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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
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:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -----------------------
Common Stock, New York Stock Exchange
$.01 par value Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Pacific Stock Exchange
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. [_]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $1,699,573,419.
There were 83,972,743 shares of the Registrant's common stock outstanding as
of February 23, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's definitive Proxy Statement for its Annual
Meeting of Shareholders to be held May 15, 1996, are incorporated by reference
into Part III of this report.
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PART I
ITEM 1. BUSINESS
General Development of Business. The Company is a manufacturer. It was
incorporated in 1901 as the successor to a partnership formed in 1883 at
Carthage, Missouri. That partnership was a pioneer in the manufacture and sale
of steel coil bedsprings. The Company manufactures, markets and distributes a
broad range of engineered products for the home, office, institutional and
commercial furnishings industry and specialized markets. Products produced and
sold for the furnishings industry constitute the largest portion of the
Company's business. These include many different components that are used as
material parts by manufacturers of bedding, furniture and other furnishings. The
Company also produces and sells some finished products in the furnishings
industry. The term "Company," unless the context requires otherwise, refers to
Leggett & Platt, Incorporated and its majority owned subsidiaries.
The Company completed eight acquisitions in 1995 in exchange for
approximately $28.7 million in cash (net of cash acquired) and 679,448 shares of
common stock. The acquisitions expanded the Company's annual sales base by
approximately $80 million. Reference is also made to Note C of the Notes to
Consolidated Financial Statements for further information about the Company's
acquisitions.
Customers, Market and Products. The Company has several thousand
customers, most of which are manufacturers of finished furnishings. The Company
is not dependent upon any single customer or any few customers. A large number
of the Company's furnishings customers manufacture finished bedding (mattresses
and boxsprings) or upholstered and non-upholstered furniture for home, office,
institutions and commercial applications.
Over the last few years there has been a trend toward consolidation in
the furnishings industry. However, the furnishings industry generally continues
to be highly fragmented and includes many relatively small companies, widely
dispersed geographically.
Outside the furnishings industry, the Company's customers participate
in a number of different specialized or niche markets for consumer and
industrial products. These customers have requirements for various aluminum die
castings, components for automotive seating and sound insulation, various kinds
and sizes of steel wire and steel tubing, non-fashion fabrics, cushioning
materials, and specialized equipment and proprietary motion controls for
manufacturing machinery.
The Company's products are sold and distributed primarily through its
own sales personnel.
The Company's furnishings products include a broad line of components
used as material parts by manufacturers that make finished products. Examples of
furnishings components manufactured by the Company include innerspring and
boxspring units for mattresses and boxsprings; foam, textile, fiber and other
cushioning materials for bedding and furniture; springs and seating suspensions
for furniture; steel mechanisms and hardware for reclining chairs, sleeper sofas
and other types of motion furniture; chair controls, aluminum, steel and plastic
bases and columns for office furniture; non-fashion construction fabrics and
other furniture supplies.
The Company's diverse range of components gives its furnishings
manufacturer-customers access to a single source for many 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 furnishings
such as upholstered motion chairs, sofas and loveseats and office chairs.
Because the Company has the advantage of long production runs and numerous
production and assembly locations, it can produce component products more
efficiently than its customers. Therefore, components customers can focus on
the design, style and marketing of their various furnishings products, rather
than the production of many standardized components.
1
The Company also manufactures and sells some select lines of finished
products for the furnishings industry. These finished products include carpet
underlay and non-skid area rug pads, metal shelving, point-of-purchase displays
and other commercial fixtures, bed frames, daybeds, bunk beds, headboards,
adjustable electric beds, and fashion beds. Some of the finished furniture
produced by the Company is sold to bedding and furniture manufacturers that
resell the furniture under their own labels to wholesalers or retailers.
Certain finished furniture, such as bed frames, fashion beds, daybeds and other
select items, are also sold by the Company directly to retailers. Certain
shelving, displays and fixtures are sold directly to end users of the products.
Outside the furnishings industry, the Company produces and sells a
number of different products for various consumer and industrial markets. These
products require manufacturing technologies similar to those used in making
furnishings products and certain raw materials which the Company produces for
its own use. Examples of these diverse products include: (i) aluminum die
castings sold to manufacturers of small to mid size gasoline engines, large and
mid range diesel engines, motorcycles, and recreational boats and motors; (ii)
non-fashion fabrics sold to apparel manufacturers; (iii) bale-tie machinery and
parts and galvanized wire sold to customers who compact, bale and recycle solid
waste; (iv) seating components and systems and sound insulation materials sold
to automotive suppliers; (v) steel wire and welded steel tubing sold to
manufacturers of a wide range of industrial and consumer products; (vi) non-skid
pads and textile fibers sold to manufacturers of various consumer goods
requiring cushioning materials; (vii) aluminum ingot sold to manufacturers of
aluminum products; (viii) motion controls for manufacturing equipment; (ix)
quilting machinery and materials handling equipment sold to manufacturers of
consumer products; and (x) injection molded plastic products.
The table below sets out further information concerning sales of each
class of the Company's products:
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SUMMARY OF SALES
(Dollar amounts in millions) 1995 1994 1993
Furnishings Products
Bedding Components $ 558.4 $ 534.5 $ 471.1
Furniture Components 575.7 513.4 412.0
Finished Products 424.0 350.3 312.7
-------- -------- --------
Total Furnishings Products 1,558.1 1,398.2 1,195.8
Diversified Products 501.2 459.9 330.9
-------- -------- --------
Net Sales $2,059.3 $1,858.1 $1,526.7
======== ======== ========
Reference is also made to Note J of the Notes to Consolidated
Financial Statements for further segment information.
The Company's international division is involved primarily in the sale
of machinery and equipment designed to manufacture the Company's innersprings
and certain other spring products and the licensing of patents owned and
presently maintained by the Company in foreign countries. Foreign sales are a
minor portion of the Company's business.
Raw Materials. The Company uses a variety of raw materials in
manufacturing its products. Some of the Company's most important raw materials
include steel rod from which steel wire is drawn, coil steel, woven and
nonwoven fabrics, aluminum ingot, aluminum scrap, angle iron, sheet steel,
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. The Company also produces, at various locations, for its own
consumption and for sale to customers not affiliated with the Company, slit coil
steel, welded steel tubing, textile fibers, dimension lumber and aluminum ingot.
Numerous supply sources
2
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 LOK-Fast(TM) and DYNA-Lock(TM) (boxspring components),
Mira-Coil(R) and Lura-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); Modu Max(TM) (sofa
sleeper mechanism); FastLoc(TM) (sofa component); Gribetz, WBSCO and Cyclo-
Index (machinery).
Research and Development. The Company maintains research, engineering
and testing centers at Carthage, Missouri, and also does research and
development work at several of its other facilities. The Company is unable to
precisely calculate the cost of research and development since the personnel
involved in product and machinery development also spend portions of their time
in other areas. However, the Company believes the cost of research and
development was approximately $7 million in 1995, $6 million in 1994 and $5
million in 1993.
Employees. The Company has approximately 16,600 employees of whom
approximately 12,800 are engaged in production. Approximately 35% 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 1995. 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 1996.
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 other
companies competing with respect to any class or type of components or other
products 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
are 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 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 consolidated financial condition or results of operations
of the Company.
From time to time, the Company is involved in proceedings related to
environmental matters. In one instance, the United States Environmental
Protection Agency (EPA) ordered one of the Company's subsidiaries to investigate
potential releases into the environment and, if necessary, to perform corrective
action. The subsidiary successfully appealed the EPA's order. On June 27,
1994, the EPA indicated it planned to issue a new, similar order. The
subsidiary, the EPA and the Florida Department of Environmental Protection
(FDEP) are negotiating an agreement to investigate and, if necessary, take
corrective action to resolve the dispute. Estimated costs to perform an agreed
upon investigation and any related corrective actions are not material and have
been provided for in the financial statements as of December 31, 1995. If
current negotiations with the EPA and the FDEP are unsuccessful, and the EPA
issues a new order, the subsidiary expects it would appeal the new order. If
this appeal is unsuccessful, the costs to perform any required investigation
and, if necessary, corrective action cannot be reasonably estimated. One-half of
any costs, including the costs of voluntary actions, would be reimbursed to the
Company under a contractual obligation of a former joint owner of the
subsidiary. No provision for the costs of performing investigation
3
and corrective action beyond any agreed upon investigation and remediation
mentioned above has been recorded in the Company's financial statements. If any
such additional investigation and corrective action is required, management
believes the possibility of a material adverse effect on the Company's
consolidated financial condition or results of operations is remote.
ITEM 2. PROPERTIES
The Company has approximately 170 locations in North America,
including 32 states in the United States. The Company's most important physical
properties are its manufacturing plants. These manufacturing plants include five
wire drawing mills, three welded steel tubing mills and approximately 60 major
manufacturing facilities. The balance of the Company's locations are engaged in
assembly, warehousing, sales, administration or research and development. In
addition, the Company has several locations in foreign countries. Its corporate
headquarters are located in Carthage, Missouri.
Most of the Company's major manufacturing plants are owned by the
Company. The Company also conducts certain of its operations in leased premises.
Terms of the leases, including purchase options, renewals and maintenance costs,
vary by lease. For additional information regarding lease obligations, reference
is made to Note F 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 for quick
and efficient deliveries and necessary service to the Company's diverse customer
base.
ITEM 3. LEGAL PROCEEDINGS
The Company is a defendant in numerous workers' compensation, product
liability, vehicle accident, employment termination, and other claims and legal
proceedings, the resolution of which management believes will not have a
material adverse effect on the consolidated financial condition or results of
operations of the Company in the ordinary course of business.
The Company is presently party to a small number of proceedings in
which a governmental authority is a party and which involve provisions enacted
regulating the discharge of materials into the environment. These proceedings
deal primarily with waste disposal site remediation. Management believes that
potential monetary sanctions, if imposed in any or all of these proceedings, or
any capital expenditures or operating expenses attributable to these
proceedings, will not have a material adverse effect on the consolidated
financial condition or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
4
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS
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.
Price Range
---------------- Volume of Dividend
High Low Shares Traded Declared
------- ------- ------------- ---------
1995
Fourth Quarter $26.875 $19.875 10,968,900 $ .10
Third Quarter 26.438 21.750 11,293,000 .10
Second Quarter 22.438 18.813 10,907,000 .09
First Quarter 21.438 17.000 9,863,400 .09
For the Year 26.875 17.000 43,032,300 .38
1994
Fourth Quarter $18.938 $16.688 8,249,800 $.080
Third Quarter 20.000 16.625 13,432,600 .080
Second Quarter 22.750 17.750 11,431,200 .075
First Quarter 24.750 20.813 8,839,400 .075
For the Year 24.750 16.625 41,953,000 .31
Price and volume data reflect composite transactions and prices as reported
daily by The Wall Street Journal. Adjustments have been made to reflect a
September 15, 1995 two-for-one stock split.
At March 1, 1996 the Company had 9,403 shareholders of record.
5
ITEM 6. SELECTED FINANCIAL DATA
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(Dollar amounts in millions,
except per share data)
SUMMARY OF OPERATIONS
Net sales............................. $2,059.3 $1,858.1 $1,526.7 $1,315.0 $1,221.4
Earnings from continuing operations... 134.9 115.4 85.9 65.4 40.0
Earnings per share.................... 1.59 1.39 1.04 .82 .54
Cash dividends declared per share..... .38 .31 .27 .23 .22
SUMMARY OF FINANCIAL POSITION
Total assets.......................... $1,218.3 $1,119.9 $ 901.9 $ 772.0 $ 746.7
Long-term debt........................ 191.9 204.9 165.8 147.9 232.7
Previously reported per share amounts have been restated to reflect a September
15, 1995 two-for-one stock split.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Previously reported share and per share amounts have been restated to
reflect a September 15, 1995 two-for-one stock split.
CAPITAL RESOURCES AND LIQUIDITY
The Company's financial position reflects several important principles
and guidelines of management's capital policy. These include management's belief
that corporate liquidity must always be adequate to support the Company's
projected internal growth rate. At the same time, liquidity must assure
management that the Company will be able to withstand any amount of financial
adversity that can reasonably be anticipated. Management also intends to direct
capital to strategic acquisitions and other investments that provide additional
opportunities for expansion and enhanced profitability.
Financial planning to meet these needs reflects management's belief
that the Company should never be forced to expand its capital resources, whether
debt or equity, at a time not of its choosing. Management also believes that
financial flexibility is more important than maximization of earnings per share
through excessive leverage. Therefore, management continuously provides for
available credit in excess of projected cash needs and has maintained a
guideline for long-term debt as a percentage of total capitalization in a range
of 30% to 40%.
Internally generated funds provided $521.9 million in capital during
the last three years. Long-term debt outstanding was 19% of total capitalization
at the end of 1995 and 23% at the end of the prior two years. Obligations having
scheduled maturities are the base "layer" of the Company's debt capital. At the
end of 1995, these obligations totaled $174.4 million, consisting primarily of
privately placed medium-term notes and tax-exempt industrial development bonds.
