EXHIBIT 10.2

AWARD FORMULA FOR 2006

LEGGETT & PLATT, INCORPORATED

2004 KEY OFFICERS INCENTIVE PLAN

The 2004 Key Officers Incentive Plan (“Plan”) provides cash awards to executive
officers of the Company based on the Company’s operating results for the prior
year. Awards are calculated based on Return on Net Assets, using either the
Corporate Formula or the Profit Center Formula, depending on the type of
participant.

Return on Net Assets (“RONA”), as defined by the Plan, is Leggett’s return for
the year on its net assets. Certain adjustments are made to Earnings Before
Interest and Taxes (EBIT) and net asset amounts reported in the Company’s
Consolidated Financial Statements to determine Plan RONA. “Return” is equal to
EBIT with addbacks for Management Incentive Bonus and Additional Stock Match.
“Net Assets” are total assets with the following adjustments: (i) deduction of
cash and current liabilities, (ii) deduction or addback of accumulated other
comprehensive income (deduction if positive, addback if negative) reported in
shareholder’s equity section of the balance sheet, and (iii) quarterly averaging
of all calculations. Acquisitions are excluded from bonus calculations during
the first two years after the acquisition date.

Award Formula for Corporate Participants

Corporate awards made under the Plan are based on the Company’s overall
financial performance during the previous year. The award for corporate
participants is made up of the following:

 

Corporate Portion    90% of total award Discretionary Portion    10% of total
award

The Corporate Portion is based on three factors: (1) a participant’s Salary on
the last day of the year, (2) a participant’s Incentive Percentage assigned by
management, and (3) the Corporate Payout Percentage. The Discretionary Portion
is based on a manager’s evaluation of the participant’s performance during the
year. When the Company achieves at least 11% RONA in a calendar year, the
corporate Payout Percentage will begin at 35% and will follow the schedule
below. Payout Percentages for returns that fall between whole RONA percentage
points are adjusted proportionately. No awards are payable for a year when RONA
falls below 11%. The total incentive payout will be limited to 4% of EBIT.

The award is calculated by multiplying a participant’s Salary, his Incentive
Percentage, and the Payout Percentage. For example, assume a participant’s
Salary is $300,000, his Incentive Percentage is 50% and the company achieved a
15% RONA for an 85% Payout Percentage. The participant’s award would be $127,500
($300,000 x 50% x 85%). Of this $127,500, the Corporate Portion is 90%, or
$114,750, and the Discretionary Portion is 10%, or $12,750. The Discretionary
Portion may be less than $12,750, depending on the manager’s evaluation of the
participant’s performance during the year.

 

CORPORATE PARTICIPANT PAYOUT SCHEDULE

RONA

  

Payout %

8%

   0%

9%

   0%

10%

   0%

11%

   35%

12%

   45%

13%

   55%

14%

   65%

15%

   85%

16%

   105%

17%

   125%

18%

   145%

19%

   165%

20%

   185%

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The Compensation Committee has established a different payout schedule for the
Company’s Executive Team, consisting of the top three corporate officers. Under
the Executive Team payout schedule below, no bonus is payable if RONA is below
12%. For returns between 12% and 16%, the payout schedule mirrors that for other
Corporate Participants. For returns above 16%, however, the Executive Team
payout is higher.

Using the schedule below, if the Company achieved an 18% RONA, the resulting
corporate payout for the Executive Team would be 160% (compared to 145% for
other Corporate Participants). For an Executive Team participant with a Salary
of $700,000 and an Incentive Percentage of 50%, the award would be $560,000
($700,000 x 50% x 160%), assuming a full Discretionary Portion.

 

EXECUTIVE TEAM PAYOUT SCHEDULE

RONA

  

Payout %

8%

   0%

9%

   0%

10%

   0%

11%

   0%

12%

   45%

13%

   55%

14%

   65%

15%

   85%

16%

   105%

17%

   130%

18%

   160%

19%

   190%

20%

   220%

Award Formula for Profit Center Participants

Profit Center awards are based on the budget achievement of a particular group
of operating locations as well as the Company’s overall financial performance
during the previous year. The award for profit center participants is made up of
the following:

 

Profit Center Portion    75% of total award Corporate and Discretionary Portion
   25% of total award

Each profit center has budgeted operating income for the year. The Profit Center
Portion of the award is based on the profit center’s achievement of that budget.
The table below is used to determine the payout. The highlighted part of this
table, for example, shows that participants in a profit center that achieves 90%
of budget would have an 80% Profit Center Payout Percentage. The Profit Center
Portion of the award is calculated by multiplying a participant’s Salary, his
Incentive Percentage, and this Payout Percentage by 75%. Accordingly, for a
participant with a $300,000 Salary and a 50% Incentive Percentage, the Profit
Center Portion of the award would be $90,000 ($300,000 x 50% x 80% x 75%).

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The Corporate and Discretionary Portion of the award is calculated as explained
above under the Award Formula for Corporate Participants section, with a
Corporate Payout Percentage based on the Company’s RONA. Assuming the Company
achieved a 15% RONA for an 85% Payout Percentage, the maximum Corporate and
Discretionary Portion would be $31,875 ($300,000 x 50% x 85% x 25%). 10% of this
amount, or $3,188, would be discretionary based on the manager’s evaluation of
the participant’s performance during the year.

Thus, assuming a full discretionary portion, the total award for this Profit
Center Participant would be $121,875 ($90,000 + $31,875).

 

PROFIT CENTER TABLE

Budget %

Achieved

  

Pays

This %

  

Budget %

Achieved

  

Pays

This %

<62.5%

   0%    81%    62%

62.5%

   25%    82%    64%

63%

   26%    83%    66%

64%

   28%    84%    68%

65%

   30%    85%    70%

66%

   32%    86%    72%

67%

   34%    87%    74%

68%

   36%    88%    76%

69%

   38%    89%    78%

70%

   40%    90%    80%

71%

   42%    91%    82%

72%

   44%    92%    84%

73%

   46%    93%    86%

74%

   48%    94%    88%

75%

   50%    95%    90%

76%

   52%    96%    92%

77%

   54%    97%    94%

78%

   56%    98%    96%

79%

   58%    99%    98%

80%

   60%    >100%    100%