
instruments and evidences of indebtedness, and to secure the payment of any
thereof and of the interest thereon by mortgage upon or pledge, conveyance
or assignment in trust of the whole or any part of the property of the
corporation, whether at the time owned or thereafter acquired, and to sell,
pledge or otherwise dispose of such bonds or other obligations of the
corporation for its corporate purposes;
To purchase, hold, sell and transfer the shares of its own capital
stock, provided it shall not use its funds or property for the purchase of
its own shares of capital stock when such use would cause any impairment of
its capital except as otherwise permitted by law, and provided further that
shares of its own capital stock belonging to it shall not be voted upon
directly or indirectly;
To render general and special services and advice and to do all things
as may be necessary or convenient in carrying out any or all of the
foregoing purposes;
The objects and purposes specified herein shall be regarded as
independent objects and purposes and, except where otherwise expressed,
shall be in no way limited nor restricted by reference to or inference from
the terms of any other clause or paragraph of these Articles of
Incorporation;
The foregoing shall be construed both as objects and powers, and the
enumeration thereof shall not be held to limit or restrict in any manner
the general powers conferred on this corporation by the laws of the State
of Missouri.
<PAGE>
ARTICLE VIII
1. Right to Indemnification. Each person who was or is a director or
officer of the Corporation shall be indemnified by the Corporation as a matter
of right to the fullest extent permitted or authorized by applicable law and as
otherwise provided in this Article VIII. The term "applicable law" means (i)
Section 351.355 of The Missouri General and Business Corporation Law (other than
subsection 6 thereof and any other subsection comparable in purpose to
subsection 6) as in effect on May 7, 1986 and as thereafter amended (but in the
case of any such amendment, only to the extent such amendment permits the
Corporation to provide broader indemnification rights than The Missouri General
and Business Corporation Law permitted the Corporation to provide immediately
prior to such amendment) and (ii) any other statutory indemnification provision
adopted after May 7, 1986.
2. Right to Advance of Expenses. Expenses incurred by any person who was or
is a director or officer of the Corporation in defending any threatened, pending
or on-going action, suit or proceeding (whether civil, criminal, administrative
or investigative, including those by or in the right of the Corporation) shall
be promptly advanced by the Corporation when so requested by such person at any
time and from time to time, but only if the requesting person delivers to the
Corporation an undertaking to repay to the Corporation all amounts so advanced
if it should ultimately be determined that the requesting person is not entitled
to be indemnified by the Corporation under applicable law, this Article VIII,
and any by-law of the Corporation, agreement, vote of shareholders or
disinterested directors or otherwise.
3. Rights not Exclusive. The indemnification and other rights provided by
this Article shall not be deemed exclusive of any other rights to which a
director or officer may be entitled under any by-law, agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in such
person's official capacity and as to action in any other capacity while holding
the office of director or officer, and the Corporation is hereby specifically
authorized to provide such indemnification and other rights by any by-law,
agreement, vote of shareholders or disinterested directors or otherwise.
4. Insurance. The Corporation may purchase and maintain insurance on behalf
of any person who was or is a director, officer, employee or agent of the
Corporation, or was or is serving at the request of the Corporation as a
director, officer, employee or agent of another Corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against or
incurred by such person in any such capacity, or arising out of his or her
status as such, whether or not the Corporation would have the power to indemnify
such person against such liability under this Article VIII, the Corporation's
by-laws, agreement, vote of shareholders or disinterested directors or
otherwise.
5. Enforceability; Amendment. Each person who was or is a director or
officer of the Corporation and the heirs, executors, administrators and estate
of such person, is a third party beneficiary of this Article VIII and shall be
entitled to enforce against the Corporation all indemnification and other rights
granted to such person by applicable law and as otherwise provided in this
Article VIII.
This Article VIII may be hereafter amended or repealed; provided, however,
that no amendment or repeal shall reduce, terminate or otherwise adversely
affect the right of a person who was or is a director or officer to obtain
indemnification or an advance of expenses with respect to an action, suit or
proceeding that pertains to or arises out of actions or omissions that occur
prior to the later of (a) the effective date of such amendment or repeal; (b)
the expiration date of such person's then current term of
<PAGE>
office with, or service for, the Corporation (provided such person has a stated
term of office or service and completes such term); or (c) the effective date
such person resigns his office or terminates his service (provided such person
has a stated term of office or service but resigns prior to the expiration of
such term).
ARTICLE IX
1. In furtherance and not in limitation of the powers conferred by the laws
of the State of Missouri, the Board of Directors is expressly authorized:
To make, alter, amend and repeal the By-Laws;
To set apart out of any of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose and to alter or
abolish any such reserve;
To authorize and cause to be executed mortgages and liens upon the
property and franchises of this corporation;
To designate, by resolution passed by a majority of the whole Board,
an executive committee, to consist of two or more directors, which
committee, to the extent provided in such resolution or in the By-Laws of
the corporation, shall have and may exercise any or all of the powers of
the Board of Directors in the management of the business and affairs of
this corporation and have power to authorize the seal of this corporation
to be affixed to all papers which may require it;
Provided to the extent that any of the foregoing powers conflict with
any applicable statute of the State of Missouri, now or hereafter in
effect, such statute, to the extent of such conflict, shall be controlling.
To the extent permitted by the laws of the State of Missouri, this
corporation may in its By-Laws confer powers additional to the foregoing
upon the directors, in addition to the powers and authorities expressly
conferred upon them by law.
2. (a) Notwithstanding any other provisions of these Restated Articles of
Incorporation or the By-Laws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, these Restated Articles of
Incorporation, or the By-Laws of the Corporation), no Protected By-Law shall be
amended or repealed and no provision of the Corporation's By-Laws or these
Restated Articles of Incorporation inconsistent with any Protected By-Law, shall
be adopted at any time there exists a Substantial Shareholder without first
obtaining the approval of either (1) 80% or more of the then outstanding Voting
Stock voting together as a single class or (2) a majority of all of the
Continuing Directors.
(b) Definitions for purposes of this Section 2.
(1) "Affiliate." Affiliate shall have the same meaning as set forth in
Section 6(c)(1) of Article III of these Restated Articles of Incorporation.
(2) "Associate." Associate shall have the same meaning as set forth in
Section 6(c)(3) of Article III of these Restated Articles of Incorporation.
<PAGE>
(3) "Beneficial Owner." A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any Voting Stock:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly; provided,
however, that a Person shall not be deemed to beneficially own any
Voting Stock to the extent that the Person's beneficial ownership is
attributable solely to the Person's shared authority to direct the
disposition of Voting Stock beneficially owned by any mutual fund
registered as an investment company under the Investment Company Act
of 1940 in such Person's capacity as an investment advisor registered
with the Securities and Exchange Commission;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, Voting Stock tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until said
tendered Voting Stock is accepted for purchase; or (B) the right to
vote pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any Voting Stock if the agreement,
arrangement or understanding to vote such security, (1) arises solely
from a revocable proxy given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") and (2) is not also then
reportable on Schedule 13D pursuant to Section 13(d) of the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any Voting Stock of the Corporation.
(4) "Continuing Director." The term "Continuing Director" shall
include any member of the Board of Directors of the Corporation who was
serving as a director of the Corporation at the close of business on May 7,
1986, and the Successors of any such member. For purposes of this Section
2(b)(4), a Successor shall mean any director of the Corporation elected
subsequent to May 7, 1986 whose nomination or election was approved by the
affirmative vote of a majority of all of the Continuing Directors and
previously qualified Successors serving at the time of such vote. If at any
time the number of Continuing Directors shall be less than four (4) or
one-third (1/3) of the number of Continuing Directors serving on the
Determination Date, whichever is greater, it shall be deemed that no
Continuing Directors exist.
(5) "Determination Date." The day on which a Substantial Shareholder
first becomes a Substantial Shareholder.
(6) "Person." Person shall have the same meaning as set forth in
Section 6(c)(10) of Article III of these Restated Articles of
Incorporation.
<PAGE>
(7) "Protected By-Law." A "Protected By-Law" shall be any By-Law of
the Corporation designated as such by resolution duly adopted by the
Corporation's directors.
(8) "Subsidiary." Subsidiary shall have the same meaning as set forth
in Section 6(c)(11) of Article III of these Restated Articles of
Incorporation.
(9) "Substantial Shareholder." A Substantial Shareholder is any Person
which is the Beneficial Owner of twenty percent (20%) or more of any class
of Voting Stock. The term Substantial Shareholder shall never include the
Corporation or any subsidiary of the Corporation, any fiduciary or trustee
for the employees of the Corporation or its subsidiaries acting pursuant to
any benefit plan or arrangement established by the Corporation or any
subsidiary of the Corporation, or any such plan.
(10) "Voting Stock." Voting Stock shall have the same meaning as set
forth in Section 6(c)(12) of Article III of these Restated Articles of
Incorporation.
(c) Notwithstanding any other provisions of these Restated Articles of
Incorporation or the By-Laws of the Corporation (and notwithstanding the fact
that a lesser percentage may be specified by law, these Restated Articles of
Incorporation, or the By-Laws of the Corporation), the affirmative vote of
eighty percent (80%) or more of the shares of Voting Stock voting together as a
single class, shall be required to amend, repeal, or adopt any provisions
inconsistent with, this Section 2; provided, however, that at any time there
does not exist a Substantial Shareholder, this Section 2 may be amended or
repealed (or provisions may be adopted inconsistent with this Section 2) upon
the affirmative vote of sixty percent (60%) or more of the outstanding shares of
Voting Stock, voting together as a single class.
ARTICLE X
No contract or other transaction between the corporation and any other
corporation and no other act of the corporation shall, in the absence of fraud,
be invalidated or in any way affected by the fact that any of the directors of
the corporation are pecuniarily or otherwise interested in such contract,
transaction or other act, or are directors or officers of such other
corporation. The foregoing provision shall not be construed so as to relieve any
director of this corporation of any liability unless his interest in such
contract, transaction or other act shall have been disclosed or shall have been
known to the Board of Directors. Any director of the corporation, individually,
or any firm or association of which any such director may be a member, may be a
party to, or may be pecuniarily or otherwise interested in, any contract or
transaction of the corporation, provided that the fact that he individually or
such firm or association is so interested shall be disclosed or shall have been
known to the Board of Directors; and any director of the corporation who is a
director or officer of such other corporation or who is so interested may be
counted in determining the existence of a quorum at any meeting of the Board of
Directors which shall authorize any such contract or transaction, and may vote
thereat to authorize any such contract or transaction with like force and effect
as if he were not such director or officer of such other corporation or not so
interested, every director of the corporation being hereby relieved from any
disability which might otherwise prevent him from carrying out transactions with
or contracting with the corporation for the benefit of himself or any firm,
corporation, association, trust or organization in which or with which he may be
in anywise interested or connected.
<PAGE>
ARTICLE XI
The registered office of this corporation is 18th Road, Carthage, Missouri;
and the name and address of the present registered agent of this corporation is
R.A. Jefferies, Jr., 18th Road, Carthage, Missouri 64836.
ARTICLE XII
The names and places of residence of the incorporators of this corporation
are as follows:
<TABLE>
<CAPTION>
Name Place of Residence
---- ------------------
<S> <C>
William McMillan................................. Carthage, Missouri
Wm. K. Caffee.................................... Carthage, Missouri
J.P. Newell...................................... Carthage, Missouri
Kate M. Johns.................................... Carthage, Missouri
W.E. Hall........................................ Carthage, Missouri
R.E. Lister...................................... Carthage, Missouri
W.W. Bailey...................................... Carthage, Missouri
Robert Ornduff................................... Carthage, Missouri
J.P. Leggett..................................... Carthage, Missouri
G.D. Leggett..................................... Carthage, Missouri
C.B. Platt....................................... Carthage, Missouri
M. B. Parke...................................... Carthage, Missouri
E. O'Keefe....................................... Carthage, Missouri
M.J. McClurg..................................... Carthage, Missouri
Wm. E. Brinkerhoff............................... Carthage, Missouri
B.A. Mevey....................................... Carthage, Missouri
</TABLE>
<PAGE>
EXHIBIT 3.2
AMENDMENT OF RESTATED ARTICLES OF INCORPORATION
OF
LEGGETT & PLATT, INCORPORATED
To: Honorable Judith Moriarty
Secretary of State
State of Missouri
Jefferson City, MO 65101
Pursuant to the provisions of the General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
I.
The name of the corporation is Leggett & Platt, Incorporated. The name
under which it was originally organized was Leggett & Platt Spring Bed and
Manufacturing Company.
II.
One amendment to the Corporation's Restated Articles of Incorporation, as
amended, was adopted by the Corporation's shareholders on May 12, 1993.
III.
The amendment is as follows:
The introductory paragraph of Article III is amended to read in its
entirety as follows:
"The aggregate number of shares which the corporation shall have
the authority to issue is Three Hundred Million (300,000,000) shares
of Common Stock of One Cent ($.01) par value and One Hundred Million
(100,000,000) shares of Preferred Stock without par value."
IV.
The only class of the Corporation's securities entitled to vote on this
amendment was the Corporation's Common Stock, $1.00 par value. Of the
38,254,181 shares of Common Stock, $1.00 par value, issued and outstanding,
38,254,181 shares were entitled to vote on the amendment. No outstanding shares
of any class of securities were entitled to vote as a class on the amendment.