At the end of 1994, debt with scheduled maturities totaled $146.6 million, which
was up from $122.3 million a year earlier.
During each of the last two years, the Company issued $25 million in
unsecured privately placed debt under a medium-term note program. The notes
issued in 1995 mature in ten years and have a fixed interest rate of 7.0%. The
1994 notes were issued with average lives of eight years and fixed interest
rates averaging 7.6%. Proceeds from these notes were used to repay a portion of
the Company's revolving credit. In 1993, the Company issued $50 million of
medium-term notes. These notes were issued with average lives of approximately
nine years and fixed interest rates
6
averaging 5.8%. Debt of a company acquired in a September 1993 pooling of
interests transaction was repaid with the majority of the proceeds from these
notes.
In November 1994, Standard & Poor's and Moody's, the nation's leading
debt rating agencies, both increased their ratings of the Company's senior debt.
Standard & Poor's increased its rating to A from A-, and Moody's increased its
rating to A2 from A3.
The Company's second "layer" of debt capital consists of revolving
credit agreements with seven banks. Over the years, management has renegotiated
these bank credit agreements and established a commercial paper program to keep
pace with the Company's projected growth and to maintain highly flexible sources
of debt capital. The credit under these arrangements has been a long-term
obligation. If needed, however, the credit is also available for short-term
borrowings and repayments. At the end of 1995, there was $17.5 million in
revolving debt/commercial paper outstanding, down from $58.3 million in 1994 and
$43.5 million in 1993. This decrease was a result of repayments from the
proceeds made available through the issuance of medium-term notes. Also,
internally generated funds were used, as available, to reduce debt outstanding
during the last three years. Additional details of long-term debt outstanding,
including scheduled maturities, revolving credit and commercial paper are
discussed in Note E of the Notes to Consolidated Financial Statements.
The following table shows, in millions, the Company's capitalization
at the end of the three most recent years. It also shows the amount of
additional capital available through the revolving bank credit agreements. In
addition, the amounts of cash and cash equivalents are shown.
1995 1994 1993
------ ------ ------
Long-term debt outstanding:
Scheduled maturities $174.4 $146.6 $122.3
Revolving credit/commercial paper 17.5 58.3 43.5
------ ------ ------
Total long-term debt 191.9 204.9 165.8
Shareholders' equity 734.1 625.2 515.6
Unused committed credit 200.0 156.7 116.5
Cash and cash equivalents 6.7 2.7 .4
Net capital investments to modernize and expand manufacturing capacity
internally totaled $230.6 million in the last three years. In 1996, management
anticipates internal investments will be at levels approximating those of 1995.
During the last three years, the Company also employed $185.5 million in cash
(net of cash acquired) and issued 5.2 million shares of common stock in
acquisitions. During 1995, the Company acquired eight businesses for $28.7
million in cash (net of cash acquired) and .7 million shares of common stock.
Additional details of acquisitions are discussed in Note C of the Notes to
Consolidated Financial Statements. Purchases of common stock for the Company's
treasury totaled $24.5 million in 1995 and $1.2 million the preceding two years.
These purchases were made primarily for employee stock plans and, in 1995, to
replace shares issued in purchase acquisitions. Cash dividends on the Company's
common stock in the last three years totaled $78.4 million.
The Company has substantial capital resources to support projected
internal cash needs and additional acquisitions consistent with management's
goals and objectives. In addition, the Company has the availability of short-
term uncommitted credit from several banks. However, there was no short-term
debt outstanding at the end of any of the last three years.
Working capital increased $107.7 million in the last three years. To
gain additional flexibility in capital management and to improve the rate of
return on shareholders' equity, the Company continuously seeks efficient use of
working capital. The following table shows the annual turnover on average year-
end working capital, trade receivables and inventories. The ratios may be
affected by the timing of the Company's acquisitions.
7
1995 1994 1993
---- ---- ----
Working capital turnover (excluding cash
and cash equivalents)................... 6.4x 6.4x 6.1x
Trade receivables turnover................ 8.1 8.2 8.3
Inventory turnover........................ 5.9 6.2 6.0
Future commitments under lease obligations are described in Note F and
contingent obligations are discussed in Note K of the Notes to Consolidated
Financial Statements.
RESULTS OF OPERATIONS
The results of operations during the last three years reflect various
elements of the Company's long-term growth strategy, along with general trends
in the economy and the markets the Company serves. The Company's growth
strategy continues to include both internal programs and acquisitions which
broaden product lines and provide for increased market penetration and operating
efficiencies. With a continuing emphasis on the development of new and improved
products and advancements in production technologies, the Company is able to
consistently offer high quality products, competitively priced.
During 1995, demand was mixed in the various furnishings markets the
Company serves. Industry sales and shipments of office, institutional and
commercial furnishings generally strengthened. By contrast, industry sales and
shipments of residential furniture softened during the year in response to
weakening retail sales. The demand for bedding products, however, was generally
stronger than the demand for most other kinds of residential furniture.
Additionally, in contrast to 1994, industry sales and shipments of furniture and
bedding experienced a more normal seasonal slowdown near the end of 1995. These
two markets previously had experienced above average growth in each of the three
preceding years. The Company's strongest percentage growth in 1995 sales
continued to come from niche markets for specialized furnishings and other
diversified products.
Trends in the general economy were favorable during the last three
years. In 1995, economic growth moderated. By contrast, 1994 economic growth
increased as the year progressed. In 1993, growth was modest during most of the
year, but increased in the fourth quarter.
Management expects modest economic growth in 1996, with only modest
inflation. While severe winter weather impacted business early in the year,
management believes these should be temporary adversities. Management also
believes the Company's prospects for long-term profitable growth remain
attractive.
The Company's consolidated net sales increased 11% in 1995, 22% in
1994, and 16% in 1993, when compared with prior years. Roughly three-fourths of
the increase for 1995, one-half for 1994 and two-thirds for 1993 resulted from
acquisitions, with the remainder coming from internal growth. These increases in
internal growth primarily reflected higher unit volumes.
In response to increasing prices for raw materials, the Company
implemented some increases in selling prices, primarily in 1994 and 1993. While
the percentages and timing varied considerably, the largest 1994 increases were
concentrated in aluminum products. In 1993, the increases were concentrated in
steel and wire products. However, some of the 1993 and additional 1994 cost
increases for steel and wire products were not passed along in the Company's
selling prices until the end of 1994, or the first half of 1995.
8
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.
1995 1994 1993
------ ------ ------
Gross profit margin.................... 23.8% 23.1% 22.9%
Pre-tax profit margin.................. 10.7 10.2 9.2
Net profit margin...................... 6.6 6.2 5.6
Effective income tax rate.............. 38.9 39.1 39.1
Interest coverage ratio................ 20.2x 20.3x 14.8x
The Company's profit margins improved in each of the last three years.
Increased margins for 1995 primarily reflect an improvement in the gross profit
margin. This improvement was due primarily to the Company's continuing growth in
niche markets with above average margins, increased production efficiencies and
cost containment.
The 1994 gross profit margin increased slightly from 1993, primarily
reflecting improved market conditions in the aluminum and foam industries and
gains in overall manufacturing efficiencies on higher volume. These favorable
factors more than offset cost/price pressures the Company continued to
experience in operations producing steel products. The pre-tax profit margin in
1994 increased to 10.2%. This improvement reflected a 0.4% reduction in total
selling, distribution and administrative expenses, as a percentage of sales. In
addition, interest expense and other deductions, net of other income, decreased
slightly as a percentage of sales.
The 1993 pre-tax profit margin increased to 9.2% of sales. This
improvement primarily reflected a 0.7% reduction in selling, distribution and
administrative expenses, as a percentage of sales. Increased efficiencies and
reduced bad debt expense contributed to the improvement in operating expense
ratios. These factors and a slight increase in other income more than offset one
time charges related to acquisitions and the Company's implementation of new
accounting statements issued by the Financial Accounting Standards Board.
Interest expense, as a percentage of sales, was reduced 0.4% and further
improved the pre-tax profit margin. Reduced debt outstanding (before 1993
acquisitions) and lower interest rates were reflected in this improvement.
The effective 1995 income tax rate decreased slightly to 38.9%, when
compared to 39.1% in both of the preceding two years.
STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS NOT YET ADOPTED
Statement of Financial Accounting Standards (SFAS) No. 121, which the
Company will adopt in 1996, establishes accounting standards for the impairment
of long-lived assets and certain other intangible assets. Management is
currently analyzing the impact of the adoption of SFAS No. 121, but does not
anticipate any material impact on the Company's consolidated financial
statements.
SFAS No. 123, "Accounting For Stock-Based Compensation," establishes
financial accounting and reporting standards for stock-based employee
compensation plans. SFAS No. 123 permits, as one alternative, the use of
existing accounting rules for such plans. The Company will adopt this
alternative in 1996 and, therefore, SFAS No. 123 will have no effect on the
Company's consolidated financial statements, except for the additional required
disclosures.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and supplementary data included
in this Report begin on page 13.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
9
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 15, 1996, 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 elected annually by
the Board of Directors at the first meeting of directors following the Annual
Meeting of Shareholders.
The description of the executive officers of the Company is as
follows:
NAME AGE POSITION
---- --- --------
Harry M. Cornell, Jr. 67 Chairman of the Board and Chief
Executive Officer
Felix E. Wright 60 President, Chief Operating Officer
and Director
Roger D. Gladden 50 Senior Vice President and President--
Commercial Products Group
Michael A. Glauber 53 Senior Vice President, Finance and
Administration (Principal Financial
Officer and Principal Accounting
Officer)
David S. Haffner 43 Executive Vice President and Director
Jerry H. Hudkins 60 Vice President and President--Wire Group
Robert A. Jefferies, Jr. 54 Senior Vice President, Mergers,
Acquisitions and Strategic Planning and
Director
Ernest C. Jett 50 Vice President, Secretary and Managing
Director, Legal Department
Duane W. Potter 64 Senior Vice President and President--
Foam Components Group
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.
Roger D. Gladden was elected Senior Vice President in 1992. He has
been President--Commercial Products Group since 1984 and previously served as
Vice President--Administration.
Michael A. Glauber has served as the Company's Senior Vice President,
Finance and Administration 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 and as President--Furniture
Components Group and Vice President of the Company from 1985 to 1992.
Jerry H. Hudkins has served the Company as Vice President and
President--Wire Group for more than the last five years.
10
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.
Ernest C. Jett 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 since 1991.
Duane W. Potter was elected Senior Vice President and President--Foam
Components Group in 1995. He previously served as Senior Vice President and
President--Bedding Components Group from 1983 to 1995.
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 15, 1996, 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 15, 1996, 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 15,
1996 is incorporated by reference.
11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
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, 1995
. Consolidated Balance Sheets at December 31, 1995 and 1994
. Consolidated Statements of Cash Flows for each of the years in
the three year period ended December 31, 1995
. Consolidated Statements of Changes in Shareholders' Equity for
each of the years in the three year period ended December 31,
1995
. Notes to Consolidated Financial Statements
. Schedule for each of the years in the three year period ended
December 31, 1995
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 1995: None.
12
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
TABLE OF CONTENTS
Page
----
Quarterly Summary of Earnings.............................................. 14
Consolidated Statements of Earnings........................................ 15
Consolidated Balance Sheets................................................ 16
Consolidated Statements of Cash Flows...................................... 17
Consolidated Statements of Changes in Shareholders' Equity................. 18
Notes to Consolidated Financial Statements................................. 19
Report of Independent Accountants.......................................... 29
13
QUARTERLY SUMMARY OF EARNINGS
Leggett & Platt, Incorporated and Subsidiaries
(Unaudited)
(Dollar amounts in millions, except per share data)
Year ended December 31, 1995 First Second Third Fourth Total
Net sales $523.1 $517.7 $523.6 $494.9 $2,059.3
Gross profit 121.9 123.2 123.9 122.0 491.0
Earnings before income taxes 54.2 54.2 57.1 55.2 220.7
Net earnings 32.9 33.0 34.8 34.2 134.9
====== ====== ====== ====== ========
Earnings per share $ .39 $ .39 $ .41 $ .40 $ 1.59
====== ====== ====== ====== ========
Year ended December 31, 1994
Net sales $434.6 $448.8 $482.6 $492.1 $1,858.1
Gross profit 98.6 104.3 110.6 115.5 429.0
Earnings before income taxes 42.8 46.6 49.9 50.2 189.5
Net earnings 26.0 28.2 30.2 31.0 115.4
====== ====== ====== ====== ========
Earnings per share $ .32 $ .34 $ .36 $ .37 $ 1.39
====== ====== ====== ====== ========
Previously reported per share amounts have been restated to reflect a September
15, 1995 two-for-one stock split.
