Exhibit 10.4
AMENDED AND
RESTATED
SEVERANCE BENEFIT
AGREEMENT
This Severance Benefit Agreement
(the “ Agreement ”) is made as of
11/15/08 between Leggett & Platt, Incorporated,
No. 1 Leggett Road, Carthage, Missouri 64836 (the “
Company ”) and Karl G. Glassman (the “
Executive ”), residing at 9732 Early Lane, Carthage,
Missouri 64836.
RECITALS
The Executive functions as Chief
Operating Officer and Executive Vice President of the Company on
the date hereof and is one of the key employees of the
Company.
The Company considers the
maintenance of sound and vital management essential to protecting
and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that in
today’s business environment the possibility of a change in
control of the Company may exist in the future. The Company further
recognizes that such possibility, and the uncertainty which it may
raise among key executives, could result in the departure or
distraction of key executives to the detriment of the Company and
its shareholders. Accordingly, the Board of Directors of the
Company (the “ Board ”) has determined that
appropriate steps should be taken (i) to further induce the
Executive to remain with the Company and (ii) to reinforce and
encourage the continued attention and dedication of the Executive
to his assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility
of a change in control of the Company. This Agreement supercedes
the Severance Benefit Agreement between the Company and the
Executive dated May 10, 2006.
NOW, THEREFORE, in consideration of
the premises and for other good and valuable considerations, the
receipt of which are hereby acknowledged, the Company and the
Executive agree as follows:
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1.
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Change in
Control; Employment Agreement
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1.1 Change in Control
. The Company may be required to provide certain benefits to the
Executive under this Agreement following each and every “
Change in Control ” of the Company.
A “ Change in Control
” of the Company shall be deemed to have occurred
if:
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(a)
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There is any
change in control as contemplated by (i) Item 6(e) of
Schedule 14A, Regulation 14A, promulgated under the Securities
Exchange Act of 1934, as amended (the “ Exchange Act
”) or (ii) Item 5.01 of Form 8-K promulgated by the
Securities and Exchange Commission under the Exchange Act;
or
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(b)
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Any
“person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 25% or more of the combined voting power
of the Company’s then outstanding voting securities;
or
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(c)
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Those persons
serving as directors of the Company on the date of this Agreement
(the “ Original Directors ”) and/or their
Successors do not constitute a majority of the whole Board of
Directors of the Company (the term “ Successors
” shall mean those directors whose election or nomination for
election by the Company’s shareholders has been approved by
the vote of at least two-thirds of the Original Directors and
previously qualified Successors serving as directors of the Company
at the time of such election or nomination for election);
or
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(d)
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The Company
shall be a party to a merger or consolidation with another
corporation and as a result of such merger or consolidation, less
than 75% of the outstanding voting securities of the surviving or
resulting corporation shall be owned in the aggregate by the former
shareholders of the Company as the same shall have existed
immediately prior to such merger or consolidation; or
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(e)
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The Company
liquidates, sells, or otherwise transfers all or substantially all
of its assets to a person not controlled by the Company both
immediately prior to and immediately after such sale.
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1.2 Employment
Agreement . Any benefits provided to the Executive under
this Agreement will, unless specifically stated otherwise in this
Agreement, be in addition to and not in lieu of any benefits that
may be provided the Executive under his Employment Agreement with
the Company dated May 10, 2006 (this agreement, as amended,
restated or superseded, is called the “ Employment
Agreement ”).
This Agreement shall continue for
the term provided in Section 7.6 and shall not be affected by
any termination of the Employment Agreement.
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2.
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Termination of Employment Following a Change in
Control
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2.1 General . During
the 30 month period immediately following each and every Change in
Control (the “ Protected Period ”), the
Executive and the Company shall comply with all provisions of this
Section 2 regarding termination of the Executive’s
employment.
2.2 Termination for
Disability . If the Employment Agreement is not in force,
the Company may terminate the Executive’s employment for
Disability. If the Employment Agreement is in force, the Company
may terminate the Executive’s employment for disability only
in accordance with the terms of the Employment Agreement. “
Disability ” as used in this Agreement, as
distinguished from the Employment Agreement, shall mean the
Executive’s absence from, and his inability to substantially
perform, his duties with the Company for a continuous period of six
or more months as a result of physical causes or mental illness.