<PAGE>
V.
The number of shares of Common Stock, $1.00 par value, voted for and
against the amendment was as follows:
<TABLE>
<CAPTION>
No. of Shares No. of Shares No. of Shares
Voted For Voted Against Abstained
- ------------- ------------- -------------
<S> <C> <C>
24,367,853 5,975,126 238,454
</TABLE>
IN WITNESS WHEREOF, the undersigned, Thomas D. Sherman, Vice President of
Leggett & Platt, Incorporated, has executed this instrument and John A. Lyckman,
Assistant Secretary of Leggett & Platt, Incorporated, has affixed its corporate
seal hereto and attested said seal on the 12th day of May, 1993.
(CORPORATE SEAL) LEGGETT & PLATT, INCORPORATED
ATTEST:
/s/ JOHN A. LYCKMAN /s/ THOMAS D. SHERMAN
- --------------------------------- ----------------------------------
John A. Lyckman Thomas D. Sherman
Assistant Secretary Vice President
STATE OF MISSOURI )
) ss.
COUNTY OF NEWTON )
I, Cindy A. Adams, a notary public, do hereby certify that on this 12th day
of May, 1993, personally appeared before me Thomas D. Sherman, who being by me
first duly sworn, declared that he is the Vice President of Leggett & Platt,
Incorporated, that he signed the foregoing document as Vice President of the
Corporation, and that the statements therein contained are true.
/s/ CINDY A. ADAMS
----------------------------------
Cindy A. Adams, Notary Public
My Commission Expires: June 13, 1993
<PAGE>
Exhibit 3.3
TABLE OF CONTENTS
OF BY-LAWS
OF
LEGGETT & PLATT, INCORPORATED
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 1...................................................................... 1
MEETINGS OF SHAREHOLDERS.................................................. 1
Section 1.1 Annual Meeting - Date, Place and Time................... 1
Section 1.2 Proper Business at Annual Meetings...................... 1
Section 1.3 Special Meetings........................................ 2
Section 1.4 Quorum.................................................. 2
Section 1.5 Qualification of Voters................................. 2
Section 1.6 No Cumulative Voting.................................... 2
Section 1.7 Procedure............................................... 2
Section 1.8 Certification of Votes.................................. 2
Section 1.9 Transmittal of Notices.................................. 2
ARTICLE 2...................................................................... 3
DIRECTORS................................................................. 3
Section 2.1 Number, Election & Removal.............................. 4
Section 2.2 Qualification........................................... 3
Section 2.3 Regular and Special Directors' Meetings................. 4
Section 2.4 Committees.............................................. 4
Section 2.5 Compensation of Directors............................... 4
Section 2.6 Honorary Directors...................................... 5
ARTICLE 3...................................................................... 6
OFFICERS.................................................................. 6
Section 3.1 Officers................................................ 6
Section 3.2 Removal................................................. 6
ARTICLE 4...................................................................... 7
CERTIFICATES FOR SHARES................................................... 7
Section 4.1 Issuance of Certificates................................ 7
Section 4.2 Lost or Destroyed Certificate........................... 7
Section 4.3 Certificate Cancellation................................ 7
Section 4.4 Registered Owner........................................ 7
ARTICLE 5...................................................................... 8
INDEMNIFICATION........................................................... 8
Section 5.1 Right of Directors and Officers to Indemnification...... 8
Section 5.2 Indemnification of Employees, Agents, Etc............... 8
Section 5.3 Right of Directors and Officers to Advance of Expenses.. 8
Section 5.4 Right of Claimant to Bring Suit......................... 9
Section 5.5 Definitions............................................. 9
Section 5.6 Rights Not Exclusive.................................... 9
Section 5.7 Insurance............................................... 9
Section 5.8 Enforceability; Amendment............................... 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
ARTICLE 6...................................................................... 11
GENERAL PROVISIONS........................................................ 11
Section 6.1 Dividends............................................... 11
Section 6.2 Reserves................................................ 11
Section 6.3 Fiscal Year............................................. 11
Section 6.4 Corporate Seal.......................................... 11
Section 6.5 Examination of Books.................................... 11
Section 6.6 Amendments.............................................. 11
</TABLE>
<PAGE>
BY-LAWS
OF
LEGGETT & PLATT, INCORPORATED
ARTICLE 1
MEETINGS OF SHAREHOLDERS
------------------------
Section 1.1 Annual Meeting - Date, Place and Time. The annual meeting of
the shareholders for the election of Directors and for the transaction of such
other business as may properly come before the meeting shall be held on such
date as the Board of Directors shall fix each year. The date of such meeting
shall not be earlier than April 1 and not later than September 30 in each year.
Each such annual meeting shall be held at such place, within or without the
State of Missouri, and hour as shall be determined by the Board of Directors.
Section 1.2 Proper Business at Annual Meetings. At an annual meeting of the
shareholders, only such business shall be conducted as shall have been properly
brought before the meeting. To be properly brought before an annual meeting,
business must be (a) specified in the notice of meeting (or any supplement
thereto) given by or at the direction of the Board of Directors, (b) otherwise
properly brought before the meeting by or at the direction of the Board of
Directors, or (c) otherwise properly brought before the meeting by a
shareholder.
For business to be properly brought before an annual meeting by a
shareholder, such business proposed to be conducted must be, under the law, an
appropriate subject for shareholder action, and the shareholder must have given
timely notice thereof in writing to the Secretary of the Corporation. To be
timely, a shareholder's notice must be delivered to or mailed and received at
the principal executive offices of the Corporation not less than forty days nor
more than seventy days prior to the meeting; provided, however, that in the
event that less than fifty days' notice or prior public disclosure of the date
of the meeting is given or made to shareholders, notice by the shareholder to be
timely must be so received not later than the close of business on the tenth day
following the date on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder proposes to bring
before the annual meeting (a) a brief description of the business desired to be
brought before the annual meeting, (b) the name and address, as they appear on
the Corporation's books, of the shareholder proposing such business, (c) the
class and number of shares of the Corporation which are beneficially owned by
the shareholder, (d) any material interest of the shareholder in such business
and (e) such other information with respect to such matter and the shareholder
proposing such matter as would be required to be included in a proxy statement
filed pursuant to the proxy rules of the Securities and Exchange Commission.
Notwithstanding anything in the By-Laws to the contrary, no business shall
be conducted at an annual meeting except in accordance with the procedures set
forth in this Section. The presiding officer of an annual meeting shall, if the
facts warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the provisions of
this Section, and if he should so determine, he shall so declare to the meeting,
and any such business not properly brought before the meeting shall not be
transacted. The presiding officer of a meeting shall have sole, absolute and
complete authority and discretion to decide questions of compliance with the
foregoing procedures, and his ruling thereon shall be final and conclusive.
1
<PAGE>
Section 1.3 Special Meetings. Except as otherwise required by law, special
meetings of the shareholders may be called only by the Chairman of the Board,
the President or the Board of Directors. Business transacted at any special
meeting shall be confined to the purposes stated in the notice thereof.
Section 1.4 Quorum. Except as otherwise required by law, the Restated
Articles of Incorporation or these By-Laws, the holders of a majority of the
shares entitled to vote at any meeting of the shareholders, present in person or
by proxy, shall constitute a quorum and the act of the majority of such quorum
shall be deemed the act of the shareholders.
If a quorum shall fail to attend any meeting, the presiding officer of the
meeting may adjourn the meeting to another place, date or time not longer than
ninety days after such adjournment.
At such adjourned meeting as which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 1.5 Qualification of Voters. The Board of Directors, in accordance
with applicable law, may fix a record day prior to the day of holding any
meeting of the shareholders as the time as of which the shareholders entitled to
notice of and to vote at such meeting shall be determined. Only those persons
who are holders of record of voting stock on any record date fixed by the Board
of Directors shall be entitled to notice of, to attend and to vote at such
meeting.
Section 1.6 No Cumulative Voting. Shareholders do not have the right to
cumulate their votes in any manner in connection with the election of Directors.
Section 1.7 Procedure. The Chairman of the Board, or in his absence the
President or in his absence the Secretary of the Corporation, shall preside at
an annual or special meeting of the shareholders. In the absence of all of the
above named officers, the Board of Directors shall select the person to preside
at any meeting of the shareholders. It shall be the duty of such presiding
officer to preserve order and insure that the meeting is conducted in a
businesslike and proper manner. The presiding officer shall have all sole,
complete and absolute authority necessary to fully carry out his duties,
including, without limitation, the power to postpone or adjourn the meeting from
time to time if in his discretion such action is necessary or advisable to
insure order, seek and receive advice of counsel, insure fair and complete
voting or otherwise. The ruling of the presiding officer on any matter shall be
final and conclusive. The presiding officer shall establish the order of
business and such rules and procedures for the conduct of the meeting as in his
sole, absolute and complete discretion he determines appropriate under the
circumstances.
Section 1.8 Certification of Votes . If the object of a shareholders'
meeting be to elect Directors or to take a vote of the shareholders on any
proposition, then the Chairman of the Board or, in his absence, the President or
other person presiding at such meeting shall appoint not less than two persons,
who are not Directors, inspectors to receive and canvass the votes given at such
meeting and certify the result to him.
Section 1.9 Transmittal of Notices. Except as provided otherwise in the By-
Laws, notices to Shareholders shall be in writing and may be delivered in any
reasonable manner including, but not limited to, U.S. mail, private courier,
facsimile transmission, telex, telegram and hand delivery.
Notice by U.S. mail or private courier shall be deemed given when deposited
with the postal service or courier. Notice by facsimile, telex or telegram
shall be deemed given when transmitted.
2
<PAGE>
ARTICLE 2.
DIRECTORS
---------
Section 2.1 Number, Election & Removal. The whole Board of Directors shall
consist of not less than three nor more than fifteen members, the exact number
to be set from time to time by the Board of Directors. No decrease in the number
of Directors shall shorten the term of any incumbent Director. In absence of the
Board of Directors setting the number of directors, the number shall be eleven.
The Directors shall be elected at the annual meeting of the shareholders, except
as provided in Section 2.2 hereof, and each Director elected shall hold office
until his successor is elected and qualified. Any Director or Directors may be
removed only for cause and then only by the holders of a majority of the shares
entitled to vote at an election of Directors, represented in person or by proxy,
at any duly constituted meeting of the shareholders called for the purpose of
removing any such Director or Directors.
Nominations for the election of Directors at any meeting of shareholders
may be made by the Board of Directors or by any shareholder entitled to vote in
the election of Directors generally. However, any shareholder entitled to vote
in the election of Directors generally may nominate one or more persons for
election as Directors at a meeting only if written notice of such shareholder's
intent to make such nomination or nominations has been given, either by personal
delivery or by United States certified mail, return receipt requested, postage
prepaid, to the Secretary of the Corporation not later than (i) with respect to
an election to be held at an annual meeting of shareholders, ninety days prior
to the anniversary date of the previous year's annual meeting, and (ii) with
respect to an election to be held at a special meeting of the shareholders for
the election of Directors, the close of business on the tenth day following the
date on which notice of such meeting is first given to shareholders. Each such
notice shall set forth: (a) the name, address and principal occupation of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the shareholder is a holder of record of
stock of the Corporation entitled to vote at such meeting, together with the
class and number of such shares, and intends to appear in person or by proxy at
the meeting to nominate the person or persons specified in the notice; (c) a
description of all arrangements or understandings between the shareholder and
each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; (d) such other information regarding such shareholder and each
nominee proposed by such shareholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission; and (e) the consent of each nominee to serve as a Director of the
Corporation if so elected. The Corporation may require any proposed nominee to
furnish such other information as may be reasonably required by the Corporation
to determine the eligibility of such proposed nominee to serve as a Director of
the Corporation. No person shall be eligible for election as a Director of the
Corporation unless nominated in accordance with the procedures set forth herein.
The presiding officer of a meeting shall, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
procedures prescribed by the By-Laws, and if he should so determine, he shall so
declare to the meeting, and the defective nomination shall be disregarded. The
presiding officer of a meeting shall have sole, absolute and complete authority
and discretion to decide questions of compliance with the foregoing procedures,
and his ruling thereon shall be final and conclusive.
Section 2.2 Qualification. Each Director upon reaching his seventieth
birthday shall not thereafter stand for election to the Board of Directors at
any meeting of shareholders. The application of this paragraph may be waived by
the Board of Directors upon special request by the Chairman of the Board or the
President.
3
<PAGE>
No person shall be qualified to be elected and to hold office as a Director
if such person is determined by a majority of the whole Board to have acted in a
manner contrary to the best interests of the Corporation, including, but not
limited to, violation of either State or Federal law, maintenance of interests
not properly authorized and in conflict with the interests of the Corporation,
or breach of any agreement between such Director and the Corporation relating to
such Director's services as a Director, employee or agent of the Corporation.
Section 2.3 Regular and Special Directors' Meetings. Regular meetings of
the Board of Directors may be held at such time and at such place as shall from
time to time be determined by the Board. Special meetings of the Board of
Directors may be called by the Chairman of the Board of Directors or the
President, and shall be called by the Secretary on the written request of two or
more Directors.
No notice of regular meetings of the Board of Directors need be given.
At least three days prior notice of any special meeting of the Board of
Directors shall be given to each Director.