14
CONSOLIDATED STATEMENTS OF EARNINGS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
Year ended December 31 1995 1994 1993
Net sales $2,059.3 $1,858.1 $1,526.7
Cost of goods sold 1,568.3 1,429.1 1,177.7
-------- -------- --------
Gross profit 491.0 429.0 349.0
Selling, distribution and administrative expenses 254.8 227.0 192.4
Interest expense 11.5 9.8 10.2
Other deductions, net of other income 4.0 2.7 5.4
-------- -------- --------
Earnings before income taxes 220.7 189.5 141.0
Income taxes 85.8 74.1 55.1
-------- -------- --------
Net earnings $ 134.9 $ 115.4 $ 85.9
======== ======== ========
Earnings per share $ 1.59 $ 1.39 $ 1.04
======== ======== ========
The accompanying notes are an integral part of these financial statements.
15
CONSOLIDATED BALANCE SHEETS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions)
December 31 1995 1994
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6.7 $ 2.7
Trade receivables, less allowance of $7.5 in 1995 and 1994 248.0 245.3
Other receivables 6.2 9.0
Inventories
Finished goods 153.7 134.5
Work in process 32.2 32.1
Raw materials and supplies 110.7 103.1
LIFO reserve (19.8) (14.2)
-------- --------
Total inventories 276.8 255.5
Other current assets 34.2 32.2
-------- --------
Total current assets 571.9 544.7
PROPERTY, PLANT AND EQUIPMENT - AT COST
Machinery and equipment 515.7 430.1
Buildings and other 268.9 246.9
Land 23.8 22.5
-------- --------
808.4 699.5
Less accumulated depreciation 356.6 303.5
-------- --------
Net property, plant and equipment 451.8 396.0
OTHER ASSETS
Excess cost of purchased companies over net assets acquired,
less accumulated amortization of $17.8 in 1995 and $14.4 in 1994 133.6 115.1
Other intangibles, less accumulated amortization of $15.6 in 1995 and $12.5 in 1994 22.2 27.4
Sundry 38.8 36.7
-------- --------
Total other assets 194.6 179.2
-------- --------
TOTAL ASSETS $1,218.3 $1,119.9
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 4.0 $ 3.9
Accounts payable 90.4 89.9
Income taxes 7.3 9.5
Accrued expenses 105.3 96.5
Other current liabilities 19.8 33.1
-------- --------
Total current liabilities 226.8 232.9
LONG-TERM DEBT 191.9 204.9
OTHER LIABILITIES 17.7 14.7
DEFERRED INCOME TAXES 47.8 42.2
SHAREHOLDERS' EQUITY
Capital stock
Preferred stock - authorized, 100,000,000 shares; none issued
Common stock - authorized, 300,000,000 shares of $.01 par value; issued
84,405,384 and 41,608,174 shares in 1995 and 1994, respectively .8 .4
Additional contributed capital 155.0 134.7
Retained earnings 598.0 496.5
Cumulative translation adjustment (5.0) (6.1)
Less treasury stock - at cost (644,539 and 11,065 shares in 1995 and 1994 respectively) (14.7) (.3)
-------- --------
Total shareholders' equity 734.1 625.2
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,218.3 $1,119.9
======== ========
The accompanying notes are an integral part of these financial statements.
16
CONSOLIDATED STATEMENTS OF CASH FLOWS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions)
Year ended December 31 1995 1994 1993
OPERATING ACTIVITIES
Net earnings $ 134.9 $ 115.4 $ 85.9
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation 58.0 48.8 39.1
Amortization 9.1 8.1 6.2
Deferred income tax (benefit) expense (.6) (6.6) 8.6
Other (.2) 2.0 (.9)
Other changes, net of effects from
purchases of companies
Decrease (increase) in accounts receivable, net 11.4 (29.1) (9.2)
Increase in inventories (14.8) (22.2) (4.4)
Increase in other current assets (.7) (4.9) (2.9)
Increase in current liabilities 6.1 61.5 23.3
------- ------- -------
Net Cash Provided by Operating Activities 203.2 173.0 145.7
INVESTING ACTIVITIES
Additions to property, plant and equipment (93.9) (88.5) (54.2)
Purchases of companies, net of cash acquired (28.7) (78.8) (78.0)
Other (.6) .7 2.8
------- ------- -------
Net Cash Used for Investing Activities (123.2) (166.6) (129.4)
FINANCING ACTIVITIES
Additions to debt 62.5 49.1 58.1
Payments on debt (83.2) (29.6) (57.8)
Dividends paid (31.9) (25.4) (21.1)
Sales of common stock 3.0 2.2 1.6
Purchases of common stock (24.5) (1.1) (.1)
Other (1.9) .7 (1.8)
------- ------- -------
Net Cash Used for Financing Activities (76.0) (4.1) (21.1)
------- ------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 4.0 2.3 (4.8)
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR 2.7 .4 5.2
------- ------- -------
CASH AND CASH EQUIVALENTS - END OF YEAR $ 6.7 $ 2.7 $ .4
======= ======= =======
SUPPLEMENTAL INFORMATION
Interest paid $ 11.0 $ 9.2 $ 16.7
Income taxes paid 87.4 68.1 45.3
Liabilities assumed of acquired companies 20.2 40.4 21.8
Common stock issued for acquired companies 8.2 13.8 2.0
Stock issued for employee stock plans 17.4 8.2 6.6
======= ======= =======
The accompanying notes are an integral part of these financial statements.
17
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
Additional Cumulative Treasury Stock
Common Contributed Retained Translation --------------------
Stock Capital Earnings Adjustment Cost Shares
BALANCES - JANUARY 1, 1993 $ 39.9 $ 70.6 $336.2 $ (.8) $ (4.3) 136,196
Common stock issued, primarily for
employee stock plans (376,314 shares) .2 6.2
Treasury stock issued for acquired companies
and employee stock plans (.3) 5.6 (168,717)
Treasury stock purchased, primarily
for employee stock plans (1.6) 40,099
Tax benefit related to stock options 1.1
Change in par value of common stock (39.7) 39.7
Translation adjustment (2.0)
Net earnings for the year 85.9
Cash dividends declared ($.27 per share) (21.1)
------ ------ -------- ----- ------ --------
BALANCES - DECEMBER 31, 1993 .4 117.3 401.0 (2.8) (.3) 7,578
Common stock issued for acquired companies
and employee stock plans (1,282,213 shares) 17.0
Treasury stock issued for employee stock plans (.1) 2.1 (47,773)
Treasury stock purchased, primarily
for employee stock plans (2.1) 51,260
Tax benefit related to stock options .5
Translation adjustment (3.3)
Retained earnings of pooled
companies at date of acquisition 5.5
Net earnings for the year 115.4
Cash dividends declared ($.31 per share) (25.4)
------ ------ -------- ----- ------ --------
BALANCES - DECEMBER 31, 1994 .4 134.7 496.5 (6.1) (.3) 11,065
Common stock issued for acquired companies
and employee stock plans (602,264 shares) 22.5
Treasury stock issued for employee stock plans (2.3) 11.4 (372,906)
Treasury stock purchased, primarily for employee
stock plans and to replace shares issued
for purchased companies (25.8) 887,712
Tax benefit related to stock options .5
Additional shares issued in two-for-one stock
split effected in the form of a stock dividend
September 15, 1995 (42,194,946 shares) .4 (.4) 118,668
Translation adjustment 1.1
Retained earnings of pooled
company at date of acquisition (1.5)
Net earnings for the year 134.9
Cash dividends declared ($.38 per share) (31.9)
------ ------ -------- ----- ------ --------
BALANCES - DECEMBER 31, 1995 $ .8 $155.0 $598.0 $(5.0) $(14.7) 644,539
====== ====== ======== ===== ====== ========
The accompanying notes are an integral part of these financial statements.
18
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Leggett & Platt, Incorporated and Subsidiaries
(Dollar amounts in millions, except per share data)
December 31, 1995, 1994 and 1993
A-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of Leggett & Platt, Incorporated and its majority-owned
subsidiaries (the Company). All significant intercompany transactions and
accounts have been eliminated in consolidation.
CASH EQUIVALENTS: Cash equivalents include cash in excess of daily
requirements which is invested in various financial instruments with original
maturities of three months or less.
INVENTORIES: All inventories are stated at the lower of cost or market. Cost
includes materials, labor and production overhead. Cost is determined by the
last-in, first-out (LIFO) method for approximately 70% of the inventories at
December 31, 1995 and 1994. The first-in, first-out (FIFO) method is used for
the remainder. The FIFO cost of inventories at December 31, 1995 and 1994
approximated replacement cost.
DEPRECIATION, AMORTIZATION AND ASSET REALIZATION: Property, plant and
equipment are depreciated by the straight-line method. The rates of
depreciation range from 8.3% to 25% for machinery and equipment, 2.5% to 6.7%
for buildings and 12.5% to 33% for other items. Accelerated methods are used
for tax purposes. The excess cost of purchased companies over net assets
acquired is amortized by the straight-line method over forty years. Other
intangibles are amortized by the straight-line method over their estimated
lives. Assets subject to periodic depreciation or amortization are evaluated
for probable realization, and appropriate adjustment of their carrying value is
made when realization is not assured. The excess cost of purchased companies
over net assets acquired is evaluated using estimated undiscounted cash flows
over the remaining amortization period.
COMPUTATIONS OF EARNINGS PER SHARE: Earnings per share is based on the
weighted average number of common and common equivalent shares outstanding.
Common stock equivalents result from the assumed issuance of shares under stock
option plans.
CONCENTRATION OF CREDIT RISKS, EXPOSURES AND FINANCIAL INSTRUMENTS: The
Company specializes in manufacturing, marketing, and distributing components and
other related products for the furnishings industry and diversified markets.
The Company's operations are principally in the United States, although the
Company also has subsidiaries in Canada and Europe.
The Company performs ongoing credit evaluations of its customers' financial
conditions and, generally, requires no collateral from its customers, some of
which are highly leveraged. The Company maintains allowances for potential
credit losses and such losses have generally been within management's
expectations.
From time to time, the Company will enter into forward exchange contracts to
hedge equipment purchase commitments in foreign currencies. The amounts
outstanding under the forward contracts at any point in time are not significant
to the Company. The Company has minimal continuing exposures to other foreign
currency transactions and interest rate fluctuations, none of which have been
hedged by the use of derivative instruments.
The carrying value of cash and short-term financial instruments approximates
fair value due to the short maturity of those instruments. The carrying value
of long-term debt approximates fair value due to the use of variable interest
rates and fixed rate debt which approximates current interest rates.
OTHER RISKS: The Company obtains insurance for worker's compensation,
automobile, product and general liability, property loss and medical claims.
However, the Company has elected to retain a significant portion of expected
losses through the use of deductibles. Provisions for losses expected under
these programs are recorded based upon the Company's estimates of the aggregate
liability for claims incurred. These estimates utilize the Company's prior
experience and actuarial assumptions that are provided by the Company's
insurance carrier.
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
subsidiaries where appropriate. The tax effect of most such distributions would
be significantly offset by available foreign tax credits.
19
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
B-STOCK SPLIT
On September 15, 1995, the Company distributed a two-for-one stock split in
the form of a stock dividend. All references to the number of shares and per
share amounts have been restated to reflect the split, except on the
Consolidated Statements of Changes in Shareholders' Equity. In these
statements, shares issued and purchased prior to September 15, 1995 are
reflected on a pre-split basis.
C-ACQUISITIONS
During 1995, the Company acquired the assets of seven companies that primarily
manufacture and distribute components to the furnishings industry. These
transactions, accounted for as purchases, resulted in the use of $28.7 in cash,
net of cash acquired, and 354,448 shares of common stock. The Company also
issued 325,000 shares of common stock to acquire a business in a transaction
accounted for as a pooling of interests. This company manufactures and
distributes formed wire products to the furnishings industry. The Company
elected not to restate its financial statements as the effect of the pooling was
not material. Pro forma results of operations for the twelve months ended
December 31, 1995 and 1994 are not materially different from the amounts
reflected in the accompanying financial statements.
During 1994, the Company acquired certain assets of eight companies in
exchange for $78.8 in cash, net of cash acquired, and 44,756 shares of common
stock in transactions accounted for as purchases. These companies primarily
specialize in manufacturing and distributing components and certain other
products to the furnishings industry. The Company also issued 1,156,872 shares
of common stock to acquire two companies during the year in transactions
accounted for as poolings of interests. The Company elected not to restate its
financial statements as the effect of the poolings was not material. The pooled
companies specialize in manufacturing and distributing point-of-purchase store
displays and other formed wire products to the furnishings and diversified
industries.
In September 1993, the Company issued 3,158,708 shares of common stock to
acquire Hanes Holding Company (Hanes) in a transaction accounted for as a
pooling of interests. Hanes' business consists of converting and distributing
woven and nonwoven construction fabrics, primarily in the furnishings industry.
In addition, Hanes is a commission dye/finisher of non-fashion fabrics for the
furnishings and apparel industries. In another pooling of interests
transaction, the Company issued 137,576 shares of common stock to acquire a
company whose business is manufacturing furniture components for the furnishings
industry. Prior year financial statements were restated for these poolings of
interests.
In September 1993, the Company acquired VWR Textiles & Supplies (through
Hanes) which converts and distributes construction fabrics and manufactures and
distributes other soft goods components to the furnishings industry. The
purchase price of this acquisition was approximately $26. Also in 1993, the
Company acquired full ownership of several wire drawing mills which previously
had been jointly owned. This transaction involved $33 in cash and the
assumption of approximately $3.6 of long-term debt. In addition, the Company
acquired several smaller companies during 1993 which primarily manufacture and
distribute products to the furnishings industry.
