2015 Award Formula under the Company's 2014 Key Officers Incentive Plan



 Exhibit 10.3 

AWARD FORMULA FOR 2015 

LEGGETT & PLATT, INCORPORATED 

2014 KEY OFFICERS INCENTIVE PLAN 
 The 2014
Key Officers Incentive Plan (the “Plan”) provides cash Awards to Participants based on the Company’s operating results for the prior year. Capitalized terms not defined in this document have the meaning ascribed under the Plan.
There are separate Award Formulas under the Plan for Corporate Participants and Profit Center Participants. 
 Under both formulas, a Participant’s
Award is calculated by reference to the Target Percentage of the Participant’s annual salary at the end of the Year. The Award Formulas and each Participant’s Target Percentage are determined by the Committee no later than 90 days after
the beginning of each Year or before 25% of the Performance Period has elapsed. 
 Participants in the Plan are the executive officers of the Company. The
Company has a separate Key Management Incentive Plan for other employees. Awards under the Key Management Incentive Plan are calculated in substantially the same manner as awards under the Plan. 

For 2015, Awards under the Plan will be determined by achievement of the following Performance Objectives. Additional awards will be made based on the
achievement of Individual Performance Goals, which will be established separately from this Plan and will be wholly independent of Awards under this Plan. 
  

							
	 Participant Type
	  	 Performance Objectives
	  	Relative
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.  

 Award Formula for Corporate Participants

 Awards for Corporate Participants are determined by the Company’s aggregate 2015 financial results. Financial results from acquisitions are
excluded from calculations in the year of acquisition. Financial results from businesses divested during the year will be included in the calculations; however, the Performance Objective targets relating to the divested businesses will be prorated
to reflect that portion of the year prior to the divestiture. Financial results from businesses classified as discontinued operations will be included in the calculations. 

The Performance Objectives for Corporate Participants are calculated as follows: 
  

					
	ROCE =	 	 EBIT
	  	
		 	Net PP&E and Working Capital1, 2	  	

  

	1 	Quarterly averaging of Net PP&E and Working Capital 


	2 	Working Capital, excluding cash and current maturities of long-term debt, as presented on the Company’s December 31, 2015 Consolidated Balance Sheet 


 

			
	Cash Flow	 	= EBITDA ± Change in Working Capital1 + Non-Cash Impairments – Capital Expenditures

  

	1 	Change in Working Capital, excluding cash and current maturities of long-term debt, from December 31, 2014 to December 31, 2015, as reflected on the Company’s Consolidated Balance Sheets









 The Committee shall adjust the Performance Objectives for all items of gain, loss or expense for the fiscal year,
as determined in accordance with standards established under Generally Accepted Accounting Principles, (i) from non-cash impairments; (ii) related to loss contingencies identified in Note T to the financial statements in the Company’s
2014 10-K; (iii) that are (a) extraordinary, (b) unusual in nature, or (c) infrequent in occurrence; (iv) related to the disposal of a segment of a business; or (v) related to a change in accounting principle. 

Achievement targets and payout percentages for Corporate Participants’ Performance Objectives are set forth below. No Awards are paid for ROCE
achievement below 32% and Cash Flow below $225M. The ROCE and Cash Flow payouts are each capped at 150%. Payouts will be interpolated for achievement levels falling between those set out in the schedule. 

2015 
 Corporate Targets
and Payout Schedule 
  

																	
	ROCE	 	 	 	  	Cash Flow	 
	 Achievement
	 	 	Payout	 	 	 	  	Achievement	 	  	Payout	 
	 	< 32.0	% 	 	 	0	% 	 		  	<$	225.0M	  	  	 	0	% 
	 	32.0	% 	 	 	50	% 	 	Threshold	  	$	225.0M	  	  	 	50	% 
	 	34.5	% 	 	 	75	% 	 		  	$	262.5M	  	  	 	75	% 
	 	37.0	% 	 	 	100	% 	 	Target	  	$	300.0M	  	  	 	100	% 
	 	39.5	% 	 	 	125	% 	 		  	$	337.5M	  	  	 	125	% 
	 	42.0	% 	 	 	150	% 	 	Maximum	  	$	375.0M	  	  	 	150	% 

 The Award is calculated by multiplying a Participant’s salary, Target Percentage, the relative weight of the Performance
Objective, and the payout percentage. The sample calculation set forth below assumes a Participant with a base salary of $250,000 and a Target Percentage of 50%. If the Company achieved 37% ROCE and $225M Cash Flow, the Participant’s Award
under the Plan (which does not include the Individual Performance Goals), would be $87,500. 
  

