Table of Contents

March 26, 2009

Dear Shareholder:

I am pleased to invite you to attend the annual meeting of shareholders of Leggett & Platt, Incorporated to be held on Thursday, May 7, 2009, at 10:00 a.m. Central Time, at the Company’s Wright Conference Center. Directions are included on the back inside cover of this Proxy Statement.

The Proxy Statement contains three proposals from our Board of Directors: (i) the election of nine directors, (ii) the ratification of the Audit Committee’s selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2009, and (iii) the approval of the 2009 Key Officers Incentive Plan. The Board encourages you to vote FOR each of these proposals.

The Proxy Statement also contains a shareholder proposal seeking to add sexual orientation and gender identity to the Company’s written non-discrimination policy. For reasons explained in the Proxy Statement, the Board encourages you to vote AGAINST this proposal.

Your vote is important. Whether or not you plan to attend the meeting, please vote as soon as possible. You may vote your shares by Internet at www.eproxy.com/leg or by returning the enclosed proxy or voting instruction card. Specific instructions for these voting alternatives are contained on the proxy or voting instruction card.

I appreciate your continued interest in Leggett & Platt.

Table of Contents

Leggett & Platt, Incorporated

No. 1 Leggett Road

Carthage, Missouri 64836

NOTICE OF 2009 ANNUAL MEETING OF SHAREHOLDERS

The annual meeting of shareholders of Leggett & Platt, Incorporated (the “Company”) will be held at the Company’s Wright Conference Center, No. 1 Leggett Road, Carthage, Missouri 64836, on Thursday, May 7, 2009, at 10:00 a.m. Central Time:

You are entitled to vote only if you were a Leggett & Platt shareholder at the close of business on March 5, 2009.

An Annual Report to Shareholders outlining the Company’s operations during 2008 accompanies this Notice of Annual Meeting and Proxy Statement.

Carthage, Missouri

March 26, 2009

Table of Contents

Leggett & Platt, Incorporated

ANNUAL MEETING—MAY 7, 2009

PROXY STATEMENT

TABLE OF CONTENTS

1

Table of Contents

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

Why did I receive these materials?

The Board of Directors (the “Board”) of Leggett & Platt, Incorporated (the “Company” or “Leggett”) is providing these materials to you in connection with its solicitation of proxies for the Company’s annual meeting of shareholders on May 7, 2009. We first sent these materials to shareholders on March 26, 2009. As a Leggett shareholder, you are entitled and encouraged to vote on the proposals presented in these proxy materials. We invite you to attend the annual meeting, but you do not have to attend to be able to vote.

Where can I obtain financial information about Leggett?

Our Annual Report to Shareholders, including our Form 10-K with financial statements for 2008, is enclosed in the same mailing with this Proxy Statement. The Company’s Proxy Statement and Annual Report to Shareholders (including Form 10-K) are also available at www.leggett.com/proxy/2009/default.asp. Information on our website does not constitute part of this Proxy Statement.

What business will be voted on at the annual meeting?

Shareholders will vote on the following proposals at the annual meeting:

How does the Board recommend that I vote?

The Board recommends that you vote:

If you return a signed proxy card without marking one or more proposals, your proxy will be voted in accordance with the Board’s recommendation.

What shares can I vote?

The only class of outstanding voting securities is the Company’s $.01 par value common stock. Each share of common stock issued and outstanding at the close of business on March 5, 2009 (the “Record Date”) is entitled to one vote on each matter submitted to a vote at the annual meeting. On the Record Date, we had 156,594,482 shares of common stock issued and outstanding.

2

Table of Contents

You may vote all shares of Leggett common stock you owned on the Record Date. This includes (i) shares held directly in your name as the shareholder of record, (ii) shares held for you as the beneficial owner through a broker, trustee or other nominee, sometimes referred to as shares held in “street name,” and (iii) shares held for you in Company benefit plans.