The results of operations of these acquired companies, except the 1993
poolings, have been included in the consolidated financial statements since the
dates of acquisition.
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
D-ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities at December 31 consist of
the following:
1995 1994
Accrued expenses
Wages and commissions payable $ 27.7 $ 27.7
Worker's compensation, medical, auto
and product liability insurance 36.2 33.0
Sales promotions 12.2 10.4
Other 29.2 25.4
------ ------
$105.3 $ 96.5
====== ======
Other current liabilities
Outstanding checks in excess of book balances $ 14.5 $ 26.1
Other 5.3 7.0
------ ------
$ 19.8 $ 33.1
====== ======
E-LONG-TERM DEBT
Long-term debt, weighted average interest rates and due dates at
December 31 are as follows:
1995 1994
Medium-term notes, fixed interest rates of 6.5% and 6.4%
for 1995 and 1994, respectively, due dates through 2008 $127.5 $103.5
Revolving credit agreements, variable interest rates of
6.5% for 1994 - 43.3
Commercial paper, variable interest rates of
6.0% and 6.1% for 1995 and 1994, respectively,
due dates in 1996 and 1995 17.5 15.0
Industrial development bonds, variable interest rates of
5.5% and 6.1% for 1995 and 1994, respectively,
due dates through 2030 34.4 32.3
Industrial development bonds, fixed interest rates of
6.9% for 1995 and 1994, due dates through 2024 5.2 5.5
Other, partially secured 11.3 9.2
------ ------
195.9 208.8
Less current maturities 4.0 3.9
------ ------
$191.9 $204.9
====== ======
21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
E-LONG-TERM DEBT (CONTINUED)
The revolving credit agreements provide for a maximum line of credit of
$200. For any revolving credit agreement, the Company may elect to pay interest
based on 1) the bank's base lending rate, 2) LIBOR, 3) an adjusted certificate
of deposit rate, or 4) the money market rate, as specified in the revolving
agreements. Certain agreements contain provisions under which outstanding
balances at the end of the third year may be converted into term loans payable
in ten equal semi-annual installments. These agreements provide for annual
commitment fees during the revolving agreement period of 3/16 of 1% of the
unused credit line, payable on a quarterly basis. Other agreements contain no
term loan provisions and will terminate at the end of five years at which time
all outstanding balances will become due. Annual facility fees on these
agreements are 1/10 of 1% of the total credit line, payable on a quarterly
basis.
Commercial paper is classified as long-term debt since the Company intends
to refinance it on a long-term basis either through continued issuance or unused
credit available under the revolving credit agreements.
The revolving credit agreements and certain other long-term debt contain
restrictive covenants which, among other restrictions, limit the amount of
additional debt, require working capital to be maintained at specified amounts
and restrict payments of dividends. Unrestricted retained earnings available for
dividends at December 31, 1995 were approximately $205.9.
Maturities of long-term debt for each of the five years following 1995 are:
Year ended December 31
1996 $ 4.0
1997 26.4
1998 13.7
1999 11.3
2000 38.9
F-LEASE OBLIGATIONS
The Company conducts certain of its operations in leased premises and also
leases most of its automotive and trucking equipment and some other assets.
Terms of the leases, including purchase options, renewals and maintenance costs,
vary by lease.
Total rental expense entering into the determination of results of
operations was $18.7, $18 and $17.4 for the years ended December 31, 1995, 1994
and 1993, respectively.
Future minimum rental commitments for all long-term noncancelable operating
leases are as follows:
Year ended December 31
1996 $10.8
1997 7.6
1998 4.7
1999 2.8
2000 1.3
Later years 1.5
-----
$28.7
=====
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.
22
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
G-CAPITAL STOCK
At December 31, 1995, the Company had 6,464,552 common shares authorized
for issuance under stock option plans. Generally, options are granted at not
less than quoted market value on the date of grant and become exercisable in
varying installments, beginning 6 to 18 months after the date of grant. However,
options have been granted at less than market value to replace existing options
of an acquired company or in lieu of compensation. Options outstanding at
December 31, 1995 that were granted at less than market value were 491,114.
Options exercisable were 1,656,270, 1,077,572 and 621,998 at December 31, 1995,
1994 and 1993, respectively.
Other data regarding the Company's stock options is summarized below:
Per
share
Shares price Total
Outstanding at January 1, 1993 3,064,840 $ 3-12 $28.6
Granted 340,382 16-22 6.8
Exercised (508,264) 3-12 (3.1)
Forfeited (59,786) 5-21 (.6)
--------- ------ -----
Outstanding at December 31, 1993 2,837,172 3-22 31.7
Granted 368,862 1-22 3.3
Exercised (320,064) 1-12 (2.5)
Forfeited (104,714) 7-21 (1.4)
--------- ------ -----
Outstanding at December 31, 1994 2,781,256 1-22 31.1
Granted 344,800 1-25 3.2
Exercised (418,533) 1-22 (4.4)
Forfeited (75,134) 11-22 (1.2)
--------- ------ -----
Outstanding at December 31, 1995 2,632,389 $ 1-25 $28.7
=========== ====== =====
The Company has also authorized shares for issuance in connection with
certain employee stock benefit plans discussed in Note H.
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.
In 1989, the Company declared a dividend distribution of one preferred
stock purchase right (a Right) for each share of common stock. The Rights are
attached to and traded with the Company's common stock. The Rights may only
become exercisable under certain circumstances involving actual or potential
acquisitions of the Company's common stock. Depending upon the circumstances, if
the Rights become exercisable, the holder may be entitled to purchase shares of
Series A junior preferred stock of the Company, shares of the Company's common
stock or shares of common stock of the acquiring entity. The Rights remain in
existence until February 15, 1999, unless they are exercised, exchanged or
redeemed at an earlier date.
23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
H-EMPLOYEE BENEFIT PLANS
The Company sponsors contributory and non-contributory pension and
retirement plans. Substantially all employees, other than union employees
covered by multiemployer plans under collective bargaining agreements, are
eligible to participate in the plans. Retirement benefits under the contributory
plans are based on career average earnings. Retirement benefits under the non-
contributory plans are based on years of service, employees' average
compensation and social security benefits. It is the Company's policy to fund
actuarially determined costs as accrued.
Information at December 31, 1995, 1994 and 1993 as to the funded status of
Company sponsored defined benefit plans, net pension income from the plans for
the years then ended and weighted average assumptions used in the calculations
are as follows:
1995 1994 1993
Funded Status
Actuarial present value
of benefit obligations
Vested benefits $(58.8) $(50.5) $(46.3)
Nonvested benefits (.6) (.6) (.6)
------ ------ ------
Accumulated benefit obligations (59.4) (51.1) (46.9)
Provision for future
compensation increases (3.1) (3.6) (3.3)
------ ------ ------
Projected benefit obligations (62.5) (54.7) (50.2)
Plan assets at fair value 87.1 75.2 78.1
------ ------ ------
Plan assets in excess of projected
benefit obligations 24.6 20.5 27.9
Unrecognized net experience gain (3.4) (.4) (9.6)
Unrecognized net transition asset (3.4) (4.1) (4.6)
------ ------ ------
Prepaid pension costs included
in other assets $ 17.8 $ 16.0 $ 13.7
====== ====== ======
Components of Pension Income (Expense)
Service cost $ (.8) $ (1.3) $ (.9)
Interest cost (4.1) (3.5) (3.3)
Actual return on plan assets 12.5 (1.9) 12.8
Net amortization and deferral (5.8) 9.0 (6.6)
------ ------ ------
Net pension income from
defined benefit plans $ 1.8 $ 2.3 $ 2.0
====== ====== ======
Weighted Average Assumptions
Discount rate 7.25% 7.50% 7.25%
Rate of increase in
compensation levels 5.18% 5.17% 5.14%
Expected long-term rate of
return on plan assets 8.00% 8.00% 8.00%
====== ====== ======
24
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
H-EMPLOYEE BENEFIT PLANS (CONTINUED)
Plan assets are invested in a diversified portfolio of equity, debt and
government securities, including 588,000 shares of the Company's common stock at
December 31, 1995.
Contributions to union sponsored, multiemployer pension plans were $.2 in
1995, 1994 and 1993. These plans are not administered by the Company and
contributions are determined in accordance with provisions of negotiated labor
contracts. As of 1995, the actuarially computed values of vested benefits for
these plans were equal to or less than the net assets of the plans. Therefore,
the Company would have no withdrawal liability. However, the Company has no
present intention of withdrawing from any of these plans, nor has the Company
been informed that there is any intention to terminate such plans.
Net pension income, including Company sponsored defined benefit plans,
multiemployer plans and other plans, was $.2, $.9 and $.7 in 1995, 1994 and
1993, respectively.
The Company also has a contributory stock purchase/stock bonus plan (SPSB
Plan), a non-qualified executive stock purchase program (ESPP) and an employees'
discount stock plan (DSP). The SPSB Plan provides Company pre-tax contributions
of 50% of the amount of employee contributions. The ESPP provides cash payments
of 50% of the employees' contributions, along with an additional payment to
assist employees in paying taxes on the cash payments. To the extent possible,
contributions to the ESPP are invested in the Company's common stock through the
DSP. In addition, the Company matches its contributions when certain
profitability levels, as defined in the SPSB Plan and the ESPP, have been
attained. The Company's total contributions to the SPSB Plan and the ESPP were
$4.3, $3.3 and $2.5 for 1995, 1994 and 1993, respectively.
Under the DSP, eligible employees may purchase a maximum of 8,000,000
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 506,613, 415,408 and 362,612 during 1995, 1994 and 1993,
respectively. Purchase prices ranged from $15 to $21 per share. Since inception
of the DSP in 1982, a total of 5,162,847 shares have been purchased by
employees.
I-INCOME TAXES
The components of earnings before income taxes are as follows:
Year ended December 31 1995 1994 1993
Domestic $198.9 $172.7 $128.7
Foreign 21.8 16.8 12.3
------ ------ ------
$220.7 $189.5 $141.0
====== ====== ======
Income tax expense is comprised of the following components:
Year ended December 31 1995 1994 1993
Current
Federal $ 69.5 $ 63.2 $ 34.5
State and local 9.5 10.9 7.4
Foreign 7.4 6.6 4.6
------ ------ ------
86.4 80.7 46.5
Deferred
Federal (2.5) (6.2) 7.2
State and local 1.3 .1 1.4
Foreign .6 (.5) -
------ ------ ------
(.6) (6.6) 8.6
------ ------ ------
$ 85.8 $ 74.1 $ 55.1
====== ====== ======
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
I-INCOME TAXES (CONTINUED)
Deferred income taxes are provided for the temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities. The major temporary differences that give rise to deferred tax
assets or liabilities at December 31, 1995 and 1994 are as follows:
December 31 1995 1994
Property, plant and equipment $(34.1) $(32.6)
Accrued expenses 30.6 23.0
Prepaid pension cost (6.9) (6.1)
Intangible assets (3.6) (4.6)
Other, net (11.3) (4.3)
------ ------
$(25.3) $(24.6)
====== ======
Deferred tax assets and liabilities included in the consolidated balance
sheet are as follows:
December 31 1995 1994
Other current assets $ 22.5 $ 17.6
Deferred income taxes (47.8) (42.2)
------ ------
$(25.3) $(24.6)
====== ======
Income tax expense, as a percentage of earnings before income taxes,
differs from the statutory federal income tax rate as follows:
Year ended December 31 1995 1994 1993
Statutory federal income tax rate 35.0% 35.0% 35.0%
Increases in rate resulting from
State taxes, net of federal benefit 3.4 3.8 4.0
Other .5 .3 .1
---- ---- ----
Effective tax rate 38.9% 39.1% 39.1%
==== ==== ====
26
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
J-INDUSTRY SEGMENT INFORMATION
The Company's operations principally consist of manufacturing, marketing
and distributing components and related finished products for the furnishings
industry. In addition, the Company supplies a diversified group of industries
with products which are similar in manufacturing technology to its furnishings
operations. Other than furnishings, no industry segment is significant.
Operating profit is determined by deducting from net sales the cost of
goods sold and the selling, distribution, administrative and other expenses
attributable to the segment operations. Corporate expenses not allocated to the
segments include corporate general and administrative expenses, interest expense
and certain other income and deduction items which are incidental to the
Company's operations. Capital expenditures, as defined herein, include amounts
relating to acquisitions as well as internal expenditures. The identifiable
assets of industry segments are those used in the Company's operations of each
segment. Corporate identifiable assets include cash, land, buildings and
equipment used in conjunction with corporate activities and sundry assets.