Notwithstanding the provisions of the immediately preceding paragraph of
the section, the Chairman of the Board, the President, or the Secretary on the
written request of two or more Directors may call a special meeting of the Board
of Directors upon notice by telephone, telex, telegram, facsimile transmission
or other means not later than the day preceding the date of the meeting.
Section 2.4 Committees. The Directors at any time may elect from their
number an executive committee, audit committee, compensation committee and other
committees, each of which shall consist of not less than two Directors. Each
such committee shall have such powers and duties as shall be delegated to it by
the Board of Directors. Each member of such committee shall hold office at the
pleasure of the Directors and may be removed by the Directors at any time with
or without cause. Vacancies occurring in any committee may be filled by the
Directors. During any vacancy on a committee, the remaining members shall have
full power to act as the committee. Each committee may prescribe its own rules
for calling and holding meetings and its method of procedure, subject, however,
to any rules prescribed by the Directors, and, if no such rules shall have been
prescribed, the rules applicable to calling and holding of Directors' meeting
shall apply to the committee meetings. A quorum for any meeting of a committee
shall consist of not less than a majority of the members in office at the time
and at each meeting of the committee at which a quorum is present, all questions
and business shall be determined by the affirmative vote of not less than a
majority of the members present. Except as the executive committee's powers and
duties may be limited or otherwise prescribed by the Directors, the executive
committee, during the intervals between the meetings of the Directors, shall
possess and may exercise all of the powers of the Directors in the management
and control of the business and property of the Corporation; including but not
limited to the power and authority to authorize the issuance or sale of the
stock of the Corporation.
The foregoing notwithstanding, no committee shall be empowered to elect
Directors to fill vacancies among the Directors or on any committee of the
Directors. Subject to said exceptions, persons dealing with the Corporation
shall be entitled to rely upon any action of a committee with the same force and
effect as though such action had been taken by the Directors. Subject to the
rights of third persons, any action of a committee shall be subject to revision
or alteration by the Directors.
4
<PAGE>
Section 2.5 Compensation of Directors. Directors and members of any
committee of the Board of Directors shall be entitled to such reasonable
compensation and fees for their services as such as shall be fixed from time to
time by resolution of the Board of Directors and shall also be entitled to
reimbursement for any reasonable expenses incurred in attending meetings of the
Board of Directors and any Committee thereof; provided, that nothing herein
contained shall be construed to preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.
Section 2.6 Honorary Directors. In addition to the Directors of the
Corporation, there may be as many Honorary or Advisory Directors and Directors
Emeritus as the Board of Directors may appoint. Honorary or Advisory Directors
and Directors Emeritus shall have no liability after they become such for the
actions of the Board of Directors and shall not be required to attend any
meeting of the Board of Directors, but shall be notified of all meetings of the
Board of Directors in the same manner as the Directors, and if in attendance at
such meetings, shall have all the rights and privileges of Directors, except the
right to vote on matters before such meetings.
ARTICLE 3.
OFFICERS
--------
Section 3.1 Officers. The principal executive officers of the Corporation
shall be the Chairman of the Board, the President, one or more Vice Presidents
(who may also be called executive vice president, senior executive vice
president, group vice president, division vice president or the like), a
Secretary and a Treasurer, all of which shall be elected by the Board of
Directors. The Board may elect, or the Chairman of the Board may appoint, such
other officers (including vice presidents and assistant or associate officers),
as may be deemed necessary or appropriate from time to time. Such officers may
include, but shall not be limited to, a chief financial officer, a general
counsel, controller and director of internal audit. Any two or more offices may
be held by the same person.
The officers of the Corporation shall have such authority and shall perform
such duties as are customarily incident to their respective offices or as shall
be specified from time to time by the Board of Directors or the Chairman of the
Board, regardless of whether such authority and duties are customarily incident
to such office.
Section 3.2 Removal. Any officer may be removed by the Board of Directors
or the Chairman of the Board at any time, with or without cause, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer shall not of itself create
contract rights.
ARTICLE 4.
CERTIFICATES FOR SHARES
-----------------------
Section 4.1 Issuance of Certificates. The Corporation shall deliver
certificates representing all shares to which shareholders are entitled. Such
certificates shall be signed by the Chairman of the Board or the President, and
the Secretary or an Assistant Secretary of the Corporation, and may be sealed
with the seal of the Corporation or a facsimile thereof. Each certificate
representing shares shall state upon the face thereof that the Corporation is
organized under the laws of the State of Missouri, the name of the person to
whom issued, the number and class and the designation of the series, if any,
which such certificate represents, and the par value of each share represented
by such certificate or a statement that the shares are without par value.
5
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Section 4.2 Lost or Destroyed Certificate. The Corporation, acting through
any of its duly authorized officers or other duly authorized employees, may
direct a new certificate or certificates to be issued in place of any
certificate or certificates previously issued by the Corporation alleged to have
been lost or destroyed, upon the filing of an affidavit of that fact by the
person claiming the certificate to be lost or destroyed. When authorizing such
issue of a new certificate or certificates, the Corporation may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or the owner's
legal representative, to advertise the same in such manner as the Corporation
shall require and/or to give the Corporation a bond in such sum as the
Corporation may direct as indemnity against any claim that may be made against
the Corporation with respect to the certificate alleged to have been lost or
destroyed.
Section 4.3 Certificate Cancellation. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, to cancel the old certificate, and to record the
transaction upon its books.
Section 4.4 Registered Owner. The Corporation shall be entitled to
recognize the exclusive rights of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Missouri.
ARTICLE 5.
INDEMNIFICATION
---------------
Section 5.1 Right of Directors and Officers to Indemnification. Each person
who was or is a Director or officer of the Corporation shall be indemnified by
the Corporation as a matter of right to the fullest extent permitted or
authorized by applicable law and as otherwise provided in Article VIII of the
Corporation's Articles of Incorporation.
The indemnification described in the preceding paragraph of this Article 5
shall pertain to all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person who
was or is a party to or who was or is involved in any proceeding by reason of
acts or omissions:
(a) in such person's capacity as or arising out of such person's status as
(i) a Director or officer of the Corporation; or (ii) a Director, officer,
employee or agent of another Corporation, partnership, joint venture, trust
or other enterprise when so serving at the request of the Corporation; or
(b) in any other capacity while holding the office of either Director or
officer of the Corporation.
Section 5.2 Indemnification of Employees, Agents, Etc. Each person who was
or is an employee or agent of the Corporation, or who was or is serving at the
request of the Corporation as a Director, officer, employee or agent of another
Corporation, partnership, joint venture, trust or other
6
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enterprise (including the heirs, executors, administrators or estate of each
such person) may, at the discretion of the Board of Directors, be indemnified by
the Corporation to the same extent as provided herein with respect to any person
who was or is a Director or officer of the Corporation.
Section 5.3 Right of Directors and Officers to Advance of Expenses.
Expenses (including attorneys' fees) incurred by any person who was or is a
Director or officer of the Corporation in defending any proceeding (including
those by or in the right of the Corporation) shall be promptly advanced by the
Corporation when so requested by such person at any time and from time to time,
but only if the requesting person delivers to the Corporation an undertaking to
repay to the Corporation all amounts so advanced if it should ultimately be
determined that the requesting person is not entitled to be indemnified by the
Corporation under the indemnification sources as defined below, agreement,
vote of shareholders or disinterested Directors or otherwise.
Section 5.4 Right of Claimant to Bring Suit. If a claim for indemnification
under Section 5.1 or 5.3, respectively, is not paid in full by the Corporation
within 90 or 15 days, respectively, after a written claim has been received by
the Corporation, the claimant may bring suit against the Corporation to recover
the unpaid amount of the claim. If the claimant is successful in whole or in
part in such suit, the claimant shall also be paid the expense of prosecuting
such claim.
It shall be a defense to any suit seeking indemnification under Section 5.1
of these By-Laws that the claimant has not met the standards of conduct which
make it permissible (under indemnification sources, agreement, vote of
shareholders or disinterested Directors or otherwise) for the Corporation to
indemnify the claimant. The failure of the Corporation (through its Directors,
independent legal counsel or shareholders) to make a determination before the
commencement of such suit that indemnification of the claimant is proper under
the circumstances (because the claimant has met the applicable standard of
conduct) shall not be a defense to the claimant's action or create a presumption
that the claimant has not met the applicable standard of conduct. Similarly, an
actual determination by the Corporation that the claimant has not met such
applicable standard of conduct, shall not be a defense to the claimant's action
nor create a presumption that the claimant has not met the applicable standard
of conduct.
Section 5.5 Definitions. In this Article the following terms have the
following meanings:
(a) The term "applicable law" means (i) Section 351.355 of The Missouri General
and Business Corporation Law (other than Subsection 6 thereof and any other
Subsection comparable in purpose to Subsection 6) as in effect on May 7, 1986
and as thereafter amended (but in the case of any such amendment, only to the
extent such amendment permits the Corporation to provide broader indemnification
rights than The Missouri General and Business Corporation Law permitted the
Corporation to provide immediately prior to such amendment) and (ii) any other
statutory indemnification provisions adopted after May 7, 1986.
(b) The term "Directors" or "officers" of the Corporation shall include the
heirs, executors, administrators and estate of each such person who was a
Director or officer, which heirs, executors, administrators and estate shall
succeed to all of the indemnification and other rights of such Director or
officer.
(c) The term "proceedings" shall mean any threatened, pending or completed
action, suit or other proceeding (including those by or in the right of the
Corporation) whether civil, criminal, administrative or investigative.
7
<PAGE>
(d) The term "fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan.
(e) The term "indemnification sources" shall refer jointly and severally to
applicable law as defined above, this Article 5 and Article VIII of the
Corporation's Restated Articles of Incorporation.
(f) The term "other enterprise" shall include employee benefit plans.
(g) The term "serving at the request of the Corporation" shall include any
service as a Director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by, such Director, officer, employee or
agent with respect to any employee benefit plan, its participants or
beneficiaries.
Section 5.6 Rights Not Exclusive. The indemnification and other rights
provided by this Article and the other indemnification sources shall not be
deemed exclusive of any other rights to which a Director or officer may be
entitled under any agreement, vote of shareholders or disinterested Directors or
otherwise, both as to action in such person's official capacity and as to action
in any other capacity while holding the office of Director or officer, and the
Corporation may, at its discretion, provide such indemnification and other
rights by any agreements, vote of shareholders or disinterested Directors or
otherwise.
Section 5.7 Insurance. The Corporation may purchase and maintain insurance
on behalf of any person who was or is a Director, officer, employee or agent of
the Corporation, or was or is serving at the request of the Corporation as a
Director, officer, employee or agent of another Corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against or
incurred by such person in any such capacity, or arising out of his or her
status as such, whether or not the Corporation would have the power to indemnify
such person against such liability under these By-Laws, other indemnification
sources, agreement, vote of shareholders or disinterested Directors or
otherwise.
Section 5.8 Enforceability; Amendment. Each person who was or is a Director
or officer of the Corporation is a third party beneficiary of this Article 5 and
shall be entitled to enforce against the Corporation all indemnification and
other rights provided or contemplated by this Article 5.
This Article 5 may be hereafter amended or repealed; provided, however, no
such amendment or repeal shall reduce, terminate or otherwise adversely affect
the right of any person who was or is a Director or officer (i) to obtain
indemnification or an advance of expenses with respect to a proceeding that
pertains to or arises out of actions or omissions that occurred prior to the
"Deadline Indemnification Date" as defined in the next paragraph of this
Section, or (ii) to bring suit with respect to the foregoing under this Section
5.4 hereof.
The term "Deadline Indemnification Date" means the later of (a) the
effective date of any amendment or repeal of this Article 5 which reduces,
terminates or otherwise adversely affects the rights hereunder of any person who
was or is a Director or officer; (b) the expiration date of such person's then
current term of office with, or service for, the Corporation (provided such
person has a stated term of office or service and completes such term); or (c)
the effective date such person resigns his office or terminates his service
(provided such person has a stated term of office or service but resigns prior
to the expiration of such term).
8
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ARTICLE 6.
GENERAL PROVISIONS
------------------
Section 6.1 Dividends. The Board of Directors may declare and the
Corporation may pay dividends on its outstanding shares in cash, property, or
its own shares pursuant to law and subject to the provisions of its Restated
Articles of Incorporation.
Section 6.2 Reserves. The Board of Directors may by resolution create a
reserve or reserves out of earned surplus for any purpose or purposes, and may
abolish any such reserve in the same manner.
Section 6.3 Fiscal Year. The fiscal year of the Corporation shall be fixed
by resolution of the Board of Directors. In the absence of such resolution, the
fiscal year of the Corporation shall be the calendar year.
Section 6.4 Corporate Seal. The corporate seal shall have inscribed thereon
the name of the Corporation and may be used by causing it or a facsimile thereof
to be impressed or affixed or in any manner reproduced.