During any period prior to the termination of his employment that
the Executive is absent from, and is unable to substantially
perform, his duties with the Company as a result of physical causes
or mental illness, the Company shall continue to pay the Executive
his full base salary at the
2
rate then in effect and any bonuses earned by
the Executive under Company bonus plans until such time as the
Executive’s employment is terminated by the Company for
Disability. In no event, however, shall such period of continued
pay and bonus exceed 29 consecutive months. Following termination
of employment under this Section 2.2, the Executive’s
benefits shall be determined in accordance with the Company’s
long term disability program as in effect on the date hereof, or
any successor program then in effect.
2.3 Termination by Company for
“Cause” . If the Employment Agreement is not in
force, the Company may terminate the Executive for Cause as defined
in this Agreement. If the Employment Agreement is in force, the
Company may terminate the Executive for cause only in accordance
with the terms of the Employment Agreement.
Termination for “Cause”
under this Agreement, as distinguished from the Employment
Agreement, shall be limited to the following:
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(a)
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The
Executive’s conviction of any crime involving money or other
property of the Company or any of its affiliates (including
entering any plea bargain admitting criminal guilt), or a
conviction of any other crime (whether or not involving the Company
or any of its affiliates) that constitutes a felony in the
jurisdiction involved; or
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(b)
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The
Executive’s willful breach of the Company’s Code of
Business Conduct (or any successor policy) which causes material
injury to the Company; or
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(c)
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The
Executive’s willful act or omission involving fraud,
misappropriation, or dishonesty that (i) causes material
injury to the Company or (ii) results in a material personal
enrichment to the Executive at the expense of the Company;
or
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(d)
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The
Executive’s willful violation of specific written directions
of the Board or the Company’s Chief Executive Officer
provided that such directions are consistent with this Agreement
and the Executive’s duties and do not constitute Company
Action as defined in Section 2.4, and provided that such
violation continues following the Executive’s receipt of
written notice by the Board or the Company’s Chief Executive
Officer specifying the specific acts or omissions alleged to
constitute such violation and such violation continues after
affording the Executive reasonable opportunity to remedy such
failure after receipt of such notice; or
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(e)
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The
Executive’s continued, repeated, willful failure to
substantially perform his duties; provided, however, that no
discharge shall be deemed for Cause under this subsection
(e) unless the Executive first receives written notice from
the Board or the Company’s Chief Executive Officer advising
the Executive of specific acts or omissions alleged to constitute a
failure to perform his duties, and such failure continues after the
Executive has had a reasonable opportunity to correct the acts or
omissions so complained of.
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No act or failure to act on the
Executive’s part shall be considered “ willful
” unless done, or omitted to be done, by the Executive in bad
faith and without reasonable belief that his action or omission was
in the best interest of the Company. Moreover, the Executive shall
not be terminated for Cause unless and until there shall have been
delivered to the Executive a notice of termination duly adopted by
the affirmative vote of at least a majority of the directors of the
Board at a meeting of the Board (after reasonable notice to the
Executive and an opportunity for the Executive, together with his
counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of the conduct
set forth in Section 2.3(a), (b), (c), (d) or
(e) and specifying the particulars thereof in
detail.
A termination shall not be deemed
for Cause if, for example, the termination results from the
Company’s determination that the Executive’s position
is redundant or unnecessary or that the Executive’s
performance is unsatisfactory or if the termination stems from the
Executive’s refusal to agree to or accept any Company Action
described in Section 2.4.
2.4 Termination by Executive
for Good Reason . The Executive may, whether or not his
Employment Agreement remains in force, terminate his employment for
“ Good Reason ” by giving notice of termination
to the Company following (i) any action or omission by the
Company described in this Section 2.4 or (ii) receipt of
notice from the Company of the Company’s intention to take
any such action or engage in any such omission. A termination of
employment under this Section 2.4 shall be deemed a valid and
proper termination of the Employment Agreement if then in force
and, to this extent, the parties agree that the Employment
Agreement is hereby amended.