Financial information by segment is as follows:
Furnishings
Year ended December 31 Products Diversified Corporate Consolidated
1995
Net sales $1,558.1 $501.2 $ - $2,059.3
Operating profit 195.1 50.5 (24.9) 220.7
Capital expenditures 86.0 22.8 4.2 113.0
Depreciation and amortization expense 51.2 13.4 2.5 67.1
Identifiable assets 935.5 234.8 48.0 1,218.3
1994
Net sales $1,398.2 $459.9 $ - $1,858.1
Operating profit 153.4 54.7 (18.6) 189.5
Capital expenditures 91.5 30.1 3.9 125.5
Depreciation and amortization expense 42.8 12.2 1.9 56.9
Identifiable assets 834.2 244.6 41.1 1,119.9
1993
Net sales $1,195.8 $330.9 $ - $1,526.7
Operating profit 129.0 33.9 (21.9) 141.0
Capital expenditures 68.4 16.9 3.0 88.3
Depreciation and amortization expense 35.9 8.0 1.4 45.3
Identifiable assets 710.8 151.4 39.7 901.9
27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Leggett & Platt, Incorporated and Subsidiaries
K-CONTINGENCIES
From time to time, the Company is involved in proceedings related to
environmental matters. In one instance, the United States Environmental
Protection Agency (EPA) ordered one of the Company's subsidiaries to investigate
potential releases into the environment and, if necessary, to perform corrective
action. The subsidiary successfully appealed the EPA's order. On June 27,
1994, the EPA indicated it planned to issue a new, similar order. The
subsidiary, the EPA and the Florida Department of Environmental Protection
(FDEP) are negotiating an agreement to investigate and, if necessary, take
corrective action to resolve the dispute. Estimated costs to perform an agreed
upon investigation and any related corrective actions are not material and have
been provided for in the financial statements as of December 31, 1995.
If current negotiations with the EPA and the FDEP are unsuccessful, and the
EPA issues a new order, the subsidiary expects it would appeal the new order.
If this appeal is unsuccessful, the costs to perform any required investigation
and, if necessary, corrective action cannot be reasonably estimated. One-half
of any costs, including the costs of voluntary actions, would be reimbursed to
the Company under a contractual obligation of a former joint owner of the
subsidiary. No provision for the costs of performing investigation and
corrective action beyond any agreed upon investigation and remediation mentioned
above has been recorded in the Company's financial statements. If any such
additional investigation and corrective action is required, management believes
the possibility of a material adverse effect on the Company's consolidated
financial condition or results of operations is remote.
28
REPORT OF INDEPENDENT ACCOUNTANTS
Leggett & Platt, Incorporated and Subsidiaries
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 on page 12 present fairly, in all material respects, the financial
position of Leggett & Platt, Incorporated and Subsidiaries at December 31, 1995
and 1994, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 1995 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.
St. Louis, Missouri
February 8, 1996
29
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
Dated: March 28, 1996
By: /s/ HARRY M. CORNELL, JR.
----------------------------
Harry M. Cornell, Jr.
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
(a) PRINCIPAL EXECUTIVE OFFICER:
/s/ HARRY M. CORNELL, JR. Chairman of the Board and Chief March 28, 1996
-------------------------- Executive Officer
Harry M. Cornell, Jr.
(b) PRINCIPAL FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER:
/s/ MICHAEL A. GLAUBER Senior Vice President, Finance & March 28, 1996
-------------------------- Administration
Michael A. Glauber
(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
30
SIGNATURE TITLE DATE
--------- ----- ----
FRANK E. FORD, JR.* Director
--------------------------
Frank E. Ford, Jr.
DAVID S. HAFFNER* Director
--------------------------
David S. Haffner
ROBERT A. JEFFERIES, JR.* Director
--------------------------
Robert A. Jefferies, Jr.
ALEXANDER M. LEVINE* Director
--------------------------
Alexander M. Levine
RICHARD L. PEARSALL* Director
--------------------------
Richard L. Pearsall
MAURICE E. PURNELL, JR.* Director
--------------------------
Maurice E. Purnell, Jr.
FELIX E. WRIGHT* Director
--------------------------
Felix E. Wright
* By /s/ ERNEST C. JETT March 28, 1996
-------------------------
Ernest C. Jett
Attorney-in-Fact pursuant to Power of
Attorney dated March, 1996
31
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the three years ended December 31, 1995
(Amounts in millions)
Column A Column B Column C Column D Column E
-------- ---------- ---------- ---------- ----------
Additions
Charged
Balance at to Costs Balance at
Beginning of and End of
Description Period Expenses Deductions Period
- --------------- ------------ ---------- ---------- --------
Year ended December 31, 1995
Allowance for doubtful receivables.. $7.5 $5.8 $5.8 (A) $7.5
==== ==== ==== ====
Year ended December 31, 1994
Allowance for doubtful receivables.. $7.2 $5.7 $5.4 (A) $7.5
==== ==== ==== ====
Year ended December 31, 1993
Allowance for doubtful receivables.. $7.1 $2.8 $2.7 (A) $7.2
==== ==== ==== ====
- --------------------------------------
(A) Uncollectible accounts charged off, net of recoveries.
32
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ----------- ----------
3.1 The Restated Articles of Incorporation of the Company,
filed as Exhibit 3 to Registrant's Form 10-Q for the
quarter ended June 30, 1987, are incorporated by
reference.
3.2 Amendment to Restated Articles of Incorporation of the
Company, filed as Exhibit 3.1 to Form S-4 (Registration
No. 33-66238 which was filed with the Securities and
Exchange Commission on July 19, 1993), is incorporated
by reference.
3.3 By-Laws of the Company as amended and restated as of
August 11, 1993, filed as Exhibit 3.2 to Registrant's
Form 10-Q for the quarter ended June 30, 1993, are
incorporated by reference.
4.1 Article III of Registrant's Restated Articles of
Incorporation, filed as Exhibit 3.1 above, is
incorporated by reference.
4.2 Rights Agreement dated February 15, 1989 between
Registrant and The Chase Manhattan Bank, N.A.,
pertaining to preferred stock rights distributed by
Registrant, filed as Exhibit 1 to Registrant's Form
8-A dated February 15, 1989, and Amendment No. 1 to
Rights Agreement dated August 29, 1994, filed as
Exhibit 3 to Registrant's Form 8-A/A dated
September 8, 1994, are incorporated by reference.
4.2A Letter Agreement dated December 18, 1991 between
Registrant and Mellon Securities Trust Company
("Mellon") relating to appointment of Mellon as Rights
Agent under the Rights Agreement, filed as Exhibit
4.2A to Registrant's Form 10-K for the year ended
December 31, 1991, is incorporated by reference.
10.1/1/ Employment Agreement between the Company and Mr.
Cornell dated May 9, 1979, as amended, filed as
Exhibit 10.1 to Registrant's Form 10-K for the year
ended December 31, 1989, and Letter Agreement dated
March 15, 1993 amending Section 2.2 of Employment
Agreement, filed as Exhibit 10.1 to Registrant's Form
10-K for the year ended December 31, 1992, are
incorporated by reference.
10.1A/1/ Letter Agreement dated February 15, 1996 amending
Section 6.3 of Employment Agreement dated May 9, 1979
between the Company and Mr. Cornell.
10.2/1/ Employment Agreement between the Company and Mr.
Wright dated May 1, 1981, as amended, filed as Exhibit
10.2 to Registrant's Form 10-K for the year ended
December 31, 1989, is incorporated by reference.
33
10.3/1/ Employment Agreement between the Company and Mr.
Jefferies dated November 7, 1990, filed as Exhibit
10.3 to Registrant's Form 10-K for the year ended
December 31, 1990, and Amendment No. 1 to Employment
Agreement dated January 1, 1993, filed as Exhibit 10.3
to Registrant's Form 10-K for the year ended December
31, 1992, are incorporated by reference.
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 made to Appendix A to Registrant's
definitive Proxy Statement dated April 4, 1994 used in
conjunction with Registrant's Annual Meeting of
Shareholders held on May 11, 1994 for a copy of the
Company's 1989 Flexible Stock Plan, as amended, which
is incorporated by reference.
10.8/1/ Summary description of the Company's Key Management
Incentive Compensation Plan, filed as Exhibit 10.7 of
Registrant's Form 10-K for the year ended December 31,
1993, is incorporated by reference.
10.9/1/ Reference is made to description of certain long-term
disability arrangements between Registrant and its
salaried employees filed as Exhibit 10.7 of
Registrant's Form 10-K for the year ended December 31,
1991, which is incorporated by reference.
10.10/1/ Form of Indemnification Agreement approved by the
shareholders of Registrant and entered into between
Registrant and each of its directors and executive
officers.
10.11/1/ Registrant's Director Stock Option Plan, filed as
Appendix A to Registrant's definitive Proxy Statement
dated March 31, 1989 used in conjunction with
Registrant's Annual Meeting of Shareholders held on
May 10, 1989, and Amendment to Director Stock Option
Plan dated May 13, 1992, filed as Exhibit 10.10 to
Registrant's Form 10-K for the year ended December 31,
1992, are incorporated by reference.
10.12/1/ Reference is made to Leggett & Platt, Incorporated
Executive Stock Purchase Program adopted June 6, 1989
under the Company's 1989 Flexible Stock Plan, and
effective as of July 1, 1989, as amended on November
13, 1991, filed as Exhibit 10.11 of Registrant's Form
10-K for the year ended December 31, 1991, which is
incorporated by reference.
10.13/1/ Stock Award Agreement dated December 20, 1994 between
the Company and Harry M. Cornell, Jr., filed as
Exhibit 10.17 of Registrant's Form 10-K for the year
ended December 31, 1994, is incorporated by reference.
34
10.14/1/ Stock Award Agreement dated August 1, 1995 between the
Company and Felix E. Wright.
10.15/1/ Stock Award Agreement dated August 1, 1995 between the
Company and Duane W. Potter.
10.16/1/ Stock Award Agreement dated August 1, 1995 between the
Company and David S. Haffner.
10.17/1/ Stock Award Agreement dated December 28, 1995 between
the Company and Harry M. Cornell, Jr.
10.18/1/ Summary description of the Company's Deferred
Compensation Program.
11 Statement of Computation of Earnings Per Common Share.
21 Schedule of Subsidiaries of Registrant.
23 Consent of Independent Accountants.
24 Power of Attorney executed by members of the Company's
Board of Directors regarding this Form 10-K and
certain registration statements.
27 Financial Data Schedule
- --------------------
1. Denotes management contract or compensatory plan or arrangement.
35
EXHIBIT 10.1A
-------------
February 15, 1996
Harry M. Cornell, Jr.
1321 Northridge Terrace
Joplin, MO 64801
Re: Harry M. Cornell, Jr. Employment Agreement
Our File No. 2-111-2
Dear Harry:
Section 6.3 of your Employment Agreement dated May 9, 1979, as amended to
date, is further amended by inserting a new Section 6.3 in lieu of the current
Section 6.3. New Section 6.3 shall read as follows:
6.3 Amount of Annual Pension Payments
---------------------------------
The Executive's annual Pension Payments shall be the following
percentage of the Executive's Five Year Average Compensation:
If Termination of
Employment
is after October 4 Percentage
------------------ ----------
1995 62
1996 63
1997 64
1998 65
"Five Year Average Compensation" as used in this Agreement 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 before 1999 (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 during the given year (e.g., bonuses for the year 1995 paid
in February 1996, 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,
local, state and federal 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 received by the Executive from primary Social Security, as well as
amounts paid to Executive under any disability income insurance policies
which are attributable to premiums paid by the Company (all such amounts
being herein referred to as "Pension Reduction Amounts").
Please acknowledge your agreement to this amendment by signing and
returning to me the enclosed duplicate of this letter. Thank you.
Very truly yours,
LEGGETT & PLATT, INCORPORATED
/s/ R.A. Jefferies, Jr.
-------------------------------------
AGREED: Robert A. Jefferies, Jr.
Senior Vice President, Mergers,
/s/ Harry M. Cornell, Jr. Acquisitions and Strategic Planning
- ----------------------------------
Harry M. Cornell, Jr.
RAJj/lab
EXHIBIT 10.10
-------------
INDEMNIFICATION AGREEMENT
This AGREEMENT is made as of ___________________________________, by
Leggett & Platt, Incorporated, a Missouri corporation ("Leggett") and
____________________________________, of _______________________________________
("Indemnitee").
RECITALS
Indemnitee is a director and/or officer of Leggett and in such capacity or
capacities is performing a valuable service for Leggett.
The Restated Articles of Incorporation and By-Laws of Leggett provide for
the indemnification of the directors and officers of Leggett and indemnification
is also authorized by Section 351.355 of the General and Business Corporation
Law of Missouri (the "Indemnification Statute").
The Indemnification Statute and Leggett's Restated Articles of
Incorporation and By-Laws specifically provide that they are not exclusive as to
the authority to indemnify; thus, they contemplate that indemnification
agreements may be entered into between Leggett and its directors and officers.
In accordance with the authorization provided by the Indemnification
Statute, Leggett has purchased and presently maintains a policy or policies of
directors and officers liability insurance ("D&O Insurance"), covering certain
liabilities which may be incurred by Leggett's directors and officers in the
performance of their services for Leggett and for other enterprises.
