Exhibit 10.7

SUMMARY SHEET OF EXECUTIVE CASH COMPENSATION

This Summary Sheet contains the 2019 and 2020 annual base salaries and target
percentages under the Key Officers Incentive Plan (“KOIP”) adopted by the
Board’s Compensation Committee (the “Committee”) on November 5, 2018 and
November 4, 2019, respectively, and the 2019 individual performance goals
(“IPGs”) adopted by the Committee on November 5, 2018, for the Company’s
principal executive officer, principal financial officer and other named
executive officers.

 

Named Executive Officers

   2019 Base
Salary      2020 Base
Salary  

Karl G. Glassman, President & CEO
(Chairman and CEO, effective 1/1/2020)

   $ 1,225,000      $ 1,225,000  

J. Mitchell Dolloff, COO & EVP, President – Specialized Products & Furniture
Products
(President & COO, President – Bedding Products, effective 1/1/2020)

   $ 600,000      $ 700,000  

Jeffrey L. Tate, EVP & CFO1

   $ 550,000      $ 570,000  

Perry E. Davis, EVP, President – Residential Products & Industrial Products2
(SVP – Operations, effective 1/1/2020)

   $ 530,000      $ 530,000  

Scott S. Douglas, SVP – General Counsel & Secretary

   $ 420,000      $ 450,000  

Matthew C. Flanigan, Former EVP & CFO3

   $ 572,000        N/A  

 

1 

As previously reported, on August 6, 2019, Mr. Tate was appointed Executive Vice
President and Chief Financial Officer, effective September 3, 2019 (“Start
Date”). In addition to his base salary, Mr. Tate received a one-time cash
sign-on bonus of $250,000 upon the Start Date, which must be repaid if he
terminates his employment without “Good Reason,” or is terminated for “Cause”
within the first year of employment, and half of which must be repaid, under the
same circumstances, within the second year of employment. Moreover, if Mr. Tate
is terminated, other than for “Cause,” death or disability, or if he terminates
his employment for “Good Reason,” then the Company must pay Mr. Tate (a) 12
months of base salary if the termination occurs within the first 12 months after
the Start Date, or 6 months of base salary if the termination occurs between 12
and 24 months after the Start Date; (b) a pro-rata incentive award under the
KOIP for the year in which the termination occurred; and (c) a lump sum payment
equal to 18 months of COBRA medical coverage. The Company must also provide
reasonable and customary outplacement services for the shorter of 12 months from
termination or the date Mr. Tate accepts another position. For definitions of
“Good Reason” and “Cause,” reference is made to the Separation Agreement between
Mr. Tate and the Company, dated August 6, 2019, filed August 6, 2019 as Exhibit
10.12 to the Company’s Form 8-K.

2 

As previously reported, Mr. Davis notified the Company of his decision to retire
from the Company effective February 7, 2020. He will serve in a non-executive
officer role as Senior Vice President – Operations, beginning January 1, 2020.
As such, he did not receive a salary adjustment for 2020.

3 

As previously reported, on September 3, 2019, Mr. Flanigan retired as Chief
Financial Officer and began serving in a non-executive officer position. Also,
as previously reported, on September 25, 2019, he notified the Company of his
decision to retire from the Company effective December 31, 2019. As such,
Mr. Flanigan will not receive a salary in 2020.

Except as noted below, the named executive officers will be eligible to receive
an annual cash incentive under the KOIP (filed February 28, 2019 as Exhibit 10.1
to the Company’s Form 8-K) in accordance with the 2020 KOIP Award Formula
(expected to be adopted in February 2020). Each executive’s cash award is
expected to be calculated by multiplying his annual base salary at the end of
the KOIP plan year by a percentage set by the Committee (the “Target
Percentage”), then applying the award formula adopted by the Committee for that
year. The Award Formula in 2019 consisted of three performance criteria: Return
on Capital Employed (“ROCE”) (60% Relative Weight), Cash Flow (20% Relative
Weight) and individual

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performance goals (“IPGs”) (20% Relative Weight). The performance criteria for
2020 is not expected to include IPGs but is expected to include ROCE and Cash
Flow. As previously reported, the Target Percentages in 2019, and as adopted for
2020 by the Committee on November 4, 2019, for the principal executive officer,
principal financial officer, and other named executive officers are shown in the
following table.