The actions or omissions which may
lead to a termination of employment for Good Reason (herein
collectively and severally “ Company Actions ”)
are as follows:
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(a)
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A reduction by
the Company in the Executive’s base salary as in effect
immediately prior to the Change in Control or a failure by the
Company to increase the Executive’s base salary each year
during the Protected Period by an amount which at least equals, on
a percentage basis, the annual increase in the Consumer Price Index
for Urban Workers (CPI-U) for the applicable year; or
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(b)
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A change in the
Executive’s reporting responsibilities or offices as in
effect immediately prior to a Change in Control that results in a
material diminution within the Company of authority or
responsibility; or
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(c)
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The assignment
to the Executive of any duties or responsibilities that, in any
material aspect, are inconsistent with the Executive’s duties
and responsibilities with the Company immediately prior to the
Change in Control or a material expansion of such duties and
responsibilities without the Executive’s written consent;
or
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(d)
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A failure by
the Company, without providing substantially similar economic
benefits, to (i) continue any cash bonus or other incentive
plans substantially in the forms in effect immediately prior to the
Change in Control, or (ii) continue the Executive as a
participant in such plans on at least the same basis as the
Executive participated in accordance with the plans immediately
prior to the Change in Control; or
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(e)
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A requirement
by the Company that the Executive be based or perform his duties
more than 50 miles from the Company’s Corporate Office
location immediately prior to the Change in Control, except for
required travel on the Company’s business to an extent
substantially consistent with the Executive’s business travel
obligations immediately prior to the Change in Control or, if the
Executive consents in writing to any relocation, the failure by the
Company to pay (or reimburse the Executive for) all reasonable
expenses incurred by him relating to a change of his principal
residence in connection with such relocation; or
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(f)
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A failure by
the Company, without providing substantially similar economic
benefits, to continue in effect any benefit or other compensation
plan ( e.g. , stock ownership plan, stock purchase plan,
stock option plan, life insurance plan, health and accident plan or
disability plan) in which the Executive is participating at the
time of a Change in Control (or plans providing the Executive with
substantially similar economic benefits), or the taking of any
action which would adversely affect the Executive’s
participation in or materially reduce the Executive’s
benefits under any of such plans; or
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(g)
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The
Company’s failure to provide the Executive with the number of
paid vacation days to which he is entitled in accordance with the
Company’s normal vacation practices with respect to the
Executive at the time of the Change in Control; or
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(h)
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A failure by
the Company to obtain the assumption agreement to perform this
Agreement by any successor as contemplated by Section 6 of
this Agreement; or
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(i)
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Any purported
termination of the Executive’s employment for Disability or
for Cause that is not carried out (i) pursuant to a notice of
termination which satisfies the requirements of Section 2.5 or
(ii) in accordance with Section 2.3, if applicable; and
for purposes of this Agreement, no such purported termination shall
be effective.
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2.5 Notice of Termination and
Opportunity to Cure . Any purported termination by the
Company of the Executive’s employment under Section 2.2
(Disability) or 2.3 (for Cause) or by the Executive under
Section 2.4 (for Good Reason) shall be communicated by notice
of termination to the other party. A notice of termination shall
mean a notice which includes the specific termination Section in
this Agreement relied upon and shall set forth, in reasonable
detail, the facts and circumstances claimed to provide a basis for
termination of employment under the Section so indicated. Notice of
termination for Good Reason under Section 2.4 shall be made by
the Executive no later than 90 days from the date such Good Reason
first arises. If, within 30 days of receipt of such notice, the
Company takes such appropriate actions as are necessary to correct,
reverse or cure these facts and circumstances that the Executive
identifies as causing Good Reason, then no Good Reason shall have
occurred.
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2.6 Date of
Termination . The date the Executive’s employment is
terminated under Section 2 of this Agreement is called the
“ Date of Termination ”. In cases of Disability,
the Date of Termination shall be 30 days after notice of
termination is given (provided that the Executive shall not have
returned to the performance of his duties on a full-time basis
during such prior 30 day period). If the Executive’s
employment is terminated for Cause, the Date of Termination shall
be the date specified in the notice of termination. If the
Executive’s employment is terminated for Good Reason, the
Date of Termination shall be the date set out in the
noti