Shareholder of Record

If your shares are registered directly in your name with our transfer agent, Wells Fargo, you are the shareholder of record, and these proxy materials were sent to you directly. As the shareholder of record, you have the right to grant your proxy vote directly or to vote in person at the annual meeting. We have enclosed a proxy card for you to use.

Beneficial Owner

If you hold shares in a brokerage account or through some other nominee, you are the beneficial owner of the shares held in street name, and these proxy materials were forwarded to you from the broker, trustee or nominee, together with a voting instruction card. As the beneficial owner, you have the right to direct your broker, trustee, or nominee how to vote your shares by proxy. Although you are invited to attend the annual meeting, you may not vote these shares in person unless you obtain a legal proxy from the broker, trustee, or nominee.

Benefit Plans

If you hold Company stock in the Company’s Stock Bonus Plan and/or 401(k) Plan, you will receive a voting instruction form in a separate mailing. You will need to complete and return the voting instruction form to vote these shares (voting in person at the Annual Meeting or by Internet are not available). The Company must receive your completed voting instruction form by April 27, 2009; otherwise, the plan trustees will vote the shares credited to your account according to the recommendations of their respective investment committees.

How do I submit my vote?

You may vote your shares (i) by Internet at www.eproxy.com/leg, (ii) by signing and returning the proxy or voting instruction card, or (iii) in person at the meeting (except shares held in the Company’s Stock Bonus Plan or 401(k) Plan must be voted by returning a voting instruction form as described above). If you vote by Internet, you do not need to return your proxy or voting instruction card, but you will need to have it in hand when you access the voting website. Specific voting instructions are found on the proxy card or voting instruction card included with this Proxy Statement.

Can I change my vote?

If you are a shareholder of record, you may change your vote or revoke your proxy any time before the annual meeting by (i) submitting a valid, later-dated proxy, (ii) submitting a valid, subsequent vote by the Internet, (iii) notifying the Company’s Secretary that you have revoked your proxy, or (iv) completing a written ballot at the annual meeting.

If you hold shares as the beneficial owner, you may change your vote (i) by submitting new voting instructions to your broker, trustee, or other nominee or (ii) by voting in person at the annual meeting if you have obtained a legal proxy from your broker, trustee, or nominee.

If you hold shares in Company benefit plans, you can revoke your vote instructions by delivering a valid, later-dated voting instruction form prior to the deadline specified in the voting instructions.

3

Table of Contents

How many votes are needed to conduct business at the annual meeting?

A majority of the outstanding shares of common stock entitled to vote must be present at the annual meeting, or represented by proxy, in order to meet the quorum requirement to transact business. Both abstentions and broker non-votes (described below) are counted in determining a quorum. If a quorum is not present, the annual meeting will be adjourned for no more than 90 days to reach a quorum.

What vote is required to elect a director?

A director nominee must receive the affirmative vote of a majority of those shares present (either in person or by proxy) and entitled to vote.

As required by our Corporate Governance Guidelines, each nominee has submitted a contingent resignation to the Nominating & Corporate Governance Committee in order to be nominated for election as a director. If a nominee fails to receive a majority of the votes cast in the director election, the Committee will make a recommendation to the Board of Directors whether to accept or reject the director’s resignation and whether any other action should be taken. If a director’s resignation is not accepted, that director will continue to serve until the Company’s next annual meeting and his or her successor is duly elected and qualified. If the Board accepts the director’s resignation, it may, in its sole discretion, either fill the resulting vacancy or decrease the size of the Board to eliminate the vacancy.

What vote is required to approve the other proposals?

The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote is required for ratification of the appointment of PwC as Leggett’s independent registered public accounting firm, for approval of the 2009 Key Officers Incentive Plan, and for the shareholder proposal.

What is the effect of an “abstention” vote on the election of directors and other proposals?

A share voted “abstain” with respect to any proposal is considered as present and entitled to vote with respect to that proposal. Because each of the proposals requires a majority vote in order to pass, an abstention will have the effect of a vote against the proposal.