Section 6.5 Examination of Books. Any shareholder of record desiring to
examine the books and records of the Corporation may do so during regular
business hours at the office of the Corporation where such books and records are
normally kept. No such shareholder, however, may remove any such books and
records from such premises, and no such shareholder shall make alterations to
such books or records, and in each instance of examination by such shareholder
of such books or records, an officer or employee designated by an officer of the
Corporation shall be present at all times during such examination, and the
regular wage or salary of such officer or employee for the period of time spent
in such examination shall be paid to the Corporation by such shareholder or
shareholders making such examination. Notwithstanding any provision hereinabove
to the contrary, no shareholder shall have the right to examine the books or the
records of the Corporation if any officer of the Corporation determines, in his
or her discretion, that such examination may be to the detriment or competitive
disadvantage of the Corporation or if the purpose of such examination is
improper.
Section 6.6 Amendments. These By-Laws may be altered, amended, or repealed,
to the extent not prohibited by law or the Restated Articles of Incorporation,
by the Board of Directors.
9
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August 6, 1998 - Amendment Adopted by the Board of Directors:
------------------------------------------------------------
RESOLVED, that the second sentence of the second paragraph of Section 1.2
of the Company's By-Laws be amended to provide as follows:
"To be timely, a shareholder's notice must be delivered to or mailed
and received at the principle executive offices of the Corporation not
less than sixty days nor more than eighty days prior to the
anniversary date on which the Corporation's proxy materials related to
the previous year's annual meeting were first mailed."
RESOLVED FURTHER, that Section 1.2 of the Company's By-Laws as amended is
designated as a Protected By-Law.
10
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Exhibit 10.2
RESTATED AND AMENDED EMPLOYMENT AGREEMENT
BETWEEN
FELIX E. WRIGHT AND
LEGGETT & PLATT, INCORPORATED
1. Employment........................................................ 1
2. Term.............................................................. 2
2.1 Term......................................................... 2
2.2 Early Termination............................................ 2
3. Duties and Authority.............................................. 2
4. Compensation...................................................... 3
4.1 Base Salary.................................................. 3
4.2 Annual Cash Bonus............................................ 3
4.3 Option Grants................................................ 4
4.4 Vacations; Other Benefits.................................... 4
5. Expenses.......................................................... 5
6. Pension........................................................... 5
6.1 Obligation to Make Pension Payments.......................... 5
6.2 Commencement and Duration of Pension Payments................ 5
6.3 Amount of Annual Pension Payments............................ 5
6.4 Insurance During Retirement or Disability.................... 6
6.5 Conversion of Pension Payments into Options.................. 7
7. Disability........................................................ 8
7.1 Definition of "Total Disability.............................. 8
7.2 Offset Payments.............................................. 8
8. Executive's Option to Terminate Agreement......................... 8
9. Consulting Agreement.............................................. 9
10. Termination by the Company........................................ 10
10.1 Termination For Cause....................................... 10
10.2 Termination Without Cause................................... 10
11. Confidential Information.......................................... 11
12. Nonassignability.................................................. 11
13. Miscellaneous..................................................... 11
13.1 Waivers..................................................... 11
13.2 Notices..................................................... 11
13.3 Survival of Provisions...................................... 12
13.4 Restatement................................................. 12
13.5 Split Dollar Life Insurance................................. 12
<PAGE>
RESTATED AND AMENDED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Restated Agreement")
is made as of March 1, 1999 by Leggett & Platt, Incorporated, a Missouri
corporation (the "Company"), and Felix E. Wright (the "Executive").
RECITALS
--------
A. This Restated Agreement amends and restates in its entirety the Employment
Agreement between the Company and the Executive dated May 1, 1981, as
previously amended, supplemented or clarified (the "Employment Agreement").
B. This Restated Agreement eliminates certain provisions of the Employment
Agreement which have become inapplicable due to the passage of time, and
integrates the Employment Agreement and all prior supplements or amendments
into a single comprehensive document.
C. The Company desires that the Executive remain in the employment of the
Company. Accordingly, the Compensation Committee (the "Compensation
Committee") of the Board of Directors of the Company (the "Board") has
recommended the execution of this Restated Agreement and the Board has
authorized the execution of the same.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the Company and the
Executive do restate and agree as follows:
1. Employment
----------
The Company hereby reaffirms its employment of the Executive as its
President and Chief Operating Officer, and the Executive hereby confirms his
employment in that capacity. Beginning on May 13, 1999, the Executive will, if
so elected by the Board, become the Chief Executive Officer of the Company, Vice
Chairman of the Board, and Vice Chairman of the Executive Committee. The
Executive will no longer be the Chief Operating Officer after May 13, 1999, but
shall continue to act as President of the Company until such time as the Board
appoints a new President.
The Executive's employment under this Restated Agreement is subject to the
terms and conditions set out below and will be carried out in Carthage,
Missouri, at the Company's principal executive offices. However, the Executive
acknowledges that the nature of his employment may require reasonable domestic
and international travel from time to time.
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2. Term
----
2.1 Term
----
The term of this Restated Agreement commenced on May 1, 1981 and shall
end on October 1, 2002, unless terminated earlier in accordance with the
provisions of this Restated Agreement. Upon mutual agreement between the
Executive and the Company, the term of this Agreement may be extended for up to
two additional one-year periods.
2.2 Early Termination
-----------------
The term of this Restated Agreement may be terminated prior to
expiration by reason of any of the following:
(a) by the Executive (but not the Company) upon six (6) months prior
written notice;
(b) in accordance with the Severance Benefit Agreement between the
Company and the Executive dated as of May 9, 1984, as amended
from time to time (the "Severance Benefit Agreement"), a copy of
which is attached as Exhibit A for information purposes only;
(c) by the Executive's death;
(d) in accordance with Section 7 hereof, upon the Executive's Total
Disability (as hereinafter defined);
(e) by the Executive pursuant to Section 8 hereof;
(f) by the Company pursuant to Section 10 hereof; or
(g) for other causes as provided elsewhere in this Restated
Agreement.
3. Duties and Authority
--------------------
The Executive shall devote his full business time to the affairs of the
Company. However, this shall not be deemed to prevent the Executive from
devoting such time (which shall not be substantial in the aggregate) to personal
business interests that do not unreasonably interfere with the performance of
the Executive's duties hereunder.
The Executive shall use his best efforts, skills and abilities to promote
the Company's interests. The Executive shall serve as director (if so elected by
the shareholders of the Company) and shall perform such duties at the
Presidential level or above as may be assigned to him by the Board.
2
<PAGE>
The direction and control exercised by the Board over the Executive shall
be such as is customarily exercised by a board of directors over a vice chairman
of the board and chief executive officer.
4. Compensation
------------
4.1 Base Salary
-----------
The Executive shall be paid a base salary at an annual rate of
$660,000. Beginning on or about April 1, 2000 and April 1 of each successive
year during the term of Executive's active performance of duties as Chief
Executive Officer of the Company hereunder, the Compensation Committee of the
Board shall appraise the Executive's performance during the previous calendar
year, taking into account such factors as it deems appropriate. As a result of
such appraisal, the then annual base salary of the Executive may be increased
(but shall not be decreased) by such amount as the Compensation Committee
determines is fair, just and equitable; provided, however, the percentage
increase in the Executive's base salary shall always be at least equal to the
then latest percentage increase over the previous year in the aggregate annual
base salaries of the Company's five highest paid executive officers other than
the Executive. In computing this percentage increase, the Compensation Committee
shall disregard that part of any base salary increase attributable in the
Committee's reasonable judgment to additional responsibilities assumed or to be
assumed by any of such five highest paid executive officers. Further, in
computing the percentage increase, the Compensation Committee shall make
equitable adjustments in its computations so that the Executive will not be
prejudiced by any reduction in the responsibilities of any of such five highest
paid executive officers implemented during the immediately preceding year or to
be implemented in the immediately following year.
The Executive's base salary shall be paid in equal bi-weekly
installments.
All salary increases under this section will be made as of the
beginning of the first payroll period in which the Company's other salaried
employees generally receive merit related annual salary adjustments.
4.2 Annual Cash Bonus
-----------------
For the year l999, and each succeeding year during the term of this
Agreement, the Executive shall be entitled to earn a cash bonus computed in
accordance with the 1999 Key Officers Incentive Plan (the "Incentive Plan"). The
amount of the Executive's bonus shall be determined by applying a bonus formula
approved by the Compensation Committee to a percentage of Executive's annual
salary on December 31 of each year ("target percentage"). The Executive's target
percentage is 60%. The Compensation Committee shall be entitled to amend or
supplement the guidelines from time to time whenever the Committee deems this to
be in the best interests of the shareholders of the Company.
If the Executive's employment under this Restated Agreement is
terminated before December 31 of any year, the Executive shall receive a
prorated bonus for the year of
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termination. This prorated bonus shall bear the same ratio to the actual bonus
the Executive would have earned with respect to the year under the Incentive
Plan as the number of days this Restated Agreement is in force during such year
bears to 365.
4.3 Option Grant.
------------
Prior to May 13, 1999, the Executive shall be granted non-qualified
options to purchase 200,000 shares of the Company's common stock. The options
shall (i) have an exercise price equal to the closing price of the Company's
common stock on the New York Stock Exchange on the option grant date, (ii) vest
and become exercisable over a 5-year period, 20% after the end of each year
after grant, (iii) have a 10-year term and, once the options are vested and
become exercisable, may be exercised during such ten-year period even if the
Executive is no longer employed by the Company, and (iv) shall be subject to
such other terms and conditions as are contained in the Company's standard form
of non-qualified option agreement. If the Executive continues to be employed by
the Company after October 1, 2002, the Compensation Committee will determine
whether Executive will participate in company-wide stock option grants occurring
after such date or otherwise receive additional stock option grants.
4.4 Vacations; Other Benefits
-------------------------
The Executive shall be entitled to a reasonable annual vacation (not
less than an aggregate of four weeks in any calendar year) with full pay,
benefits and allowances.
In addition to the salary, bonus and other payments to be made under
this Restated Agreement, the Executive shall be entitled to participate (to the
extent legally permitted) in any insurance, pension, profit sharing, stock
bonus, stock option, stock purchase or other benefit plan of the Company now
existing or hereafter adopted for the benefit of executive officers of the
Company or the employees of the Company generally.
At the Company's expense, the Company shall provide office space,
secretarial assistance, supplies and equipment fully adequate to enable the
Executive to perform the services contemplated by this Restated Agreement and at
least comparable to that being provided to the Executive on the date hereof.
The Company shall provide the Executive with appropriate perquisites
at least comparable to those provided to the Executive on the date hereof and,
in all events, equal to such perquisites as may be made available from time to
time to the Company's other executive officers.
In addition to the payments provided for in this Section 4 and
elsewhere in this Restated Agreement, the Company may from time to time pay the
Executive as a salary increase, a bonus or otherwise, such additional amounts as
the Compensation Committee of the Board shall, in its discretion, determine.
Except as may be provided otherwise in this Restated Agreement or to
the extent required by law, no benefits referred to in this section or provided
for in other sections of this Restated Agreement shall be reduced by the Company
as to the Executive without first securing his consent.
4
<PAGE>
5. Expenses
--------
The Company shall pay or reimburse the Executive for all
transportation, hotel, living and related expenses incurred by the Executive on
business trips away from the Company's principal office and for all other
business and entertainment expenses reasonably incurred by him in connection
with the business of the Company and its subsidiaries or affiliates.
6. Pension
-------
6.1 Obligation to Make Pension Payments
-----------------------------------
When Executive's employment is hereafter terminated for any reason
whatsoever, including Total Disability or death, the Company shall make cash
payments to the Executive (herein the "Pension Payments") as provided in this
Section 6.
6.2 Commencement and Duration of Pension Payments
---------------------------------------------
The Pension Payments shall begin on the first day of the first month
immediately following the later of: (i) the Executive's termination of
employment, or (ii) the expiration of the consulting period set out in Section
9. All Pension Payments shall be made in equal monthly installments and once
commenced shall continue during the life of the Executive. If the Executive dies
before Pension Payments begin or within 15 years from the first monthly Pension
Payment, then the monthly Pension Payments shall thereafter be made during the
remainder of the 15-year period to the Executive's Designee (as hereinafter
defined).
The Executive's "Designee" shall be Martha F. Wright or such other
person or other legal entity designated by the Executive to the Company after
the date hereof. The Executive may change the Designee from time to time by an
amending designation to the Company. In the absence of a valid designation, or
if the Designee dies before the Executive, then the Designee shall be deemed to
be the estate of the Executive.
6.3 Amount of Annual Pension Payments
---------------------------------
The Executive's annual Pension Payments shall be 35% of the
Executive's Five-Year Average Compensation. "Five-Year Average Compensation"
shall be computed by dividing 5 into the highest amount of total compensation
accrued by the Company with respect to the Executive for services rendered by
the Executive in any period of five consecutive calendar years (which may
include the year of termination). Such compensation shall include salaries,
bonuses and special awards unless provided otherwise below (whether in cash or
in kind), but shall not include pensions, retirement allowances, severance pay,
fees under consulting contracts, director's fees, distributions under Company
benefit plans, the value of fringe benefits and the like. Additionally, in
computing Five-Year Average Compensation the following provisions shall apply:
(a) all salaries, bonuses and special awards shall be deemed
"accrued" with respect to a given year even though actually paid
in a later year, provided the same stem from the Executive's
performance of services
5
<PAGE>
during the given year (e.g., bonuses for the year 1999 paid in
February 2000, or any salary or bonus which the Executive elects
to defer until later years pursuant to the Company's Deferred
Compensation Program);
(b) if the Executive elects to receive stock options in lieu of
salary or bonus under the Company's Deferred Compensation Program
or any other plan the Company may hereafter adopt, the
compensation "accrued" shall be the amount of salary or bonus
foregone;
(c) all stock and cash awards previously or hereafter issued to the
Executive under the Company's 1989 Flexible Stock Plan will be
excluded;
(d) all payments previously or hereafter made to the Executive to
offset the effect of tax law limitations on the Executive's
participation in the Leggett & Platt Retirement Plan will be
excluded; and
(e) all bonuses, awards and other payments made to the Executive (i)
to reimburse Executive for, or provide the Executive with funds
to pay, income taxes which become payable by the Executive as a
result of exercise of non-qualified stock options or (ii) to
induce the Executive to make, or to compensate Executive for
making, disqualifying dispositions of Company stock acquired in
the exercise of incentive stock options, will be excluded.