																													
	 Performance Objective
	  	Participant’s
Base Salary	 	  	        	  	Participant’s
Target %	 	 	        	  	Relative
Weight	 	 	        	  	Payout
Percentage	 	 	        	  	Award	 
	 ROCE
	  	$	250,000	  	  		  	 	50	% 	 		  	 	60	% 	 		  	 	100	% 	 		  	$	75,000	  
	 Cash Flow
	  	$	250,000	  	  		  	 	50	% 	 		  	 	20	% 	 		  	 	50	% 	 		  	$	12,500	  
	 Total Award
	  				  		  				 		  				 		  				 		  	$	87,500	  

 Award Formula for Profit Center Participants 

Profit Center Participants manage numerous Profit Centers. The Company sets a ROCE target and a FCF target for each Profit Center every Year. The achievement
of those Profit Center targets “rolls up” to an aggregate achievement for all the operations under a Profit Center Participant’s management. 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 calculations in the year of acquisition. Financial results from businesses divested during the year will be included in the calculations; however, the Performance Objective targets relating to the divested businesses
will be prorated to reflect that portion of the year prior to the divestiture. Financial results from businesses classified as discontinued operations will be included in the calculations. 

The Performance Objectives for Profit Center Participants are calculated as follows: 

 

					
	ROCE =	 	 EBIT
	  	
		 	Net PP&E + Working Capital1, 2	  	

  

	1 	Monthly averaging of Net PP&E and Working Capital, adjusted for currency effects. 


	2 	Working Capital excludes cash and current maturities of long-term debt and balance sheet items not directly related to on-going Profit Center activity, such as interest receivable and payable, income taxes receivable
and payable, current deferred tax assets and liabilities, and dividends payable. 


  
 2 









			
	FCF =	 	EBITDA (adjusted for currency effects) ± Change in Working Capital1 + Non-Cash Impairments – Capital Expenditures

  

	1 	Change in Working Capital from December 31, 2014 to December 31, 2015 excludes cash and current maturities of long-term debt and balance sheet items not directly related to on-going Profit Center activity,
such as interest receivable and payable, income taxes receivable and payable, current deferred tax assets and liabilities, and dividends payable. 


The Committee shall adjust the Performance Objectives for all items of gain, loss or expense for the fiscal year, as determined in accordance with standards
established under Generally Accepted Accounting Principles, (i) from non-cash impairments; (ii) related to loss contingencies identified in Note T to the financial statements in the Company’s 2014 10-K; (iii) that are
(a) extraordinary, (b) unusual in nature, or (c) infrequent in occurrence; (iv) related to the disposal of a segment of a business; or (v) related to a change in accounting principle. 

Achievement targets and payout percentages for Profit Center Participants are set forth below. No Awards are paid for achievement below 80% of the aggregate
ROCE and FCF targets for the Profit Centers under the Participant’s management. The ROCE and FCF payouts are each capped at 150%. The payout will be interpolated for achievement levels falling between those set out in the schedule. 

2015 
 Profit Center
Targets 
  

									
	 Segment
	  	ROCE Target	 	 	FCF Target	 
	 Residential
	  	 	30.7	% 	 	$	143.0M	  
	 Commercial
	  	 	37.0	% 	 	$	31.2M	  
	 Specialized & Industrial
	  	 	43.0	% 	 	$	148.3M	  

 2015 

Profit Center Payout Schedule 
  

									
	 Achievement
	 	 	 	  	Payout	 
	 	<80	% 	 		  	 	0	% 
	 	80	% 	 	Threshold	  	 	60	% 
	 	90	% 	 		  	 	80	% 
	 	100	% 	 	Target	  	 	100	% 
	 	110	% 	 		  	 	120	% 
	 	120	% 	 		  	 	140	% 
	 	125	% 	 	Maximum	  	 	150	% 

 The Award is calculated by multiplying a Participant’s salary, Target Percentage, the relative weight of the Performance
Objective, and the payout percentage. The sample calculation below assumes a Participant with a base salary of $250,000 and a Target Percentage of 50%. If the Participant’s Profit Centers achieved 100% of the aggregate ROCE target and 90% of
the aggregate FCF target, as adjusted for compliance, the Participant’s Award under the Plan (which does not include the Individual Performance Goals), would be $95,000. 
  


																													
	 Performance Objective
	  	Participant’s
Base Salary	 	  	         
	  	Participant’s
Target %	 	 	         
	  	Relative
Weight	 	 	         
	  	Payout
Percentage	 	 	         
	  	Award	 
	 ROCE
	  	$	250,000	  	  		  	 	50	% 	 		  	 	60	% 	 		  	 	100	% 	 		  	$	75,000	  
	 FCF
	  	$	250,000	  	  		  	 	50	% 	 		  	 	20	% 	 		  	 	80	% 	 		  	$	20,000	  
	 Total Award
	  				  		  				 		  				 		  				 		  	$	95,000	  


  
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