What is the effect of a “broker non-vote”?

If you hold shares in street name through a broker or other nominee and do not vote your shares or provide voting instructions, your broker may vote for you on “routine” proposals but not on “non-routine” proposals. The election of directors, the ratification of PwC as the Company’s auditor, and the approval of the 2009 Key Officers Incentive Plan are routine, but the shareholder proposal is non-routine. Therefore, if you do not vote on the shareholder proposal or provide voting instructions, your broker will not be allowed to vote your shares—this will result in a broker non-vote. Broker non-votes are not counted as shares present and entitled to vote so they will not affect the outcome of the vote.

Who pays the cost of soliciting votes at the annual meeting?

Leggett is making this solicitation and will pay the full cost of preparing, printing, assembling, and mailing these proxy materials. Upon request, we will also reimburse brokers and other nominees for forwarding proxy and solicitation materials to shareholders. If you choose to access proxy materials or vote by Internet, you are responsible for any Internet access charges you may incur.

We have hired Georgeson Inc. to assist in the solicitation of proxies by mail, telephone, in person, or otherwise. Georgeson’s fees are expected to be $10,000 plus expenses. If necessary to assure sufficient representation at the meeting, Company employees, at no additional compensation, may request the return of proxies.

4

Table of Contents

Where can I find the voting results of the annual meeting?

We will announce preliminary voting results at the annual meeting and issue a press release immediately after the meeting. We will publish the final vote count in our quarterly report on Form 10-Q for the second quarter of 2009.

What should I do if I receive more than one set of proxy materials?

You may receive multiple sets of proxy materials if you hold shares in more than one brokerage account or if you are a shareholder of record and have shares registered in more than one name. Please vote the shares on each proxy card or voting instruction card you receive.

We have adopted a procedure known as “householding” which allows us, unless a shareholder withholds consent, to send one Proxy Statement and Annual Report to multiple shareholders sharing the same address. Each shareholder at a given address will receive a separate proxy card. If you currently receive multiple sets of proxy materials and wish to have your accounts householded, or if you no longer want to participate in householding and wish to revoke your consent, call Wells Fargo Shareowner Services at 877-602-7615 or send written instructions to Wells Fargo Shareowner Services, Attn: Leggett & Platt, Incorporated, P.O. Box 64854, St. Paul, MN 55164-0854. You will need to provide Leggett’s Company number (203) and your 10-digit Wells Fargo account number which is printed at the bottom of your proxy card.

Many brokerage firms practice householding as well. If you have a householding request for your brokerage account, please contact your broker.

How may I obtain another set of proxy materials?

If you received only one set of proxy materials for multiple shareholders of record and would like us to send you another set this year, please call 800-888-4569 or write to Leggett & Platt, Incorporated, Attn: Investor Relations, No. 1 Leggett Road, Carthage, MO 64836. You can also access a complete set of proxy materials—the Notice of Meeting, Proxy Statement, and Annual Report to Shareholders including Form 10-K—online at www.leggett.com/proxy/2009/default.asp. To ensure that you receive multiple copies in the future, please contact Wells Fargo at the number or address in the preceding answer to withhold your consent for householding.

What is the deadline to propose actions for next year’s annual meeting or to nominate a director?

Shareholders may propose actions for consideration at future annual meetings either by presenting them for inclusion in the Company’s Proxy Statement or by soliciting votes independent of our Proxy Statement. To be properly brought before the meeting, all shareholder actions must comply with our bylaws, as well as SEC requirements under Regulation 14A. Leggett’s bylaws are posted on our website at www.leggett-search.com/governance. Notices specified for the types of shareholder actions set forth below must be addressed to Leggett & Platt, Incorporated, Attn: Corporate Secretary, No. 1 Leggett Road, Carthage, MO 64836.