The annual Pension Payments under this section shall be reduced by all
amounts paid to Executive under any disability income insurance policies which
are attributable to premiums paid by the Company (all such amounts are referred
to as "Pension Reduction Amounts").
6.4 Insurance During Retirement or Disability
-----------------------------------------
During the 15-year period following Executive's termination of
employment (or, if longer, until Executive's death), the Company will pay, or
arrange insurance coverages to pay, all of Executive's and his dependents'
medical and hospitalization expenses which are not covered by Medicare or other
government health insurance. However, the payments and coverages provided by the
Company will not exceed the payments and coverages that Executive and his
dependents would have received under the Company's medical plan applicable to
them immediately prior to termination of Executive's employment. The Company
will also reimburse the Executive and his dependents for premiums they pay for
Medicare and other government health insurance.
The Company will provide life insurance coverage to the Executive at
least equal to the coverage provided to him immediately prior to termination of
his employment.
The Company will pay to Executive and his dependents an amount
sufficient to pay income taxes on all amounts or benefits received under this
Section 6.4 which are required to be included in income for tax purposes.
6
<PAGE>
6.5 Conversion of Pension Payments into Options
-------------------------------------------
The Executive may elect to convert all or a portion of the present
value of his Pension Payments into Options at the times set out below and in
manner set out on Exhibit B:
(a) within 60 days before or after termination of Executive's
employment with the Company;
(b) within 90 days after a "Change in Control" (as defined in the
Severance Benefit Agreement);
(c) at any time if (i) the Company's price/earnings ratio, as
reported in the Wall Street Journal, is at least 14, (ii) such
ratio is at least 80% of the price/earnings ratio for the
Standard & Poors 500 index, as also reported in the Wall Street
Journal and (iii) the Company's common stock is trading at a
price which is at least 85% of the 3-year high;
(d) at any time within three months after the Company has sold, for
its own account, its common stock in an underwritten, primary
public offering;
(e) at such other time or times either before or after termination of
employment as the Compensation Committee may, in its sole
discretion, agree with Executive.
"Option" means an Option to purchase shares of the Company's common
stock, the general terms and conditions of which are set out on Exhibit B. The
formula for determining the number of Option shares is also set out on Exhibit
B.
The present value of the Pension Payments to be converted into Options
shall be determined by an independent actuary of the Company. The discount rate
applied by the actuary shall be determined by the Chief Financial Officer using
a rate equal to the Company's cost of funds for obligations of similar duration.
The Executive shall exercise his election to convert all or a portion
of the Pension Payments into Options by delivering an election notice (the
"Election Notice") to the Compensation Committee. The Election Notice shall
designate the portion of Pension Payments to be converted into Options. Promptly
after receipt of the Election Notice, the Company shall deliver to Executive an
agreement evidencing the Company's obligations as respects the Options. The
agreement shall incorporate all of the terms and conditions of the Options set
out on Exhibit B and contain such additional terms and conditions determined by
the Compensation Committee as are consistent with Exhibit B and necessary to
implement Executive's election. Limitations or restrictions on the time of
election, purchase or sale of Company securities or other matters may be added
to the Option agreement to reduce the risk of violation of Section 16 of the
Securities Exchange Act of 1934.
Upon the grant of an Option, the Company's obligations to make all or
any part of the Pension Payments shall be extinguished to the extent such
Pension Payments were used as a basis for conversion into Options. Thus, for
example, if the Executive elected to convert all of his accrued Pension Payments
into Options on January 1, 2000, the number of Options
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received would be based on 35% of his Five Year Average Compensation (see
Section 6.3). If the annual Pension payments accrued were $400,000 at this time,
the Company's obligation for future annual Pension Payments would be
extinguished to the extent of $400,000. If the Executive continued to be
employed until January 1, 2003 and his annual Pension Payments would have been
$500,000 at that time, he would receive annual Pension payments equal to
$100,000 (i.e., $500,000 minus $400,000) over the pension period.
In no event shall the Company be required to issue Options under this
Section 6.5 if, under the tax laws then in force, such issuance or subsequent
exercise of the Options will result in materially increasing the Company's tax
liabilities when compared to making Pension Payments.
7. Disability
----------
7.1 Definition of "Total Disability"
-------------------------------
The Executive shall be deemed to have a "Total Disability" if he is
unable, for a continuous period of four or more months, to perform substantially
all of the material personal services to be rendered by him under this Restated
Agreement.
During the continuance of any Total Disability, the Board may elect to
relieve the Executive of all of his duties hereunder by Board resolution
delivered to the Executive, or the Executive may elect to cease performing all
of his duties hereunder by notice delivered to the Company. Thereupon,
Executive's duties and responsibilities under this Restated Agreement shall
cease 60 days following delivery of the Board resolution or the Executive's
notice, as the case may be; provided, however, that all other provisions of this
Restated Agreement, including the Executive's cash compensation and other
benefits, shall continue in full force until 14 months from the first day of the
four month or longer continuous period that culminated in the Total Disability
("Disability Termination Date"). If Executive continues to have a Total
Disability on the Disability Termination Date, his employment under this
Restated Agreement shall be terminated.
7.2 Offset Payments
---------------
The Company's obligation to continue the Executive's cash compensation
from the date of a Total Disability to the Disability Termination Date shall be
reduced by (a) all amounts paid to Executive under disability income insurance
policies made available to the Executive by the Company and (b) by all amounts
received by the Executive from Social Security disability benefits.
8. Executive's Option to Terminate Agreement
-----------------------------------------
Not later than six months after the occurrence of any of the following
events the Executive may elect to terminate his employment under this Restated
Agreement by sending notice of termination to the Company:
(a) The Executive shall not be elected and continue as director of the
Company, or Chief Executive Officer of the Company or a Member of the
Board's Executive Committee;
8
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(b) The Company is merged or consolidated with another corporation and the
Company is not the survivor;
(c) The Company is dissolved;
(d) Substantially all of the assets of the Company are sold to any
other person;
(e) A public tender offer is made for the shares of the Company and the
offeror acquires at least 40% of the outstanding common shares of the
Company; or
(f) A proxy contest is waged and the person waging the contest acquires
working control of the Company.
The Executive's employment obligations under this Restated Agreement shall
terminate on the date of termination specified in the Executive's notice to the
Company, which date must be within 60 days of the date of the notice.
9. Consulting Agreement
--------------------
Upon the expiration of the term of this Restated Agreement or the
termination of the Executive's employment for any reason other than death, Total
Disability, or discharge for cause, either the Company or the Executive shall
have the option to arrange for the Executive to render consulting services to
the Company on the following terms and conditions:
(a) The party wishing to invoke the provisions of this section shall send
notice thereof to the other party within 120 days after termination of
employment.
(b) Beginning on the first day of the first month immediately following
the sending of the notice and continuing for a period of two years
thereafter, the Executive shall render such consulting services to the
Company as the Company may reasonably request from time to time.
Consulting services shall be limited to the Executive's consideration,
review and/or rendering of advice regarding plans or ideas or specific
limited questions or problems proposed by the Company and consultation
on any major matters of policy affecting the Company, it being
understood that none of the foregoing is to generate substantial
research, traveling or deliberation time by the Executive.
(c) In consideration for the consulting services to be rendered by the
Executive, the Company shall pay the Executive during the first and
second years of consultation an amount equal to 60% of the Executive's
Five-Year Average Compensation (as defined in Section 6.3).
(d) Consulting fees payable hereunder shall be paid each year in bi-weekly
installments. In addition, the Company shall promptly pay or reimburse
the Executive for all out-of-pocket costs incurred by him in rendering
consulting services under this section.
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(e) All payments made under this section shall be in addition to any
Pension Payments or other payments made to the Executive under this
Restated Agreement.
(f) During the period Executive is rendering consulting services, he shall
be entitled to use the same office space and to receive secretarial
service which is at least equal to that received immediately prior to
his termination of full-time employment.
10. Termination by the Company
--------------------------
10.1 Termination For Cause
---------------------
The Company may terminate the Executive's employment pursuant to this
Restated Agreement by discharging the Executive for cause. The term "for cause"
shall be limited to the following events:
(a) The Executive's conviction of any crime involving money or other
property of the Company or any of its affiliates or of any other
crime (whether or not involving the Company or any of its
affiliates) that constitutes a felony in the jurisdiction
involved; or
(b) The Executive's continuing, repeated, willful violation of
specific written directions of the Board (or the board of any
affiliate of the Company of which the Executive is an officer)
which directions are consistent with this Restated Agreement and
which violation continues following the Executive's receipt of
such written directions; or
(c) The Executive's continuing, repeated, willful failure to perform
his duties hereunder; 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 of the
board of any affiliate of the Company of which the Executive is
an officer) advising the Executive of the 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.
In no event shall the alleged incompetence of the Executive in the
performance of his duties under this Restated Agreement be deemed grounds for
discharge for cause.
10.2 Termination Without Cause
-------------------------
The Board, at any time and without cause, may relieve the Executive of
his duties under this Restated Agreement upon three months prior written notice
to the Executive; provided that such action by the Board pursuant to this
Section 10.2 shall not be deemed a termination of the Executive's employment and
shall not relieve the Company of any of its financial obligations to the
Executive as set forth in this Restated Agreement. Notwithstanding
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<PAGE>
the foregoing sentence, if the Executive's duties are terminated pursuant to
this Section 10.2, the Executive's employment shall thereafter be terminated
upon the earlier of (i) Executive's death or (ii) the Disability Termination
Date (as defined in Section 7.1).
11. Confidential Information
------------------------
The Executive shall not at any time (whether during the term of this
Restated Agreement or thereafter) disclose to any person any confidential
information or trade secrets of the Company.
If any of the restrictions contained in this section or elsewhere in this
Restated Agreement shall be deemed unenforceable by reason of the extent,
duration, or geographical scope thereof or otherwise, then the Executive and the
Company contemplate that the appropriate court will reduce such extent,
duration, geographical scope or other provisions hereof and enforce the
restrictions set out in this section and elsewhere in their reduced form for all
purposes in the manner contemplated hereby.
12. Nonassignability
----------------
This Restated Agreement and the benefits hereunder are personal to the
Company and are not assignable by it; provided, however, this Restated Agreement
and the benefits hereunder may be assigned by the Company to any person
acquiring all or substantially all of the assets of the Company or to any
corporation into which the Company may be merged or consolidated. In the event
of an assignment of this Restated Agreement to any person acquiring all or
substantially all of the assets of the Company or to any corporation into which
the Company may be merged or consolidated, the title, responsibilities and
duties assigned to the Executive by such successor person or corporation shall
be the title, responsibilities and duties of a senior executive officer of such
successor person or corporation.
The provisions of this Restated Agreement shall be binding on and inure to
the benefit of the Executive, his assignees, executors, and administrators.
13. Miscellaneous
-------------
13.1 Waivers
-------
No waiver by either party of any breach or nonperformance of any
provision of this Restated Agreement shall be deemed to be a waiver of any
preceding or succeeding breach or nonperformance of the same or any other
provision hereof.
13.2 Notices
-------
All notices, waivers, designations or other communications (herein
collectively "notices") that either party is required or permitted to give
hereunder shall be in writing and delivered as follows:
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If to the Executive: If to the Company:
Felix E. Wright Leggett & Platt, Incorporated
2195 County Road 110 No. 1 Leggett Road
Carthage, Missouri 64836 Carthage, Missouri 64836
Attention: Secretary
subject to the right of either party at any time to designate a different
location for the delivery of notices.
13.3 Survival of Provisions
----------------------
The provisions set out in Sections 6, 9 and 11 shall survive the
expiration or termination of this Restated Agreement, as shall all other
provisions hereof which provide for or contemplate performance by either the
Executive or the Company following the termination hereof.
By way of example, if Executive's employment is terminated after the
term of this Agreement (as defined in Section 2.1), then either he or the
Company shall have the option to arrange for Executive's consulting services as
described in Section 9.
13.4 Restatement
-----------
This Restated Agreement shall replace and supersede in the entirety
the Employment Agreement and all supplements, amendments or clarifications to
the Employment Agreement prior to date hereof.
13.5 Split Dollar Life Insurance
---------------------------
On February 21, 1977, the Company and the Executive entered into a
split dollar life insurance agreement (the "Split Dollar Agreement") pertaining
to a policy on the life of the Executive in the amount of $100,000. The Split
Dollar Agreement shall continue in full force in accordance with its terms and
shall not be affected by this Restated Agreement.
