Mumbai Stock Exchange：Leggett & Platt, Incorporated 2022 Proxy Statement
Compensation Discussion & Analysis
The ESU Program is a non-qualified retirement
program that allows executives to make pre-tax deferrals of up to 10% of their compensation into diversified investments. We match 50% of the executive’s contribution in Company stock units, purchased at
a 15% discount, which may increase up to a 100% match if the Company meets annual ROCE targets linked to the KOIP. The Company makes an additional 17.65% contribution to the diversified investments acquired with executive contributionsMumbai Stock Exchange. Matching
contributions vest once employees have participated in the ESU Program for five years. Leggett stock units held in the ESU Program accrue dividends, which are used to acquire additional stock units at a 15% discount. At distribution, the balance of
the diversified investments is paid in cash. Although the Company intends to settle the stock units in shares of the Company’s common stock, it reserves the right to distribute the balance in cash if sufficient shares are not available under
the Flexible Stock Plan.
Deferred Compensation Program. The Deferred Compensation Program allows key managers to defer up to 100% of
salary, incentive awards and other cash compensation in exchange for any combination of the following:
Stock units with dividend equivalents, acquired at a 20% discount to the fair market value of our common stock on
the dates the compensation or dividends otherwise would have been paid.Chennai Stock
At-market stock options with the underlying shares of common stock having
an initial market value five times the amount of compensation forgone, with an exercise price equal to the closing market price of our common stock on the grant date (December 15 of the year in which the deferral election is made).
Cash deferrals accruing interest at a rate intended to be slightly higher than otherwise available for comparableJaipur Wealth Management
investments.
Participants who elect a cash or stock unit deferral can receive distributions in a lump sum or in annual installments.
Distribution payouts must begin no more than 10 years from the effective date of the deferral and all amounts subject to the deferral must be distributed within 10 years of the first installment. Although the Company intends to settle the stock
units in shares of the Company’s common stock, it reserves the right to distribute the balance in cash if sufficient shares are not available under the Flexible Stock Plan. Participants who elect
at-market stock options, which have a 10-year term, may exercise them approximately 15 months after the start of the year in which the deferral was made.
Retirement K and Excess Plan. The Company’s defined benefit Retirement Plan was frozen in 2006 (see description on page 42).
Employees who had previously participated in the Retirement Plan were offered a replacement benefit: a tax-qualified defined contribution Section 401(k) Plan (Retirement K). The Retirement K includes an age-weighted Company matching contribution designed to replicate the benefits lost by the Retirement Plan freeze. Employees who did not participate in the Retirement Plan when it was frozen in 2006 are eligible to
contribute to the Company’s 401(k) plan with an alternate matching contribution schedule.
Many of our officers cannot fully participate in the
Retirement K due to limitations imposed by the Internal Revenue Code or the Employee Retirement Income Security Act, or due to their participation in the Deferred Compensation Program. Consequently, we maintain a
non-qualified Retirement K Excess Plan which permits affected executives to receive the full matching benefit they would otherwise have been entitled to under the Retirement K. Amounts earned in the Retirement
K Excess Plan are paid out in cash no later than March 15 of the following year and are eligible for the Deferred Compensation Program.
Business Unit Profit Sharing Program. Prior to Mr. Henderson’s promotion to Executive Vice President and President of the Specialized
and FF&T Segments at the start of 2020, he received awards under the Company’s Business Unit Profit Sharing (BUPS) program. The BUPS is a long-term, performance-based incentive program in which participants earn a cash bonus based on a
percentage of the incremental EBIT produced by the business unit(s) they manage, subject to an individual payout cap and an aggregate payout cap for all participants in the business units. For Mr. Henderson’s 2019 BUPS award (which vested
on December 31, 2021), he was eligible to receive a 1.5% share of the incremental EBIT produced by the business units under his direction in the three years of the performance period in excess of the EBIT produced by those businesses in 2018
(the base year for the 2019 award), subject to a cap of 150% of his 2019 base salary.
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