Leggett's Board of Directors believes the policies of D&O Insurance and the
indemnification provided for in Leggett's Restated Articles of Incorporation and
By-Laws are not fully adequate to provide appropriate indemnification protection
to Leggett's directors and officers. To provide such protection and thereby
induce Indemnitee to serve or continue to serve as a director and/or officer of
Leggett, Leggett has determined and agreed to enter into this agreement with
Indemnitee.
NOW THEREFORE, in consideration of the premises and Indemnitee's service as
a director and/or officer after the date hereof, Leggett and Indemnitee do agree
as follows:
1. DEFINITIONS
In this Agreement the following terms have the following meanings:
The term "another enterprise" shall mean any corporation (other than
Leggett), partnership, joint venture, trust, employee benefit plan or other
legal entity or enterprise.
The term "defense" when used with respect to any proceeding shall include
investigations of any proceeding as well as appeals in any proceeding and shall
also include any defense by way of cross claim or counterclaim.
The term "fines" shall include any excise taxes assessed on Indemnitee with
respect to any employee benefit plan as well as penalties of all types.
The term "proceeding" shall mean any threatened, pending or completed
action, suit or proceeding (including those by or in the right of Leggett)
whether civil, criminal, administrative or investigative or otherwise and
whether formal or informal.
1
The term "serving at the request of Leggett" shall include any service as a
director, officer, employee or agent of Leggett which imposes duties on, or
involves services by, Indemnitee with respect to any employee benefit plan, it
participants or beneficiaries.
2. INDEMNIFICATION -- GENERAL
Leggett shall indemnify and hold harmless Indemnitee to the fullest extent
permitted or authorized by applicable law. The term "applicable law" means (i)
the Indemnification Statute (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 Leggett to provide broader indemnification rights
then the Indemnification Statute permitted Leggett to provide immediately prior
to such amendment) and (ii) any other statutory indemnification provisions
adopted after May 7, 1986.
3. ADDITIONAL INDEMNIFICATION
Leggett shall further indemnify and hold harmless Indemnitee if Indemnitee
was or is a party or is threatened to be made a party to any proceeding
(including any proceeding by or in the right of Leggett) by reason of the fact
that Indemnitee is or was a director, officer, employee or agent of Leggett, or
is or was serving at the request of Leggett (which request need not be in
writing) or on behalf of Leggett as a director, officer, employee or agent of
another enterprise or by reason of anything done or not done by him in any such
capacities. The indemnification required by this section shall be made against
any and all judgments, fines, amounts paid in settlement and reasonable expenses
(including attorneys' fees), actually incurred by Indemnitee in connection with
the proceeding in question.
4. MAINTENANCE OF D&O INSURANCE AND INDEMNIFICATION
(a) Leggett represents that it presently has the following policies of D&O
Insurance in force (the "D&O Policies"):
Insurer Policy No. Amount Deductible
------- ---------- ------ ----------
So long as Indemnitee shall continue to serve as a director or officer of
Leggett (or shall continue at the request of Leggett or on behalf of Leggett to
serve as a director, officer, employee or agent of another enterprise) and
thereafter so long as Indemnitee shall be subject to any possible claim or
proceeding by reason of the fact that Indemnitee was a director or officer of
Leggett (or served in any of said other capacities), Leggett will purchase and
maintain in effect for the benefit of Indemnitee one or more valid, binding and
enforceable policies of D&O Insurance providing, in all respects, coverage at
least comparable to that provided pursuant to the D&O Policies in force on the
date hereof.
(b) Notwithstanding Section 4(a) hereof, Leggett shall not be required to
maintain D&O Insurance in effect if such insurance is not reasonably available
or if, in the reasonable business judgment of the Board of Directors of Leggett
as it may exist from time to time, either (i) the premium cost for such D&O
Insurance is substantially disproportionate to the amount of coverage or (ii)
the coverage provided by such D&O Insurance is so limited by exclusions that
there is insufficient benefit provided by such D&O Insurance.
(c) If Leggett, acting under Section 4(b) hereof, does not purchase and
maintain in effect D&O Insurance, Leggett shall indemnify and hold harmless
Indemnitee to the full extent of the coverage which would otherwise have been
provided for the benefit of Indemnitee pursuant to the D&O Policies.
2
5. LIMITATIONS ON CERTAIN INDEMNIFICATION
Leggett will not hold Indemnitee harmless or provide indemnification
pursuant to Sections 2, 3 or 4 hereof:
(i) for amounts indemnified by Leggett other than pursuant to this
Agreement and amounts paid pursuant to policies of D&O Insurance;
(ii) in respect to remuneration paid to Indemnitee if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(iii) on account of any suit for any accounting of profits made from
the purchase or sale by Indemnitee of securities of Leggett pursuant to
Section 16(b) of the Securities Exchange Act of 1934 and amendments thereto
or similar provisions of any federal, state or local law;
(iv) on account of Indemnitee's conduct which is finally adjudged by a
court to have been knowingly fraudulent, deliberately dishonest or willful
misconduct; or
(v) if a final adjudication by a court having jurisdiction in the
matter shall determine that such indemnification is not lawful.
6. NOTIFICATION AND DEFENSE OF CLAIM
After receipt by Indemnitee of notice of the commencement of any
proceeding, Indemnitee will, if a claim in respect thereof may be made against
Leggett under this Agreement, promptly notify Leggett. With respect to any such
proceeding as to which Indemnitee notifies Leggett of the commencement thereof:
(i) Leggett will be entitled to participate therein at is own expense.
(ii) Except as otherwise provided in the next paragraph, Leggett,
jointly with any other indemnifying party similarly notified, will be
entitled to assume the defense thereof, with counsel reasonably
satisfactory to Indemnitee. After notice from Leggett to indemnitee of
Leggett's election to assume the defense thereof, Leggett will not be
liable to Indemnitee under this Agreement for any legal or other expenses
subsequently incurred by Indemnitee in the defense thereof other than
reasonable costs of investigation or as noted in the next paragraph of this
subsection (ii).
Indemnitee may employ his own counsel in such proceeding but the fees
and expenses of such counsel incurred after notice from Leggett of its
assumption of the defense thereof shall be at the expense of Indemnitee
unless (a) the employment of counsel by Indemnitee has been authorized by
Leggett or (b) Indemnitee shall have reasonably concluded that there may be
a conflict of interest between Leggett and Indemnitee in the conduct of the
defense of such proceeding, or (c) Leggett shall not in fact have employed
counsel to assume the defense of such proceeding, in each of which cases
the fees and expenses of Indemnitee's counsel shall be at the expense of
Leggett. Leggett shall not be entitled to assume the defense of any
proceeding brought by or on behalf of Leggett or as to which Indemnitee
shall have made the conclusion provided for in clause (b) of this
subsection (ii).
(iii) Leggett shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any proceeding effected
without Leggett's written consent. Leggett shall not settle any proceeding
in any manner which would impose any penalty or limitation on Indemnitee
without Indemnitee's written consent. Neither Leggett nor Indemnitee will
unreasonably withhold their consent to any proposed settlement.
3
7. ADVANCE OF EXPENSES, JUDGMENTS, ETC.
The expense (including attorneys' fees) incurred by Indemnitee in defending
any proceeding shall be advanced by Leggett at the request of the Indemnitee.
Any judgments, fines or amounts to be paid in settlement shall also be advanced
by Leggett to Indemnitee upon request. If it shall ultimately be determined
that Indemnitee was not entitled to be indemnified, or was not entitled to be
fully indemnified, Indemnitee shall repay to Leggett all amounts advanced, or
the appropriate portion thereof, so advanced.
8. RIGHT OF INDEMNITEE TO BRING SUIT
If a claim of indemnification or a claim for an advance under this
Agreement is not paid in full by Leggett within 90 or 15 days, respectively,
after a written claim has been made to Leggett, Indemnitee may bring suit
against Leggett to recover the unpaid amount of the claim. If Indemnitee is
successful in whole or in part in such suit, Indemnitee shall also be paid the
expense of prosecuting such claim.
9. CONTINUATION OF INDEMNITEE
All agreements and obligations of Leggett contained herein shall continue
during the period Indemnitee is a director, officer, employee or agent of
Leggett (of is or was serving at the request of Leggett or on behalf of Leggett
as a director, officer, employee or agent of another enterprise) and shall
continue thereafter so long as Indemnitee shall be subject to any possible
proceeding by reason of the fact that Indemnitee was a director, officer,
employee or agent of Leggett or serving in any other capacity referred to
herein.
10. OTHER RIGHTS AND REMEDIES
The indemnification and other rights provided by this Agreement shall not
be deemed exclusive of any other rights to which Indemnitee may be entitled
under any provision of law, Leggett's Restated Articles of Incorporation, any
Leggett By-Law, other agreement, vote of shareholders or disinterested directors
or otherwise, both as to action in Indemnitee's official capacity and as to
action in another capacity while occupying any of the positions or having any of
the relationships referred to in this Agreement, and shall continue after
Indemnitee has ceased to occupy such position or have such relationship.
11. SEVERABILITY
If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable (a) the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be in any way affected or impaired
thereby, and (b) to the fullest extent possible, the provisions of this
Agreement shall be construed so as to give effect to the intent manifested by
the provision held invalid, illegal or unenforceable.
Each section of this Agreement is a separate and independent portion of
this Agreement. If the indemnification to which Indemnitee is entitled as
respects any aspect of any claim varies between two or more sections of this
Agreement, that section providing the most comprehensive indemnification shall
apply.
12. MODIFICATION AND WAIVER
No supplement or amendment of this Agreement shall be binding unless
executed in writing by both of the parties. No waiver of any of the provisions
of this Agreement shall be binding unless executed in writing by the person
making the waiver nor shall such waiver constitute a continuing waiver.
4
13. NOTICES
All notices, requests, demand and other communications hereunder shall be
in writing and shall be deemed to have been duly given if (i) delivered by hand
and receipted for by the party to whom said notice or other communication shall
have been directed or if (ii) mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:
(i) If to Indemnitee, to
or to such other address as may be furnished to Leggett by Indemnitee:
(ii) If to Leggett, to
Leggett & Platt, Incorporated
No. 1 Leggett Road
Carthage, MO 64836
or to such other address as may have been furnished to Indemnitee by
Leggett.
14. GOVERNING LAW
This Agreement shall be construed, enforced and governed by Missouri law.
15. HEIRS, SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be enforceable by the
Indemnitee's personal or legal representatives, executors, administrators,
heirs, devisees and legatees.
This Agreement is binding on the successors and assigns of Leggett.
Leggett will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Leggett to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that Leggett would be required to
perform it if no such succession had taken place (the assumption shall be by
agreement in form and substance reasonably satisfactory to Indemnitee).
16 MISCELLANEOUS
This Agreement does not create any right in Indemnitee to employment with
Leggett or its affiliates.
Leggett expressly confirms and agrees that is has entered into this
Agreement and assumed the obligations imposed on Leggett hereby in order to
induce Indemnitee to continue as a director and/or officer of Leggett and
acknowledges that Indemnitee is relying upon this Agreement in continuing in
such capacity or capacities.
All references herein in the masculine gender shall, when appropriate,
refer to the feminine gender.
In the event of any ambiguity, vagueness or other matter involving the
interpretation or meaning of this Agreement, this Agreement shall be liberally
construed so as to provide the Indemnitee the full benefits sets out herein.
5
Entered into on the day and year first above written.
ATTEST: LEGGETT & PLATT, INCORPORATED
By_____________________________ By____________________________________
______________________________________
Indemnitee
6
EXHIBIT 10.14
-------------
STOCK AWARD AGREEMENT
---------------------
FELIX E. WRIGHT
Leggett & Platt, Incorporated (the "Company") and Felix E. Wright (the
"Participant") agree as of August 1, 1995 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to Participant
upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning August 4, 1995 and
ending December 22, 1995.
Each bi-weekly Basic Stock Award and Incentive Bonus will be in whole
(not fractional) Shares having a fair market value on the date the Award is made
that is as close as possible to $3,636.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1996 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1995 or has
terminated his employment before December 31, 1995 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1995
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
-1-
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock
Awards received by Participant (with such fair market value being determined as
of the date that each Basic Stock Award is made).
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
-------------------------------------------------------
______ Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld
------ from all cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "Participant's Investments." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during the
period of this Agreement shall not be less than 2% nor more than 10% of
Participant's gross cash compensation for the calendar year 1995. All cash
transmitted will be invested by the Company in the same manner as cash dividends
from Company Shares and thereupon shall constitute and remain a portion of
Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock
-2-
shall normally be issued in the name of the Participant only. However, if the
Participant so requests, certificates will be issued (i) in the name of the
Participant and the Participant's spouse as tenants by the entirety, or (ii) in
the name of the Participant and any other person designated by the Participant
as joint tenants with right of survivorship. Any such issuance will be in
accordance with such guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
-3-
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employment by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within sixty (60) days following the Participant's termination of employment.
The above option applies only to a Participant (a) who is under age 60 when his
employment terminates, (b) who has been employed by an Employer for less than 5
continuous years when his employment terminates and (c) whose employment is
terminated for a reason other than permanent and total disability or death. For
purposes of determining a Participant's length of employment, employment with an
Employer prior to the time that it became an Employer shall be disregarded.