IN WITNESS WHEREOF, the Company and the Executive have signed this
Restated Agreement as of the day and year first above written.
"EXECUTIVE" "COMPANY"
LEGGETT & PLATT, INCORPORATED
_________________________________ By: _____________________________
Felix E. Wright Name: _______________________
Title: ______________________
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EXHIBIT 10.15
Leggett & Platt, Incorporated
------------------------------
Deferred Compensation Program (the "Program")
---------------------------------------------
1. General.
1.1 The purpose of the Program is to provide selected Participants the
opportunity to defer into the future compensation to which the Participant is
not yet entitled.
1.2 The Program shall be administered by the Compensation Committee of the
Company's Board of Directors. The Compensation Committee may delegate its
administrative authority, except as respects Section 16 Officers, to any Company
officer or committee of Company employees.
2. Definitions.
2.1 "Cash Deferral" means the deferral of Compensation pursuant to the
Program into an obligation of the Company to pay on a future date or dates the
deferred Compensation plus interest or earnings thereon determined in the manner
set out in the instrument evidencing the Company's obligation. The general terms
and conditions applicable to Cash Deferrals are set out on Exhibit A.
2.2 "Committee" means the Compensation Committee of the Board of Directors
of the Company or, except as to Section 16 Officers, any persons to whom the
administrative authority has been delegated.
2.3 "Common Stock" means the Company's common stock, $.01 par value.
2.4 "Company" means Leggett & Platt, Incorporated and all of its
subsidiaries.
2.5 "Compensation" means salary, incentive compensation plan bonuses,
special bonuses, bonuses payable under the Company's Executive Stock Purchase
Program, and all other forms of cash compensation which may become payable to a
Participant except to the extent excluded by the Committee.
2.6 "Deferred Compensation" means any Compensation which would have become
payable to a Participant but for the Participant's election to defer such
Compensation pursuant to the Program.
2.7 "Lost Retirement Benefit Amount"--see Section 5.2.
2.8 "Option" means an option to purchase shares of Common Stock issued
pursuant to the Program. The general terms and conditions of the Options are
set out on Exhibit B.
2.9 "Participant" means (i) all Section 16 Officers and (ii) such other
employees of the Company as shall be selected by the Committee.
2.10 "Section 16 Officers" means all officers of the Company subject to
the requirements of Section 16 of the Securities Exchange Act of 1934.
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<PAGE>
3. Election to Defer.
3.1 Each Participant shall be given the option to elect to defer all or a
portion of the Participant's Compensation which will become payable to the
Participant in the next calendar year. Compensation may be deferred into either
a Cash Deferral or Option. The foregoing notwithstanding, Section 16 Officers
may not elect to receive a Option except as provided in Section 6.
3.2 Elections shall be made on forms approved by the Committee and the
Company's Legal Department. The election must be made before the Participant is
entitled to receive the Compensation deferred and in any event must be made on
or before December 31 of the calendar year preceding the year in which the
Deferred Compensation would have normally become payable. Elections may be
modified or withdrawn until such time as an original election could no longer be
made.
3.3 If Compensation payable after giving effect to a deferral election
will be insufficient to pay all required deductions and payments in connection
with Company benefit plans and any required tax or other governmental
withholdings, arrangements suitable to the Company for the collection of the
deductions and payments mentioned above must be made at the time the relevant
agreement evidencing the Cash Deferral or Option is entered into. Deferred
Compensation shall not be paid and Options may not be exercised unless all
required deductions and payments have been paid.
3.4 Election forms distributed to Participants shall be accompanied by
explanatory materials and other documentation which shall be determined by the
Committee and the Legal Department to comply with all applicable disclosure
requirements and otherwise explain the features of the Program.
4. Implementation of Deferral.
4.1 Upon receipt and acceptance of an election to defer Compensation the
Company shall deliver to the Participant an agreement evidencing the Company's
obligations as respects the Deferred Compensation.
4.2 These agreements shall incorporate all of the terms and conditions of
the Cash Deferral ( Exhibit A) or the Options (Exhibit B) and contain such
additional terms and conditions determined by the Committee to be consistent
with Exhibits A or B and necessary to implement the Participant's election.
5. Company Benefit Plans.
5.1 It is intended that the deferral of Compensation pursuant to the
Program shall not affect other Company benefit plans or programs in which the
Participant is participating or may be eligible to participate.
5.2 The following shall apply as respects the types of benefits listed
below.
. Retirement Plan--The principal amount payable by the Company
under a Cash Deferral agreement or the amount used to calculate
the number of shares subject to Options shall be increased by the
Lost Retirement Benefit Amount. The Lost Retirement Benefit
Amount is (i) the present value, if any, by which the
Participant's retirement benefit under the Company's Retirement
Plan would be reduced as a result of the deferral of Compensation
under the Program less (ii) the present value of Participant
contributions not made to the Retirement Plan as a result of
deferral of Compensation.
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<PAGE>
. Executive Stock Purchase Program--The amount of payroll
deductions for required payments of Participant under the
Company's Executive Stock Purchase Program shall be calculated
as if no deferral had occurred.
. Discount Stock Plan--The Discount Stock Plan provides that the
elected amount of contribution expressed as a percentage of
compensation shall be calculated as if no deferral had
occurred.
. Life Insurance and Disability Benefits--To the extent the
level of benefits is based upon a Participant's compensation,
Deferred Compensation shall be included for purposes of
determining benefits.
5.3 Participant shall be required to continue to make contributions and
payments as respects all Company benefit plans in which the Participant is
participating, except the Retirement Plan, in the amounts required as if no
deferral had occurred. To the extent there is not sufficient Compensation after
deferral from which to withhold required contributions and payments the
Participant must make arrangements suitable to the Company for payment of the
required amounts. The use of Company common stock to satisfy such obligations
shall be considered by the Committee and may be approved in appropriate
circumstances. Shares used to satisfy these obligations shall be valued in the
manner provided by the Committee.
6. Special Provisions Applicable To Section 16 Officers.
6.1 Only the Compensation Committee of the Company's Board of Directors or
the Flexible Stock Plan Committee shall have the power to make determinations
and interpretations as respects any Section 16 Officer.
6.2 All election forms and agreements pertaining to Section 16 Officers
shall be reviewed and approved by the Company's Legal Department.
6.3 Limitations or restrictions on the time of election, purchase or sale
of Company securities or other matters shall be added to all forms and
agreements pertaining to Section 16 Officers as shall be necessary to reduce the
risk of violation of Section 16 of the Securities Exchange Act of 1934.
7. Miscellaneous.
7.1 The Company shall not be responsible for the tax consequences of any
election to defer Compensation. Participants shall consult with their own tax
advisors and satisfy themselves as to the tax consequences of their own deferral
election before making any elections under the program.
7.2 If a Participant elects a Cash Deferral, then in any year following the
election the Participant may request that the Committee grant an Option in lieu
of the Cash Deferral including all accrued interest. In such case, the Committee
may in its sole discretion, but shall in no way be obligated to, grant to the
Participant an Option on such date and upon such modified terms and conditions
as the Committee shall select.
7.3 By written notice to the Company a Participant may discontinue the
deferral of all amounts of Deferred Compensation (except incentive compensation
plan bonuses) not vested as of the date of such notice. The deferral
discontinuance shall be effective as soon as administratively practical after
receipt of the notice. This Section 7.3 shall not be applicable to any Section
16 Officer holding an unvested Option.
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<PAGE>
7.4 Determinations by the Committee in connection with the interpretation
or implementation of the Program shall be binding on all Participants subject to
the claims procedure set out in Exhibit A.
7.5 Neither the Program nor any elections pursuant to the Program, nor any
agreements issued under the Program shall constitute or be evidence of any
agreement or understanding, express or implied, that the Company will employ or
retain the Participant for any period of time, or at any particular rate of
compensation.
7.6 A Participant may file a form designating one or more beneficiaries who
shall be entitled to the Deferred Compensation or to exercise an Option in the
event of the Participant's death. A Participant may change or revoke a
designation of a beneficiary at any time or from time to time without obtaining
the consent of the beneficiary and the Company shall have no duty to notify such
person of the change. If notice of beneficiary is not on file or if no person
designated is living at the time of the Participant's death, then the
Participant's estate shall be deemed to be his designated beneficiary.
4
<PAGE>
LEGGETT & PLATT, INCORPORATED
DEFERRED COMPENSATION PROGRAM
EXHIBIT A
---------
Cash Deferral
Set out below are the general terms and conditions applicable to an
election to defer Compensation into an obligation of the Company to pay the
Deferred Compensation in cash at a later date.
1. The Company's obligation shall be evidenced by a written agreement
between the Company and the Participant.
2. The Company's obligation shall be a mere promise by it to pay money in
the future and the Participant shall have the status of a general unsecured
creditor of the Company.
3. Interest shall be paid on the Deferred Compensation from the date the
Deferred Compensation would have been payable at an above market rate
established by the Company's Senior Vice PresidentFinance and Administration or
other officer serving as the Company's chief financial officer.
4. At the discretion of the Committee the amount payable by the Company as
respects Deferred Compensation may be determined in such alternative manner as
may be proposed by the Participant.
5. Deferred Compensation vests at the time the Participant would have been
entitled to receive the Compensation but for the election to defer.
6. The date or dates of payment of the Deferred Compensation plus accrued
interest or other earnings ("Total Deferred Benefits") shall be as set out in
the Participant's election form; provided, however, that the date of the initial
payment of the Deferred Compensation shall not be earlier than two years after
the deferral election is made or such other date as the Committee may specify.
The Committee may in its discretion establish maximum deferral periods and
maximum pay out periods.
7. The Participant may elect to change the period over which the Deferred
Compensation is to be paid. Only one election will be permitted except with the
consent of the Committee. The election may be made only during the period
beginning six months prior to the day the first payment of Deferred Compensation
is to be made and ending on the 15th day before the first payment of Deferred
Compensation is to be made.
8. Upon the request of the Participant, or in the event of the disability
or death of the Participant, Participant's guardian, legal representative,
designated beneficiary, executor or estate, the Committee may at its sole
discretion make a full lump sum payment or partial lump sum payment of unpaid
vested Deferred Compensation together with any accrued interest to Participant
or Participant's estate or beneficiary.
9. Unless authorized by the Committee, the Company's obligation, as
respects Deferred Compensation, may not be transferred, assigned, pledged, or
hypothecated by the Participant during his lifetime.
5
<PAGE>
10. Subject to and in accordance with the specific procedures contained in
the applicable regulations under ERISA then in effect:
a. In the event that Total Deferred Benefits are not paid to the
Participant (or any beneficiary in the case of the Participant's
death), and if such person believes he is entitled to receive
such benefits, a claim shall be made in writing to the Committee
within 60 days after written notice from the Committee denying
the benefits. The claim shall be reviewed by the Committee. If
the claim is approved or denied, in full or in part, the
Committee shall provide a written notice of approval or denial
within 90 days with, in the case of a denial, the specific
reasons for the denial and specific reference to the provisions
of the Program upon which the denial is based. A claim shall be
deemed denied if the Committee does not take any action within
such 90-day period.
b. If a claim is denied or deemed denied under (a) above and a
review is desired, the Participant (or beneficiary in the case of
the Participant's death) shall notify the Committee in writing
within 60 days of the receipt of notice of denial or the date on
which the claim is deemed to be denied, as the case may be. In
requesting a review, the claimant may review the Program or any
document relating to it and submit any written issues and
comments he may deem appropriate. The Committee shall then review
the claim and provide a written decision within 60 days. This
decision, if adverse to the claimant, shall state the specific
reasons for the decision and shall include reference to specific
provisions of the Program on which the decision is based. The
Committee's decision on review shall be final.
6
<PAGE>
LEGGETT & PLATT, INCORPORATED
DEFERRED COMPENSATION PROGRAM
EXHIBIT B
---------
Options
Set out below are the general terms and conditions applicable to Options
pursuant to the Program. Capitalized terms have the meaning assigned to them in
the Program.
1. Flexible Stock Plan, Non-Qualified Options. All Options shall be granted
under the Company's 1989 Flexible Stock Plan, as amended, and shall be subject
to all the terms and conditions of that plan.
All Options shall be non-statutory options not entitled to special tax
treatment under (S)422 of the Internal Revenue Code of 1986, as amended to date.
2. Option Grant Dates. Options shall be granted as of the date selected by the
Committee which date shall not be later than the last day on which an election
to defer Compensation could be made.
3. Option Formula. Unless the option agreement or Committee provides
otherwise, the number of shares granted to any Participant shall be equal to the
nearest number of whole shares determined under the following formula:
COMPENSATION FOREGONE X 1.176
---------------------
FAIR MARKET VALUE-OPTION PRICE
"Compensation Foregone" shall mean the Compensation which the Participant
elected to forgo plus the Lost Retirement Benefit Amount, if any. "Fair Market
Value" shall mean the lowest per share closing price during December of the year
immediately preceding the year in which the deferred Compensation would have
been earned.
4. Option Price. The "Option Price" per share for each share covered by an
Option shall be 20% of Fair Market Value.
5. Limited Transferability.
-----------------------
5.1 Except as provided in Sections 5.2, 5.3 or unless otherwise allowed by
the Committee, no Option or interest therein may be transferred, assigned,
pledged or hypothecated by the Participant during his lifetime, whether by
operation of law or otherwise, or be made subject to execution, attachment or
similar process and shall be exercised during the lifetime of the Participant
only by him or, in the case of disability, his guardian or legal representative.
