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LEG > SEC Filings for LEG > Form 8-K on 31-Mar-2014All Recent SEC Filings

Show all filings for LEGGETT & PLATT INC

Form 8-K for LEGGETT & PLATT INC


31-Mar-2014

Change in Directors or Principal Officers, Financial Statements and Exhibits


Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

2014 Award Formula for the Company's 2014 Key Officers Incentive Plan. On March 26, 2014, the Compensation Committee of the Company's Board of Directors (the "Committee") adopted the 2014 Award Formula (the "2014 Award Formula") for the Company's 2014 Key Officers Incentive Plan (the "Plan"). The Plan was previously adopted by the Committee at its meeting on February 26, 2014. The Plan was filed March 25, 2014 as Appendix A to the Company's Proxy Statement. The Plan, and indirectly the 2014 Award Formula, is subject to shareholder approval at the annual meeting of shareholders. If approved, the Plan and the 2014 Award Formula will become effective as of January 1, 2014. If not approved, no awards will be paid pursuant to the Plan or the 2014 Award Formula.

The 2014 Award Formula is applicable to the Company's executive officers, including the named executive officers listed below. Under the 2014 Award Formula, an executive officer would be eligible to receive a cash award calculated by multiplying his annual salary at the end of the year by a percentage set by the Committee (the "Target Percentage"), then applying the award formula. Corporate Participants and Profit Center Participants have separate award calculations based on factors defined in the 2014 Award Formula as follows:

                                                                      Relative
    Participant Type                  Performance Objectives           Weight
    Corporate Participants       Return on Capital Employed (ROCE)           60 %
                                 Cash Flow                                   20 %
                                 Individual Performance Goals*               20 %
    Profit Center Participants   Return on Capital Employed (ROCE)           60 %
                                 Free Cash Flow (FCF)                        20 %
                                 Individual Performance Goals*               20 %

* These awards are established outside the Plan.

Corporate Participants. Awards for Corporate Participants are determined by the Company's aggregate 2014 financial results. No awards are paid for ROCE achievement below 30% and Cash Flow below $200 million. The maximum payout percentage for ROCE and Cash Flow achievement is capped at 150%. David S. Haffner (Board Chair and Chief Executive Officer), Karl G. Glassman (President and Chief Operating Officer) and Matthew C. Flanigan (Executive Vice President and Chief Financial Officer) are Corporate Participants. Below are the 2014 corporate targets and payout schedule. Payouts will be interpolated for achievement levels falling between those in the schedule. Financial results from acquisitions are excluded from the calculations in the year of acquisition.

2014

Corporate Targets and Payout Schedule

                  ROCE                                             Cash Flow
        Achievement          Payout                         Achievement            Payout
    Less Than     30.0%            0 %                  Less Than  $  200.0 M            0 %
                  30.0%           50 %    Threshold                $  200.0 M           50 %
                  32.5%           75 %                             $  237.5 M           75 %
                  35.0%          100 %     Target                  $  275.0 M          100 %
                  37.5%          125 %                             $  312.5 M          125 %
                  40.0%          150 %     Maximum                 $  350.0 M          150 %

Profit Center Participants. For Profit Center Participants, no awards are paid for achievement below 80% of the ROCE and FCF targets for the applicable profit centers under the executive's management. The ROCE and FCF payouts are each capped at 150%. Joseph D. Downes, Jr. (Senior Vice President, President - Industrial Materials) and Jack D. Crusa (Senior Vice President, President - Specialized Products) are Profit Center Participants. Below are the 2014 profit center payout schedule and targets for Mr. Downes and Mr. Crusa. Payouts will be interpolated for achievement levels falling between those in the schedule. Financial results for each profit center may include a critical compliance adjustment, ranging from a potential 5% increase for exceptional safety performance to a 20% deduction for critical compliance failures. Financial results from acquisitions are excluded from the calculations in the year of acquisition.


2014

Profit Center Payout Schedule

                 ROCE / FCF Achievement                           Payout
                 Less Than         80%                                  0 %
                                   80%           Threshold             60 %
                                   90%                                 80 %
                                  100%            Target              100 %
                                  110%                                120 %
                                  120%                                140 %
                                  125%            Maximum             150 %

                           2014 Profit Center Targets



            Segment President                ROCE Target       FCF Target
            Industrial Materials (Downes)            31.9 %   $      49.1M
            Specialized Products (Crusa)             39.6 %   $      80.7M

Individual Performance Goals. An executive's cash award under the 2014 Award Formula is based, in part, on individual performance goals established outside the 2014 Key Officers Incentive Plan (20% relative weight). The goals for our named executive officers are:

David S. Haffner: Emerging markets expansion, business unit portfolio management;

Karl G. Glassman: Business unit portfolio management, margin enhancement, revenue growth, internal audit compliance, leadership development;

Matthew C. Flanigan: Working capital management, corporate allocations forecasting, information technology initiatives, leadership development;

Joseph D. Downes, Jr.: Divestiture of targeted business, growth and profitability of targeted businesses, working capital management; and

Jack D. Crusa: Expansion and reorganization of targeted businesses, succession planning, purchasing initiatives.

The achievement of the individual performance goals is measured by the following schedule.

                  Individual Performance Goals Payout Schedule

                                  (1-5 scale)



                  Achievement                         Payout
                  1 - Did not achieve goal                    0 %
                  2 - Partially achieved goal                50 %
                  3 - Substantially achieved goal            75 %
                  4 - Fully achieved goal                   100 %


5 - Significantly exceeded goal up to 150 %

The foregoing is only a brief description of the 2014 Award Formula and is qualified in its entirety by such formula which is attached and incorporated by reference as Exhibit 10.1. The definitions of ROCE, Cash Flow and FCF and example calculations are included in the attached 2014 Award Formula.

Base Salaries and Target Percentages set for Named Executive Officers. On March 26, 2014, the Committee increased the annual base salaries and set the Target Percentages for each of the named executive officers, which are shown in the table below. Also attached and incorporated by reference as Exhibit 10.2 is the Company's Summary Sheet for Executive Cash Compensation.

--------------------------------------------------------------------------------
                                         2013 Base         2014 Base         2013 Target         2014 Target
Named Executive Officers                 Salaries          Salaries          Percentages         Percentages
David S. Haffner, Board Chair and
Chief Executive Officer                 $ 1,055,000       $ 1,090,000                 115 %               115 %
Karl G. Glassman, President and
Chief Operating Officer                 $   785,000       $   810,000                  90 %                90 %
Matthew C. Flanigan, EVP and Chief
Financial Officer                       $   475,000       $   490,000                  80 %                80 %
Joseph D. Downes, Jr., SVP,
President - Industrial Materials        $   338,000       $   347,300                  50 %                50 %
Jack D. Crusa, SVP, President -
Specialized Products                    $   332,000       $   342,000                  50 %                50 %



Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.       Description

10.1*             2014 Award Formula under the Company's 2014 Key Officers
                  Incentive Plan.

10.2*             Summary Sheet for Executive Cash Compensation.

10.3              The Company's 2014 Key Officers Incentive Plan, effective as of
                  January 1, 2014, filed March 25, 2014 as Appendix A to the
                  Company's Proxy Statement, is incorporated by reference. (SEC
                  File No. 001-07845)

* Filed with this Form 8-K.


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