Without, in any way, limiting the provisions of Section 8, in order to
facilitate the Company's exercise of the foregoing option, the Participant
shall, as a condition to receiving an Award, execute such stock and other
assignments and other
-4-
documents of transfer as the Committee shall request at any time.
Notwithstanding the foregoing, the decision as to whether to exercise the option
granted by this Section 13 shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ Felix E. Wright By: /s/ R.A. Jefferies, Jr.
- ------------------------- ------------------------------
Participant Senior Vice President
-5-
EXHIBIT 10.15
-------------
STOCK AWARD AGREEMENT
---------------------
DUANE W. POTTER
Leggett & Platt, Incorporated (the "Company") and Duane W. Potter (the
"Participant") agree as of August 1, 1995 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in the
sole discretion of the Committee which administers the Plan. No consideration
whatsoever has been required of Participant as a condition to receiving or
enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to Participant
upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning August 4, 1995 and
ending December 22, 1995.
Each bi-weekly Basic Stock Award and Incentive Bonus will be in whole
(not fractional) Shares having a fair market value on the date the Award is made
that is as close as possible to $1,886.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1996 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1995 or has
terminated his employment before December 31, 1995 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1995
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
-1-
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock
Awards received by Participant (with such fair market value being determined as
of the date that each Basic Stock Award is made).
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
-------------------------------------------------------
_______ Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
___X___ Participant elects not to have income taxes withheld
from all cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "Participant's Investments." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during the
period of this Agreement shall not be less than 2% nor more than 10% of
Participant's gross cash compensation for the calendar year 1995. All cash
transmitted will be invested by the Company in the same manner as cash dividends
from Company Shares and thereupon shall constitute and remain a portion of
Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock
-2-
shall normally be issued in the name of the Participant only. However, if the
Participant so requests, certificates will be issued (i) in the name of the
Participant and the Participant's spouse as tenants by the entirety, or (ii) in
the name of the Participant and any other person designated by the Participant
as joint tenants with right of survivorship. Any such issuance will be in
accordance with such guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
-3-
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employment by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within sixty (60) days following the Participant's termination of employment.
The above option applies only to a Participant (a) who is under age 60 when his
employment terminates, (b) who has been employed by an Employer for less than 5
continuous years when his employment terminates and (c) whose employment is
terminated for a reason other than permanent and total disability or death. For
purposes of determining a Participant's length of employment, employment with an
Employer prior to the time that it became an Employer shall be disregarded.
Without, in any way, limiting the provisions of Section 8, in order to
facilitate the Company's exercise of the foregoing option, the Participant
shall, as a condition to receiving an Award, execute such stock and other
assignments and other
-4-
documents of transfer as the Committee shall request at any time.
Notwithstanding the foregoing, the decision as to whether to exercise the option
granted by this Section 13 shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ Duane W. Potter By: /s/ R. A. Jefferies, Jr.
- ---------------------------------- --------------------------------------
Participant Senior Vice President
-5-
EXHIBIT 10.16
-------------
STOCK AWARD AGREEMENT
---------------------
DAVID S. HAFFNER
Leggett & Platt, Incorporated (the "Company") and David S. Haffner (the
"Participant") agree as of August 1, 1995 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to Participant
upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning August 4, 1995 and
ending December 22, 1995.
Each bi-weekly Basic Stock Award and Incentive Bonus will be in whole
(not fractional) Shares having a fair market value on the date the Award is made
that is as close as possible to $1,297.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1996 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1995 or has
terminated his employment before December 31, 1995 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1995
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
-1-
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock
Awards received by Participant (with such fair market value being determined as
of the date that each Basic Stock Award is made).
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
-------------------------------------------------------
--------- Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld
--------- from all cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus
any interest thereon) in such debt or equity issues, mutual funds, annuity
contracts and/or other investments as shall be agreeable to Participant and the
Committee. Such investments together with all proceeds thereof and increments
thereto are collectively called "Participant's Investments." In no event will
Participant's Investments include the Company's Common Stock or the Company's
preferred stock or any debt instruments convertible into such Common Stock or
preferred stock.
Participant in his sole and absolute discretion and without being
under any obligation to do so, may transmit cash to the Company (bi-weekly by
payroll deduction or in lump sum amounts). Any such cash transmitted during the
period of this Agreement shall not be less than 2% nor more than 10% of
Participant's gross cash compensation for the calendar year 1995. All cash
transmitted will be invested by the Company in the same manner as cash dividends
from Company Shares and thereupon shall constitute and remain a portion of
Participant's Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock shall normally be issued in the name of the Participant only. However, if
the Participant so
-2-
requests, certificates will be issued (i) in the name of the Participant and the
Participant's spouse as tenants by the entirety, or (ii) in the name of the
Participant and any other person designated by the Participant as joint tenants
with right of survivorship. Any such issuance will be in accordance with such
guidelines as the Committee may promulgate.
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
-3-
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employment by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within sixty (60) days following the Participant's termination of employment.
The above option applies only to a Participant (a) who is under age 60 when his
employment terminates, (b) who has been employed by an Employer for less than 5
continuous years when his employment terminates and (c) whose employment is
terminated for a reason other than permanent and total disability or death. For
purposes of determining a Participant's length of employment, employment with an
Employer prior to the time that it became an Employer shall be disregarded.
Without, in any way, limiting the provisions of Section 8, in order to
facilitate the Company's exercise of the foregoing option, the Participant
shall, as a condition to receiving an Award, execute such stock and other
assignments and other
-4-
documents of transfer as the Committee shall request at any time.
Notwithstanding the foregoing, the decision as to whether to exercise the option
granted by this Section 13 shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ David S. Haffner By: /s/ R.A. Jefferies, Jr.
- ----------------------------------- --------------------------------------
Participant Senior Vice President
-5-
EXHIBIT 10.17
-------------
STOCK AWARD AGREEMENT
Leggett & Platt, Incorporated (the "Company") and Harry M. Cornell, Jr.
(the "Participant") agree as of December 28, 1995 as follows:
1. 1989 FLEXIBLE STOCK PLAN. The Basic Stock Award and the Additional
Stock Award provided for below (individually "Stock Award" or "Award" and
collectively "Stock Awards" or "Awards") constitute "Other Stock Based Awards"
under the Company's 1989 Flexible Stock Plan (the "Plan") and are granted to
Participant under Article XVIII of the Plan.
All Stock Awards provided for in this Agreement have been granted in
the sole discretion of the Committee which administers the Plan. No
consideration whatsoever has been required of Participant as a condition to
receiving or enjoying Awards.
This Agreement and all shares of Common Stock of the Company
("Shares") granted to or acquired by Participant under or pursuant to this
Agreement is subject to the Plan. A copy of the Plan is available to
Participant upon request.
Capitalized terms used in this Agreement, if not defined herein, shall
have the meanings given to such terms by the Plan.
2. BASIC STOCK AWARD. The Participant is granted bi-weekly awards of
Common Stock of the Company, such awards to be made beginning January 5, 1996
and ending December 20, 1996.
On or before March 31, 1996, the Committee will grant a one-time Basic
Stock Award to Participant providing Participant remains a full-time executive
of an Employer on that date.
Each bi-weekly Basic Stock Award and the one-time Basic Stock Award
will be in whole (not fractional) Shares having a fair market value on the date
the Award is made that is as close as possible to 7.59% of each installment of
Participant's pay, including Participant's incentive bonus and any amounts
deferred by Participant. The parties to this Agreement agree that the
immediately preceding percentages may be adjusted upward or downward as
necessary by the Company to reflect any changes in federal, state or local tax
rates.
The awards made under this Section are individually and collectively
called the "Basic Stock Award."
3. ADDITIONAL STOCK AWARD. On or before March 1, 1997 the Committee will
grant a one-time "Additional Stock Award" to Participant if (i) Participant
remains a full-time executive of an Employer as of December 31, 1996 or has
terminated his employment before December 31, 1996 because of permanent and
total disability, retirement or death and (ii) the Company has met the 1996
earnings objectives as determined by the Committee for the awarding of an
Additional Stock Award. The Additional Stock Award will be in whole (not
fractional) Shares having a fair market value on the date the Award is made that
is as close as possible to the product of "X" and "Y" where:
-1-
(a) "X" equals .787; and
(b) "Y" equals the aggregate fair market value of all Basic Stock Awards
received by Participant during calendar year 1996. The fair market value of
each Basic Stock Award shall be determined as of the date such Award is made.
4. DIVIDENDS ON COMPANY SHARES; PARTICIPANT'S INVESTMENTS.
------------------------------------------------------
------- Participant elects to have income taxes withheld from all
cash dividends on Company Shares.
X Participant elects not to have income taxes withheld from
------- all cash dividends on Company Shares.
(Check one of two above.)
Participant authorizes the Company to be paid and to receive all cash
dividends on Company Shares.
The Company shall invest all cash dividends from Company Shares (plus any
interest thereon) in such debt or equity issues, mutual funds, annuity contracts
and/or other investments as shall be agreeable to Participant and the Committee.
Such investments together with all proceeds thereof and increments thereto are
collectively called "Participant's Investments." In no event will Participant's
Investments include the Company's Common Stock or the Company's preferred stock
or any debt instruments convertible into such Common Stock or preferred stock.
Participant in his sole and absolute discretion and without being under any
obligation to do so, may transmit cash to the Company (bi-weekly by payroll
deduction or in lump sum amounts). Any such cash transmitted during the period
of this Agreement shall not be less than 1% nor more than 10% of Participant's
gross cash compensation for the calendar year 1995. All cash transmitted will
be invested by the Company in the same manner as cash dividends from Company
Shares and thereupon shall constitute and remain a portion of Participant's
Investments.
The substantive provisions of Sections 5.1, 5.2, 5.3, 6 and 10 of this
Agreement dealing with Common Stock and certificates therefor shall apply with
like force to Participant's Investments and certificates or other evidences of
Participant's Investments.
5. OTHER CONDITIONS OF STOCK AWARD. The grant of each Stock Award shall
be subject to the following additional terms and conditions:
5.1 NAMES ON CERTIFICATES FOR COMMON STOCK. Certificates for all Common
Stock shall normally be issued in the name of the Participant only. However, if
the Participant so requests, certificates will be issued (i) in the name of the
Participant and the Participant's spouse as tenants by the entirety, or (ii) in
the name of the Participant and any other person designated by the Participant
as joint tenants with right of survivorship. Any such issuance will be in
accordance with such guidelines as the Committee may promulgate.
-2-
With the Committee's consent, which may be given or withheld in the
Committee's sole and absolute discretion, certificates for Common Stock may be
issued in the name of a person other than the Participant. Any such issuance
shall be on such terms and conditions as the Committee may deem appropriate.
Participant may also transfer Common Stock to a revocable trust
providing the terms of such trust meets the requirements set forth in Section 21
of the Company's Executive Stock Purchase Program.
Irrespective of the names (other than the Participant's) appearing on
any certificates for Common Stock, such certificates shall remain subject to all
of the terms and conditions of this Agreement.
5.2 STOCK NOT TRANSFERRABLE. Common Stock may not be transferred, pledged
or otherwise disposed of by the Participant or any other holder thereof until it
is no longer subject to repurchase pursuant to Section 13 and until the earlier
of (i) the Participant's death, total and permanent disability, retirement, or
other termination of employment or (ii) such time as the Committee shall
determine.
In addition, Participant may not sell or otherwise dispose of any
shares of Common Stock awarded under this Agreement unless the shares have been
held for at least six months after the date of the Award.
5.3 POSSESSION OF STOCK CERTIFICATES; LEGENDS. Until Common Stock is no
longer nontransferable, certificates for such Common Stock may be held by the
Company or such other person or entity as the Committee shall select and may be
marked with such legend as the Committee shall determine.
5.4 SUBSTITUTION OF CERTIFICATES. A Participant shall be permitted from
time to time to substitute certificates for Common Stock already owned by the
Participant and not subject to this Agreement for a like number of Common Stock
certificates which have been held for at least six months from the date that
they were awarded. Participant shall also be permitted from time to time to
substitute property already owned by the Participant and not subject to this
Agreement for Participant's Investments having similar fair market value. Any
and all such substitutions shall be in accordance with such guidelines as the
Committee may promulgate.
6. TRUST OR CUSTODIAL ACCOUNT. The Committee shall have the right at any
time to establish a trust, custodial account or other arrangement to hold
certificates for Common Stock which is nontransferable upon such terms as it
deems appropriate and which are not in conflict with the Plan or this Agreement.
7. ADJUSTMENT. In the event of any change in the Common Stock of the
Company described in Section 3.3 of the Plan, the Committee shall have the right
to make such amendments to this Agreement as it shall deem necessary to carry
out the purposes of this Agreement.
8. AUTHORITY AND FURTHER STEPS. In addition to this Agreement, the
Participant shall execute such additional documents and take all steps as the
Committee shall request to effectuate the provisions of this Agreement.