5.2 A Participant may not transfer all or a part of the Options by way of
bona fide gift without the consent of the Committee. The donee of a gift shall
hold the Options subject to all the terms and conditions of the Program and the
agreement evidencing the Options. A gift to a minor shall not be permitted
except pursuant to the Uniform Transfers to Minors Act or similar legislation.
In the event a gift is made it will be recognized by the Company only if the
donor gives written notice to the Company of the gift, identifying the donee's
name and address.
5.3 Options may be transferred by will or the laws of descent and
distribution.
7
<PAGE>
6. Term of Options. Options shall have a term of fifteen years from the Grant
Date.
7. Vesting. Options shall be vested in the Participant according to a schedule
provided for in each option agreement. The vesting schedule shall reasonably tie
the vesting of options to the time Compensation which the Participant elected to
forego would have been earned. Options not vested shall terminate immediately at
the time a Participant's employment with the Company terminates for any reason.
8. Exercise of Option. Options shall be exercisable at the later of (i) 12
months after the Grant Date specified by the Committee in the Option grant or
(ii) the date the option vests. However, despite any later specified date for
exercise, any vested Option shall become exercisable in full upon the death of
the Participant or his total and permanent disability. No Option shall be
exercisable after the expiration of its term.
An Option may be exercised only by delivering a written notice to the
Company accompanied by payment of the full option price for the shares
purchased. Unless otherwise prohibited by the option agreement, such
consideration may be paid by delivery of shares of Common Stock (held for at
least 6 months) or a combination of cash and shares of Common Stock. Any such
shares shall be valued at the fair market value of such shares on the day
immediately preceding the date of exercise. Options may be exercised in full or
in part for whole shares (no fractional shares will be issued) and any
exercisable portion not exercised may be later exercised subject to the
Expiration Date. The written notice shall specify the number of shares the
Participant then desires to purchase. No shares shall be delivered in connection
with the exercise of an Option unless all amounts required to satisfy tax and
any other required withholdings have been paid to the Company by or on behalf of
the Participant.
If any Option has not been fully exercised on the last day of the term
("Expiration Date"), the unexercised portion of the option shall be deemed
exercised on such Expiration Date. In such event, shares of Common Stock shall
not be issued until the option price and any other required amounts have been
paid.
Upon the death of a Participant, his Options shall be exercisable by the
person or persons entitled to do so under his will or by written designation
filed with the Company, or, if the Participant shall fail to make testamentary
disposition of the Options or shall die intestate, by the Participant's legal
representative or representatives. All Options must be exercised prior to the
end of the term. Any exercise by a representative shall be subject to the
provisions of the Program.
9. Modification, Extension and Renewal of Options. The Committee shall have
the power to modify, extend or renew outstanding Options and authorize the grant
of new Options in substitution therefor, provided that any such action may not
have the effect of altering or impairing any rights or obligations of any Option
previously granted without the consent of the Participant.
10. No Shareholders' Rights. A Participant shall have no rights as a
shareholder with respect to the shares covered by his Options until the date of
the issuance to him of a stock certificate therefor, and no adjustment will be
made for dividends or other rights for which the record date is prior to the
date such certificate is issued.
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Exhibit 10.16
LEGGETT & PLATT, INCORPORATED
EXECUTIVE DEFERRED STOCK PROGRAM
(Effective as of August 6, 1998)
ARTICLE I--PURPOSE
------------------
The Program is intended to attract, motivate and retain executives of the
Company and its subsidiaries and affiliates by providing an opportunity and an
incentive for them to defer the receipt of compensation otherwise payable
currently. The Program is established pursuant to the Leggett & Platt,
Incorporated 1989 Flexible Stock Plan ("Plan").
ARTICLE II--DEFINITIONS
-----------------------
The following capitalized terms used in the Program shall have the respective
meanings set forth in this Article. (Terms not defined herein shall have the
meanings set forth in the Plan.)
2.1 "Dividend Equivalent" means the amount equal to the cash dividend payable
on a share of Common Stock.
2.2 "Mature Common Stock" means Common Stock that has been held by the
Participant for at least six months and is "mature" as provided for in
Emerging Issues Task Force (EITF) Issue No. 97-5, as amended.
2.3 "Option Deferral Election" means an election to defer the receipt of Profit
Shares otherwise transferable to the Participant upon exercise of a Stock
Option in the form(s) provided by the Committee.
2.4 "Participant" means one who participates in the Program.
2.5 "Program" means the Leggett & Platt, Incorporated Executive Deferred Stock
Program, as from time to time amended.
2.6 "Profit Shares" means (1) the number of Common Stock shares acquired by
Stock Option exercise, minus (2) the number of Mature Common Shares used to
exercise the Stock Option.
2.7 "Stock Account" means the account maintained for each Participant in
accordance with Article VII hereof, for bookkeeping purposes only. Amounts
credited to the Stock Account shall be expressed in the form of Stock
Units.
2.8 "Stock Option(s)" means a non-qualified stock option to purchase share(s)
of Common Stock.
2.9 "Stock Unit" means a unit of account deemed to equal a single share of
Common Stock.
<PAGE>
2.10 "Unforeseeable Circumstances" means a financial requirement of the
Participant resulting from unforeseeable circumstances arising as a result
of events beyond the control of the Participant as determined by the
Committee.
ARTICLE III--ADMINISTRATION
---------------------------
3.1 Committee. Except as otherwise provided in the Program, the Committee
shall have full power to construe and interpret the Program, establish and
amend rules for its administration, establish eligibility and perform all
other acts relating to the Program. The Company, or any persons designated
by the Committee, shall be responsible for administering the Program,
including without limitation receiving Option Deferral Elections,
maintaining account balances, distributing benefits, and performing other
duties concerning operation of the Program.
3.2 Adjudication. Any decision made, or action taken, by the Committee arising
out of the interpretation and administration of the Program shall be final
and conclusive.
ARTICLE IV--PARTICIPATION
-------------------------
4.1 Eligibility. Participation in the Program shall be limited to a select
group of management or highly compensated employees of the Company and its
affiliates and subsidiaries who are selected by the Committee or its
designee(s).
4.2 Filing an Election. An Option Deferral Election must be filed with the
Committee at least six months before the exercise of the relevant Stock
Option. Once filed, the Participant may not exercise such Stock Option
during the period beginning on the day the Option Deferral Election is
filed and ending six months after such day. An Option Deferral Election
may be revoked by the Participant during this six-month period if the
Option Deferral Election would prohibit the Participant from exercising a
Stock Option prior to its expiration (including without limitation
expiration due to termination of employment, death, or disability) or if a
Change of Control has occurred.
4.3 Irrevocable. An Option Deferral Election shall be irrevocable once filed
with the Committee except as provided in Section 4.2 and Articles VII and
VIII hereof.
ARTICLE V--ELECTIVE DEFERRALS
-----------------------------
5.1 Compensation Subject to Deferral. When a Participant exercises a Stock
Option for which an Option Deferral Election is in effect, the payment of
Profit Shares otherwise transferable to the Participant shall be deferred
in accordance with the terms prescribed therein. An Option Deferral
Election shall require the Participant to pay the exercise price for the
relevant Stock Option with shares of Mature Common Stock (with fractional
shares to be paid in cash).
5.2 Deferral into Stock Units. The Participant's Stock Account shall be
credited with the number of Stock Units equal to the number of shares of
Profit Shares deferred.
2
<PAGE>
5.3 Vesting. A Participant shall have a non-forfeitable and fully vested right
with respect to the Stock Units allocated to the Participant's Stock
Account (and the Dividend Equivalents thereon) pursuant to an Option
Deferral Election.
ARTICLE VI--MAINTENANCE OF STOCK ACCOUNTS
-----------------------------------------
6.1 Dividend Equivalents. Except as otherwise provided in an Option Deferral
Election, with respect to any cash dividend paid on Common Stock, each
Participant's Stock Account shall be credited with the number of Stock
Units (including fractions thereof) equal to
(a) the product of the number of Stock Units credited to the Stock Account
on the record date for such dividend times the Dividend Equivalent,
divided by
(b) the Fair Market Value (for the day such dividend was paid) of a share
of Common Stock.
6.2 Change in Capitalization. In the event of a stock dividend, stock split,
merger, consolidation or other recapitalization of the Company affecting
the number of outstanding shares of Common Stock, the number of Stock Units
credited to a Participant's Stock Account shall be appropriately adjusted.
ARTICLE VII--DISTRIBUTIONS
--------------------------
7.1 Timing and Form of Payment. Payment of amounts credited under the Program
shall be made to the Participant in the time and manner specified on the
applicable Option Deferral Election. Payment of Stock Units from a Stock
Account shall be made with a corresponding number of whole shares of Common
Stock. Any fractional Stock Units shall be rounded to the nearest whole
share. A Participant's Stock Account shall be reduced by the number of
Stock Units distributed from the Stock Account.
7.2 Distribution for Unforeseeable Circumstances. A Participant may receive
early payment of all or part of the balance of such Participant's Stock
Account to the extent reasonably needed to satisfy Unforeseeable
Circumstances. A request for an early payment under this Section shall be
made in accordance with the procedures adopted by the Committee.
7.3 Change of Control. Within two weeks after a Change of Control, the
Committee shall pay to each Participant in a single sum the value of his or
her Stock Account in shares of Common Stock.
7.4 Measurement Date for Distributions. Any distribution of Common Stock shall
be based on the number of Stock Units credited to the Participant's Stock
Account as of the applicable measurement date. The measurement date for
distributions shall be the business day immediately preceding the day the
event occurs triggering the distribution (e.g., death, disability,
termination of employment, lapse of time, Change of Control) or such other
day as agreed upon between the Participant and the Committee.
3
<PAGE>
ARTICLE VIII--AMENDMENT OR TERMINATION
--------------------------------------
The Committee may amend, modify or terminate the Program or Option Deferral
Election at any time for any or no reason; provided, however, no amendment,
modification or termination shall, without consent of the Participant, adversely
affect any Option Deferral Election previously filed or such Participant's right
to payment from the Stock Account. Notwithstanding anything contained herein or
in the Option Deferral Election to the contrary, the Committee may accelerate
the payment of all or any portion of a Participant's Stock Account if it in good
faith reasonably determines that the Company would be denied a deduction under
the Internal Revenue Code for Stock Units otherwise payable to a Participant
under this Program.
ARTICLE IX--MISCELLANEOUS
-------------------------
9.1 Unsecured Right. Any right to receive a payment under the Program shall be
no greater than that of an unsecured general creditor of the Company. No
Participant shall have the right to exercise any of the rights or
privileges of a shareholder with respect to the Stock Units.
9.2 Transferability. No amount payable under the Program may be assigned,
transferred, encumbered or subject to any legal process for the payment of
any claim against a Participant. However, with the consent of the
Committee, a Participant may transfer all or any portion of his or her
Stock Account by way of a bona fide gift. The donee of the gift shall hold
the Stock Account subject to the terms and conditions of the Program and
the Option Deferral Election.
9.3 No Right to Continued Employment. Participation in the Program shall not
give any employee any right to remain in the employ of the Company or any
subsidiary.
9.4 Withholding. The Company shall withhold to the extent required by law all
applicable income and other taxes from amounts deferred or paid under the
Program.
9.5 Governing Law. The Program shall be construed, governed and enforced in
accordance with Missouri law.
9.6 Compliance with Other Laws. The Committee may impose additional
restrictions upon Participants to the extent necessary to comply with
applicable laws.