 

Named Executive Officers

   2019 KOIP
Target
Percentage    2020 KOIP
Target
Percentage

Karl G. Glassman, President & CEO
(Chairman and CEO, effective 1/1/2020)

   120%    120%

J. Mitchell Dolloff, COO & EVP, President – Specialized Products & Furniture
Products
(President & COO, President – Bedding Products, effective 1/1/2020)

   100%    100%

Jeffrey L. Tate, EVP & CFO1

     80%      80%

Perry E. Davis, EVP, President – Residential Products & Industrial Products2
(SVP – Operations, effective 1/1/2020)

     80%    N/A    

Scott S. Douglas, SVP – General Counsel & Secretary

     60%      60%

Matthew C. Flanigan, Former EVP & CFO3

     80%    N/A    

 

1 

As previously reported, on August 6, 2019, Mr. Tate was appointed Executive Vice
President and Chief Financial Officer, effective September 3, 2019. As such, his
2019 KOIP Target Percentage was set on August 6, 2019. Also, in 2019, Mr. Tate’s
KOIP Award Formula, will not be based on the 2019 Award Formula (60% ROCE, 20%
Cash Flow and 20% IPGs), but rather will be based on 70% ROCE and 30% Cash Flow
of the Company, prorated for the number of days employed in 2019.

2 

As previously reported, Mr. Davis notified the Company of his decision to retire
from the Company, effective February 7, 2020. He will serve in a non-executive
officer role as Senior Vice President – Operations, beginning January 1, 2020.
As such, he will not receive a KOIP incentive in 2020.

3 

As previously reported, on September 3, 2019, Mr. Flanigan retired as Chief
Financial Officer and began serving in a non-executive officer position. On
September 25, 2019, he notified the Company of his decision to retire from the
Company effective December 31, 2019. As such, Mr. Flanigan will not receive a
KOIP incentive in 2020. Mr. Flanigan’s 2019 KOIP incentive will not be based on
the 2019 Award Formula (60% ROCE, 20% Cash Flow, and 20% IPGs), but rather will
be based on 70% ROCE and 30% Cash Flow of the Company.

Individual Performance Goals. On November 5, 2018, the Committee adopted IPGs
for our named executive officers for 2019. Except as noted below, the 2019 KOIP
Award Formula, provides that 20% of each executive’s cash award under our KOIP
will be based on the achievement of IPGs. The 2020 KOIP Award Formula is
expected to be adopted in February 2020 and is not expected to include IPGs. The
IPGs for our named executive officers in 2019 are:

 

2

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Named Executive Officers

  

2019 IPGs

  

2020 IPGs

Karl G. Glassman, President & CEO
(Chairman and CEO, effective 1/1/2020)

   Acquisition integration, succession planning, CFO onboarding and
communications strategy    N/A

J. Mitchell Dolloff, COO & EVP, President – Specialized Products & Furniture
Products
(President & COO, President – Bedding Products, effective 1/1/2020)

   Implementation of growth strategy and succession planning    N/A

Jeffrey L. Tate, EVP & CFO1

   N/A    N/A

Perry E. Davis, EVP, President – Residential Products & Industrial Products2
(SVP – Operations, effective 1/1/2020)

   Acquisition integration and succession planning    N/A

Scott S. Douglas, SVP – General Counsel & Secretary

   Implementation of growth strategy, succession planning and operational
initiatives    N/A

Matthew C. Flanigan, Former EVP & CFO3

   N/A    N/A

 

1 

As previously reported, on August 6, 2019, Mr. Tate was appointed Executive Vice
President and Chief Financial Officer, effective September 3, 2019. As such,
Mr. Tate was not assigned IPGs for 2019.

2

As previously reported, Mr. Davis notified the Company of his decision to retire
from the Company, effective February 7, 2020. He will serve in a non-executive
officer role as Senior Vice President – Operations, beginning January 1, 2020.

3

As previously reported, on September 3, 2019, Mr. Flanigan retired as Chief
Financial Officer and began serving in a non-executive officer position. On
September 25, 2019, he notified the Company of his decision to retire from the
Company effective December 31, 2019. Mr. Flanigan was not assigned IPGs for
2019.

The achievement of the IPGs is measured by the following schedule.

 

Individual Performance Goals

Payout Schedule

 

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%  

 

3