-3-
9. TERMINATION OF EMPLOYMENT. If Participant's employment terminates for
any reason, no further installment of any Basic Stock Award which is payable in
installments shall be made. If the Participant's employment terminates for any
reason prior to December 31 of any year, any Additional Stock Award for that
year which has not been paid will be forfeited unless (a) such termination (i)
was because of permanent and total disability or death or (ii) occurred on or
after the Participant attained 60 years of age or attained 55 years of age and
had been employed by an Employer for at least 5 continuous years or (b) the
Committee provides otherwise.
10. ASSIGNMENT. Unless allowed by the Committee, no Award shall be
assignable by the Participant. Subject to the foregoing, this Agreement shall
be binding upon and inure to the benefit of the Company, the Participant and
their respective successors, assigns, heirs and personal representatives.
11. FUTURE GRANTS. Nothing contained in this Agreement or other document
shall require the grant to Participant of additional Awards or any other Benefit
under the Plan or prohibit any other Benefit which is granted from being a
different Benefit or from being granted on different and/or additional terms and
conditions than those in this Agreement.
12. NO EMPLOYMENT CONTRACT. This Agreement shall not confer upon the
Participant any right of continued employment nor shall it interfere in any way
with the right of the Employer to terminate the Participant's employment at any
time (subject to any employment contract that might exist between Participant
and the Employer).
13. OPTION TO REPURCHASE. The Company shall have an option to buy all of
a Participant's Common Stock obtained directly through a Stock Award. The
option price shall be $1, and the option must be exercised by the Committee
within 60 days following the Participant's termination of employment. The above
option applies only to a Participant (a) who is under age 60 when his employment
terminates, (b) who has been employed by an Employer for less than 5 continuous
years when his employment terminates and (c) whose employment is terminated for
a reason other than permanent and total disability or death. For purposes of
determining a Participant's length of employment, employment with an Employer
prior to the time that it became an Employer shall be disregarded. Without, in
any way, limiting the provisions of Section 8, in order to facilitate the
Company's exercise of the foregoing option, the Participant shall, as a
condition to receiving an Award, execute such stock and other assignments and
other documents of transfer as the Committee shall request at any time.
Notwithstanding the foregoing, the decision as to whether to exercise the option
granted by this Section 13 shall be made solely by the Committee.
LEGGETT & PLATT, INCORPORATED
/s/ Harry M. Cornell, Jr. By: /s R. A. Jefferies, Jr.
- ------------------------------ ------------------------------
Participant Senior Vice President
-4-
EXHIBIT 10.18
-------------
DEFERRED COMPENSATION PROGRAM
The Company has implemented a program through which certain managers,
including the Company's executive officers, may elect to forego future cash
compensation such as salary and bonus. When an election to forego future cash
compensation is made the manager receives from the Company either a market rate-
based interest bearing obligation of the Company to pay cash to the manager in
the future or an option to purchase shares of the Company's common stock, $.01
par value (the "Common Stock"). Stock options are granted under the Company's
1989 Flexible Stock Plan, as amended. The formula used to determine the number
of shares subject to the options is (i) the cash compensation foregone divided
by (ii) the current market value of one share of Common Stock. This quotient is
then multiplied by 1.176.
The option price under the stock options is $.01 per share. The options
have a term of fifteen years from the grant date and become exercisable at the
later of (i) six months after grant or (ii) when they would otherwise be
entitled to receive the cash compensation. The options are not transferable.
EXHIBIT 11
----------
LEGGETT & PLATT, INCORPORATED AND SUBSIDIARIES
COMPUTATIONS OF EARNINGS PER SHARE
(Amounts in millions, except per share data)
Year Ended December 31 1995 1994 1993
-------- -------- --------
EARNINGS PER SHARE
Weighted average number of common
shares outstanding............... 83.7 82.0 80.2
Dilution from outstanding stock
options - computed using the
"treasury stock" method......... 1.3 1.1 1.4
Dilution from shares issuable
under contingent earnout
agreement....................... - - .7
------ ------ -----
Weighted average number of common
shares outstanding as adjusted.. 85.0 83.1 82.3
====== ====== =====
Net Earnings....................... $134.9 $115.4 $85.9
====== ====== =====
Earnings Per Share................. $ 1.59 $ 1.39 $1.04
====== ====== =====
Previously reported share and per share amounts have been restated to reflect a
September 15, 1995 two-for-one stock split.
EXHIBIT 21
SCHEDULE OF SUBSIDIARIES OF REGISTRANT
Name of State of Percentage of
Organization Incorporation Voting Interest
- ------------ -------------- ---------------
AAA WIRE PRODUCTS, INC. Texas 100%
BERKSHIRE FURNITURE CO., INC. Delaware 100%
BOIS AISE DE ROBERVAL INC. Canada 100%
BOIS J.L.P. INC. Canada 100%
COLLIER-KEYWORTH, INC. North Carolina 100%
CREST-FOAM CORP. New Jersey 100%
CREST-HOOD FOAM COMPANY, INC. Delaware 100%
DRESHER, INC. Delaware 100%
GOR-DON METAL PRODUCTS & SERVICES, INC. Canada 100%
GRIBETZ INTERNATIONAL, INC. Delaware 100%
GRIBETZ THREADS, INC. Florida 100%
HANES COMPANIES FOUNDATION North Carolina 100%
HANES COMPANIES, INC. North Carolina 100%
INTERNATIONAL STORAGE SYSTEMS
CORPORATION Florida 100%
L AND P MEXICO, S.A. DE C.V. Mexico 100%
LEGGETT AND PLATT INTERNATIONAL
CORPORATION Missouri 100%
LEGGETT & PLATT CANADA LTD. Canada 100%
LEGGETT & PLATT FOREIGN SALES
CORPORATION West Indies 100%
LEGGETT & PLATT INTERNATIONAL
DEVELOPMENT CO. Delaware 100%
LEGGETT & PLATT INTERNATIONAL SERVICE
CORPORATION Delaware 100%
LEGGETT & PLATT KOREA, LTD. Korea 100%
LEGGETT & PLATT U.K. LIMITED United Kingdom 100%
LEGGETT WIRE COMPANY Delaware 100%
1
Name of State of Percentage of
Organization Incorporation Voting Interest
- ------------ ------------- ---------------
L&P ACQUISITION COMPANY - 7 Delaware 100%
L&P ACQUISITION COMPANY - 8 Delaware 100%
L&P ACQUISITION COMPANY - 10 Delaware 100%
L&P ACQUISITION COMPANY - 12 Delaware 100%
L&P ACQUISITION COMPANY - 14 Delaware 100%
L&P ACQUISITION COMPANY - 15 Delaware 100%
L&P AUTOMOTIVE EUROPE GMBH Germany 100%
L&P INTERNATIONAL HOLDINGS COMPANY Delaware 100%
L&P NETHERLANDS HOLDINGS B.V. Netherlands 100%
L&P PROPERTY MANAGEMENT COMPANY Illinois 100%
L&P TRANSPORTATION CO. Delaware 100%
L&P WESTERN SPRING CO. Delaware 100%
MASTERBLEND, INC. Mississippi 100%
MATREX FURNITURE COMPONENTS, INC. North Carolina 100%
THE MISSISSIPPI SPRING CO., INC. Mississippi 100%
MG LOAN COMPANY Delaware 100%
M&M CO. K.G. Germany 100%
M&M GMBH Germany 100%
MULTILASTIC LIMITED United Kingdom 100%
NORTHEASTERN COMPONENTS
(INTERNATIONAL) LTD. England 100%
NORTHFIELD METAL PRODUCTS (1994) LTD Canada 100%
NO-SAG SPRING COMPANY, LIMITED Canada 100%
PULLMAFLEX A.B. Sweden 100%
PULLMAFLEX BENELUX N.V. Belgium 100%
PULLMAFLEX ESPANOLA S.A. Spain 100%
PULLMAFLEX INTERNATIONAL B.V. Holland 100%
2
Name of State of Percentage of
Organization Incorporation Voting Interest
- ------------ ------------- ---------------
PULLMAFLEX INTERNATIONAL LIMITED England 100%
PULLMAFLEX JAPAN KK Japan 100%
PULLMAFLEX U.K. LIMITED England 100%
SOUTHEASTERN MANUFACTURING CO., INC. Florida 100%
STEINER-LIFF TEXTILE PRODUCTS, CO. Delaware 100%
STYLELANDER METAL STAMPING, INC. Mississippi 100%
TALBOT INDUSTRIES, INC. Missouri 100%
WBSCO, INC. New Mexico 100%
WEBER PLASTICS CO. LTD. Canada 100%
YOUNG SPRING & WIRE COMPANY Delaware 100%
YOUNGFLEX A.G. Switzerland 100%
3
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 8, 1996 appearing on page 29 of Leggett & Platt, Incorporated's Annual
Report on Form 10-K for the year ended December 31, 1995.
1. Post-Effective Amendment No. 1 to Form S-8, Registration No. 33-15441,
filed August 29, 1989.
2. Form S-8, Registration No. 33-44224, filed November 27, 1991.
3. Form S-8, Registration No. 33-45334, filed January 27, 1992.
4. Form S-8, Registration No. 33-45335, filed January 27, 1992.
5. Form S-8, Registration No. 33-45336, filed January 27, 1992.
6. Form S-8, Registration No. 33-67910, filed August 26, 1993.
7. Form S-8, Registration No. 33-54339, filed June 28, 1994.
8. Post-Effective Amendment No. 1 to Form S-3, Registration No. 33-55413,
filed September 23, 1994.
9. Form S-3, Registration No. 33-55725, filed September 30, 1994.
10. Form S-3, Registration No. 33-56111, filed October 25, 1994.
11. Form S-3, Registration No. 33-56919, filed December 16, 1994.
12. Form S-3, Registration No. 33-58847, filed April 26, 1995.
13. Form S-3, Registration No. 33-60623, filed June 27, 1995.
14. Form S-3, Registration No. 33-60627, filed June 27, 1995.
15. Form S-3, Registration No. 33-62899, filed September 25, 1995.
/s/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE LLP
St. Louis, Missouri
March 25, 1996
EXHIBIT 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors of
LEGGETT & PLATT, INCORPORATED, a Missouri corporation (the "Corporation"), does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr., and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to sign in the name of and on behalf of the
undersigned directors of the Corporation and to file with the Securities &
Exchange Commission ("SEC") the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 and any other documents or further
Amendments to said Annual Report, and to take such other action, all as said
attorneys-in-fact, or any one of them, deem necessary or advisable to the end
that such Annual Report or amendments thereto in respect of same, shall comply
with the Securities Exchange Act of 1934, as amended, and the applicable rules
of the SEC thereunder; and does hereby ratify and confirm all that said
attorneys-in-fact, and each of them, may do by virtue hereof.
Additionally, each of the undersigned directors of the Corporation does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr. and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to, from time to time, sign in the name of
and on behalf of the undersigned directors of the Corporation and to file with
the SEC Registration Statements with respect to the Corporation's common stock,
$.01 par value, and the Preferred Stock Purchase Rights attached to and trading
with such Common Stock to be sold in secondary offerings by shareholders of the
Company and any other documents or further Amendments or Post-Effective
Amendments to such Registration Statements and to take such other action, all as
said attorneys-in-fact, or any one of them, deem necessary or advisable and does
hereby ratify and confirm all that said attorneys-in-fact, and each of them, may
do by virtue hereof.
Additionally, each of the undersigned directors of the Corporation does
hereby nominate, constitute and appoint Harry M. Cornell, Jr., Michael A.
Glauber, Robert A. Jefferies, Jr. and Ernest C. Jett, or any one of them, his
true and lawful attorneys-in-fact, to, from time to time, sign in the name of
and on behalf of the undersigned directors of the Corporation and file with the
SEC Registration Statements with respect to securities (including the
Corporation's common stock, $.01 par value, and the Preferred Stock Purchase
Rights attached to and trading with such Common Stock) to be sold pursuant to
the Corporation's Restated Employee Stock Purchase/Stock Bonus Plan, 1989
Discount Stock Plan, 1989 Flexible Stock Plan, Directors Stock Option Plan and
any other employee benefit plans of the Corporation adopted or approved during
calendar year 1996 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 ____ day of March, 1996.
/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/ Robert Ted Enloe, III /s/ Richard L. Pearsall
- ------------------------------------- -------------------------------------
Robert Ted Enloe, III Richard L. Pearsall
/s/ Richard T. Fisher /s/ Maurice E. Purnell, Jr.
- ------------------------------------- -------------------------------------
Richard T. Fisher Maurice E. Purnell, Jr.
/s/ Frank E. Ford, Jr. /s/ Felix E. Wright
- ------------------------------------- -------------------------------------
Frank E. Ford, Jr. Felix E. Wright
/s/ David S. Haffner
- -------------------------------------
David S. Haffner
2
5
1,000
12-MOS
DEC-31-1995
DEC-31-1995
6,700
0
255,500
7,500
276,800
571,900
808,400
356,600
1,218,300
226,800
191,900
800
0
0
733,300
1,218,300
2,059,300
2,059,300
1,568,300
1,568,300
0
0
11,500
220,700
85,800
134,900
0
0
0
134,900
1.59
0