4
<PAGE>
Exhibit 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
DOMESTIC SUBSIDIARIES
<TABLE>
<CAPTION>
Country or State Percentage of
Name of Organization of Incorporation Voting Interest
-------------------- ---------------- ---------------
<S> <C> <C>
AMERICAN INNERSPRING CO. California 100%
AMERICAN WOODWORKS, INC. South Carolina 100%
B&C DIE CAST, INC. Arkansas 100%
CAMBRIDGE TOOL & MFG. CO., INC. Massachusetts 100%
CAMEO FIBERS CORPORATION Delaware 100%
COLLIER-KEYWORTH, INC. North Carolina 100%
CREST-FOAM CORP. New Jersey 100%
CREST-HOOD FOAM COMPANY, INC. Delaware 100%
CULP-GADSDEN, INC. Alabama 100%
CUMULUS FIBRES OF FLORIDA, INC. Delaware 100%
CUMULUS FIBRES, INC. North Carolina 100%
DRESHER, INC. Delaware 100%
GRIBETZ INTERNATIONAL, INC. Delaware 100%
HANES CNC SERVICES CO. North Carolina 100%
HANES COMPANIES - NEW JERSEY, INC. Delaware 100%
HANES COMPANIES, INC. North Carolina 100%
INTERNATIONAL STORAGE SYSTEMS CORPORATION Florida 100%
IREDELL FIBER, INC. North Carolina 100%
L&P ACQUISITION COMPANY - 18 Delaware 100%
L&P ACQUISITION COMPANY - 29 Delaware 100%
L&P ACQUISITION COMPANY - 31 Delaware 100%
L&P ACQUISITION COMPANY - 32 Delaware 100%
L&P ACQUISITION COMPANY - 33 Delaware 100%
</TABLE>
Page 1 of 7
<PAGE>
Exhibit 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
DOMESTIC SUBSIDIARIES
<TABLE>
<CAPTION>
Country or State Percentage of
Name of Organization of Incorporation Voting Interest
-------------------- ---------------- ---------------
<S> <C> <C>
L&P ACQUISITION COMPANY - 35, INC. Ohio 100%
L&P ACQUISITION COMPANY - 38 Illinois 100%
L&P ACQUISITION COMPANY - 8 Delaware 100%
L&P CENTRAL ASIA TRADING COMPANY Delaware 100%
L&P FINANCIAL SERVICES CO. Delaware 100%
L&P INTERNATIONAL HOLDINGS COMPANY Delaware 100%
L&P MANUFACTURING, INC. Delaware 100%
L&P MEDICAL, INC. Missouri 100%
L&P PARTNERS HOLDINGS, INC. Delaware 100%
L&P PROPERTY MANAGEMENT COMPANY Delaware 100%
L&P TEXPRO, INC. Delaware 100%
L&P TRANSPORTATION CO. Delaware 100%
L&P WESTERN SPRING CO. Delaware 100%
LEAVING TAOS, INC. Delaware 100%
LEGGETT & PLATT ASIA MARKETING, INC. Delaware 100%
LEGGETT & PLATT INTERNATIONAL
DEVELOPMENT CO. Delaware 100%
LEGGETT & PLATT INTERNATIONAL
SERVICE CORPORATION Delaware 100%
LEGGETT & PLATT TURKEY, INC. Delaware 100%
LEGGETT AND PLATT INTERNATIONAL
CORPORATION Missouri 100%
LEGGETT WIRE COMPANY Delaware 100%
MASTERBLEND, INC. Mississippi 100%
MATREX FURNITURE COMPONENTS, INC. North Carolina 100%
METROCK STEEL & WIRE COMPANY, INC. Alabama 100%
MG LOAN COMPANY Delaware 100%
MILLER MANUFACTURING & LUMBER SALES, INC. Missouri 100%
</TABLE>
Page 2 of 7
<PAGE>
Exhibit 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
DOMESTIC SUBSIDIARIES
<TABLE>
<CAPTION>
Country or State Percentage of
Name of Organization of Incorporation Voting Interest
-------------------- ---------------- ---------------
<S> <C> <C>
MISSISSIPPI SPRING CO., INC. (THE) Mississippi 100%
MO-TECH CORPORATION Minnesota 100%
NAGLE INDUSTRIES, INC. Michigan 100%
OCONTO METAL FINISHING, INC. Delaware 100%
PACE INDUSTRIES AIRO DIE CAST, INC. Pennsylvania 100%
PACE INDUSTRIES DIE CAST PRODUCTS, INC. California 100%
PACE INDUSTRIES PUGET DIVISION, INC. Arkansas 100%
PACE INDUSTRIES, INC. Arkansas 100%
PACIFIC FAIRMONT CORPORATION California 100%
PARTHENON CNC SERVICES CO. Delaware 100%
PHOENIX METAL TECHNOLOGIES LTD. Kentucky 100%
PORTER INTERNATIONAL, INC. Massachusetts 100%
PREMIER INTERNATIONAL COMPONENTS, INC. Florida 100%
RODGERS WADE MANUFACTURING COMPANY Texas 100%
SOUTHEASTERN MANUFACTURING CO., INC. Florida 100%
SPUHL ANDERSON MACHINE COMPANY Delaware 100%
SPUHL INTERNATIONAL, INC. Delaware 100%
ST. PAUL METALCRAFT, INC. Minnesota 100%
STEADLEY COMPANY Missouri 100%
STEINER-LIFF TEXTILE PRODUCTS CO. Delaware 100%
STYLELANDER METAL STAMPING, INC. Mississippi 100%
SYD-REN INDUSTRIES, INC. California 100%
SYNDICATE SYSTEMS, INC. Indiana 100%
TALBOT INDUSTRIES, INC. Missouri 100%
TARRANT INTERIORS, INC. Texas 100%
UNIVERSAL STAINLESS, INC. Colorado 100%
</TABLE>
Page 3 of 7
<PAGE>
Exhibit 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
DOMESTIC SUBSIDIARIES
<TABLE>
<CAPTION>
Country or State Percentage of
Name of Organization of Incorporation Voting Interest
-------------------- ---------------- ---------------
<S> <C> <C>
VERTEX FASTENERS, INC. Illinois 100%
WBSCO, INC. New Mexico 100%
WICHITA WIRE, INC. Kansas 100%
</TABLE>
Page 4 of 7
<PAGE>
Exhibit 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
FOREIGN SUBSIDIARIES
<TABLE>
<CAPTION>
Name of Organization of Incorporation Voting Interest
-------------------- ---------------- ---------------
<S> <C> <C>
1314116 ONTARIO INC. Canada 100%
1324912 ONTARIO INC. Canada 100%
9038-8315 QUEBEC, INC. Canada 100%
ADMINISTRADORA SOAL S.A. DE C.V. Mexico 100%
BOIS AISE DE ROBERVAL INC. Canada 100%
BOIS J.L.P. INC. Canada 100%
CARREIRO HOLDINGS S.A. DE C.V. Mexico 100%
CARREIRO S.A. DE C.V. Mexico 100%
COMERCIALIZADORA SOAL S.A. DE C.V. Mexico 100%
FIBRAS ACOLCHABLES, SA DE CV Mexico 100%
FIDES S. R. L. Italy 100%
GATEWAY (TEXTILES) LIMITED United Kingdom 100%
GATEWAY HOLDINGS LIMITED United Kingdom 100%
INTER-SPRING LIMITED United Kingdom 100%
J.A. WILSON DISPLAY LTD. Canada 100%
L AND P MEXICO, S.A. DE C.V. Mexico 100%
L&P AUTOMOTIVE EUROPE GMBH Germany 100%
L&P DENMARK APS Denmark 100%
L&P EUROPE LIMITED United Kingdom 100%
L&P FAHRZEUG-UND MATRATZEN-KOMPONENTEN
GESCHAFTSFUHRUNG GMBH Germany 100%
L&P NETHERLANDS HOLDINGS B.V. The Netherlands 100%
LEGGETT & PLATT (ALBERTA) LTD. Canada 100%
LEGGETT & PLATT (BARBADOS) LTD. Barbados 100%
LEGGETT & PLATT (GUANG ZHOU) CO. LTD. China 100%
</TABLE>
Page 5 of 7
<PAGE>
Exhibit 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
<TABLE>
<S> <C> <C>
LEGGETT & PLATT (SHANGHAI) CO. LTD. China 100%
LEGGETT & PLATT (SOUTHEAST ASIA) Singapore 100%
PTE LTD.
LEGGETT & PLATT ADMINISTRADORA, Mexico 100%
S.A. DE C.V.
LEGGETT & PLATT CANADA HOLDINGS LTD. Canada 100%
LEGGETT & PLATT DE GUADALAJARA, Mexico 100%
S.A. DE C.V.
LEGGETT & PLATT DE MEXICALI, Mexico 100%
S.A. DE C.V.
LEGGETT & PLATT DE MEXICO, S.A. DE C.V. Mexico 100%
LEGGETT & PLATT FOREIGN SALES Barbados 100%
CORPORATION
LEGGETT & PLATT KOREA, LTD. South Korea 100%
LEGGETT & PLATT LTD. Canada 100%
LEGGETT & PLATT U.K. LIMITED United Kingdom 100%
LES BOIS BLANCHET INC./BLANCHET LUMBER Canada 100%
INC.
M F KNITTING CO. LIMITED United Kingdom 100%
MARSH, FERN & COMPANY LIMITED United Kingdom 100%
NORTHEASTERN COMPONENTS (INTERNATIONAL) United Kingdom 100%
LTD.
PACE INDUSTRIES DE CHIHUAHUA, Mexico 100%
S.A. DE C.V.
PACE INDUSTRIES DE MEXICO, S.A. DE C.V. Mexico 100%
PANYU YONG WANG HARDWARE & PLASTIC China 100%
PRODUCTS LTD.
PULLMAFLEX A.B. Sweden 100%
PULLMAFLEX BENELUX N.V. Belgium 100%
PULLMAFLEX ESPANOLA S.A. Spain 100%
PULLMAFLEX INTERNATIONAL B.V. Holland 100%
(NETHERLANDS)
PULLMAFLEX INTERNATIONAL LIMITED United Kingdom 100%
PULLMAFLEX U.K. LIMITED United Kingdom 100%
S R HOLBOOK LIMITED United Kingdom 100%
</TABLE>
Page 6 of 7
<PAGE>
Exhibit 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
<TABLE>
<S> <C> <C>
SLOTEX INC. Canada 100%
SPUHL A.G. Switzerland 100%
SPUHL HOLDING A.G. Switzerland 100%
TOLEDO FEDERUNGEN GMBH Germany 100%
TOLEDO FJEDERINDLAEG A/S Germany 100%
YOUNGFLEX A.G. Switzerland 100%
</TABLE>
Page 7 of 7
<PAGE>
EXHIBIT 23
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statements of Leggett & Platt, Incorporated, listed below, of our report dated
February 3, 1999 herein of Leggett & Platt, Incorporated's
Annual Report on Form 10-K for the year ended December 31, 1998.
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. Post-Effective Amendment No. 1 to Form S-8, Registration No. 33-45334,
filed June 26, 1992.
7. Form S-8, Registration No. 33-67910, filed August 26, 1993.
8. Form S-8, Registration No. 33-54339, filed June 28, 1994.
9. Form S-8, Registration No. 33-54431, filed July 1, 1994.
10. Form S-8, Registration No. 333-69073, filed December 17, 1998.
11. Form S-3, Registration No. 333-49757, filed April 4, 1998.
12. Form S-3, Registration No. 333-60547, filed August 4, 1998.
13. Pre-Effective Amendment No. 1 to Form S-3, Registration No. 333-60547,
filed August 11, 1998.
14. Form S-3, Registration No. 333-69071, filed December 17, 1998.
PricewaterhouseCoopers, LLP
St. Louis, Missouri
March 29, 1999
<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 "Corporaton"), 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, 1998 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 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 1999 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.
IN WITNESS WHEREOF, the undersigned have executed this Power of Attorney or
a counterpart hereof, as of the 10th day of February, 1999.
/s/ RAYMOND F. BENTELE /s/ ROBERT A. JEFFERIES, JR.
- ------------------------ ----------------------------
Raymond F. Bentele Robert A. Jefferies, Jr.
/s/ HARRY M. CORNELL, JR. /s/ ALEXANDER M. LEVINE
- ------------------------- ----------------------------
Harry M. Cornell, Jr. Alexander M. Levine
/s/ R. TED ENLOE, III /s/ RICHARD L. PEARSALL
- ------------------------- ----------------------------
R. Ted Enloe III Richard L. Pearsall
/s/ RICHARD T. FISHER /s/ DUANE W. POTTER
- ------------------------- ----------------------------
Richard T. Fisher Duane W. Potter
/s/ BOB L. GADDY /s/ MAURICE E. PURNELL, JR.
- ------------------------- ----------------------------
Bob L. Gaddy Maurice E. Purnell, Jr.
/s/ DAVID S.HAFFNER /s/ ALICE L. WALTON
- ------------------------- ----------------------------
David S. Haffner Alice L. Walton
/s/ THOMAS A. HAYS /s/ FELIX E. WRIGHT
- ------------------------- ----------------------------
Thomas A. Hays Felix E. Wright
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS OF LEGGETT & PLATT, INCORPORATED FOR THE YEAR ENDED
DECEMBER 31, 1998 (COMMISSION FILE NUMBER 1-7845) AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 83500
<SECURITIES> 0
<RECEIVABLES> 516600
<ALLOWANCES> 13500
<INVENTORY> 486200
<CURRENT-ASSETS> 1137100
<PP&E> 1435000
<DEPRECIATION> 614600
<TOTAL-ASSETS> 2535300
<CURRENT-LIABILITIES> 401400
<BONDS> 574100
0
0
<COMMON> 2000
<OTHER-SE> 1434800
<TOTAL-LIABILITY-AND-EQUITY> 2535300
<SALES> 3370400
<TOTAL-REVENUES> 3370400
<CGS> 2498900
<TOTAL-COSTS> 2498900
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38500
<INCOME-PRETAX> 395600
<INCOME-TAX> 147600
<INCOME-CONTINUING> 248000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 248000
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.24
</TABLE>
<PAGE>
Exhibit 99
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned does hereby nominate,
constitute and appoint Ernest C. Jett, John A. Lyckman and John G. Moore or the
designee of any one of them, his true and lawful attorneys-in-fact, to sign in
the name of and on behalf of the undersigned and to file with the Securities and
Exchange Commission Initial Statement of Beneficial Ownership on Form 3 and
Statements of Change in Beneficial Ownership on Form 4 or Form 5 or any similar
form promulgated by the Securities and Exchange Commission and any other
documents or amendments to any said statement or form, 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 forms or amendments thereto be properly and
timely filed. This power of attorney shall be effective for a period of ten
years from the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 11th day of March, 1999.
/s/ ROBERT G. GRIFFIN
-----------------------------------------
Robert G. Griffin