Shareholder Proposal Included in Proxy Statement

If you intend to present a proposal at the 2010 annual meeting, the SEC requires that the Corporate Secretary receive the proposal at the address given above by November 26, 2009 for possible inclusion in the Proxy Statement. We will decide whether to include a proposal in the Proxy Statement in accordance with SEC rules governing the solicitation of proxies.

5

Table of Contents

Shareholder Proposal Not Included in Proxy Statement

If you intend to present a proposal at the 2010 annual meeting by soliciting votes independent of the Company’s Proxy Statement, Section 1.2 of our bylaws requires that the Company receive timely notice of the proposal—no earlier than January 7, 2010 and no later than February 6, 2010. This notice must include a description of the proposed business, your name and address, the number of shares you hold, any of your material interests in the proposal, and other matters specified in the bylaws. The nature of the business also must be appropriate for shareholder action under applicable law.

The bylaw requirements also apply in determining whether notice is timely under SEC rules relating to the exercise of discretionary voting authority.

Director Nominee Included in Proxy Statement

If you wish to recommend a director candidate to the Nominating & Corporate Governance Committee for possible inclusion in the Proxy Statement, please see the requirements described under Consideration of Director Nominees on page 9.

Director Nominee Not Included in Proxy Statement

If you intend to nominate a director candidate for election outside of the Company’s nomination process, our bylaws require that the Company receive timely notice of the nomination—no earlier than January 7, 2010 and no later than February 6, 2010. This notice must include the information specified in Section 2.2 of the bylaws, including your name and address, the number of shares you hold, and the name, address and occupation of each proposed nominee.

CORPORATE GOVERNANCE AND BOARD MATTERS

Corporate Governance

Leggett has a long-standing commitment to sound corporate governance principles and practices. The Board has adopted Corporate Governance Guidelines that establish the roles and responsibilities of the Board and Company management. The Board has also adopted a Code of Business Conduct and Ethics applicable to all Company employees, officers and directors, as well as a separate Financial Code of Ethics applicable to the Company’s CEO, CFO, principal accounting officer and corporate controller. These documents are posted on our website at www.leggett-search.com/governance and are available in print form to any shareholder who requests them.

Director Independence

The Board reviews director independence annually and upon learning of any change in circumstances during the year that may affect a director’s independence. The Company has adopted Categorical Standards for Director Independence (the “Categorical Standards”) that meet, and in some respects exceed, the NYSE listing standards. The Categorical Standards are attached as Appendix A and posted on our website at www.leggett-search.com/governance. A director who meets all the Categorical Standards will be presumed to be independent.

While the Categorical Standards help the Board to determine director independence, they are not the exclusive measure for doing so. The Board also reviews the relevant facts and circumstances of any relationships between the Company and its directors during the independence assessment. When confirming director Joseph McClanathan’s independence, the Board considered Company purchases from and sales to Mr. McClanathan’s employer and found the transactions to be on arms-length terms and the amounts to be well below the threshold provided in the Categorical Standards.

6

Table of Contents

Based on its review, the Board has determined that all of its current non-management directors are independent. Non-management directors Harry M. Cornell, Jr. and Felix E. Wright, both former CEOs of the Company, retired from the Board in May 2008. (See the table below for a complete list of our independent directors.) The Board found no business or other relationship involving an independent director and the Company that violated the Categorical Standards or undermined independence.

Independent Board Chair

Richard Fisher, a non-management director of the Company, was elected by the Board of Directors in 2008 to serve as the independent Board Chair. In accordance with our Corporate Governance Guidelines, non-management directors regularly hold executive sessions without management present. At least one executive session per year is attended by only independent, non-management directors. Mr. Fisher presides over these meetings of the non-management directors.

Shareholders and other interested parties may e-mail Mr. Fisher at boardchair@leggett.com. They can also write to Leggett & Platt Board Chair, P.O. Box 637, Carthage, MO 64836. The Corporate Secretary’s office reviews this correspondence and periodically sends Mr. Fisher all communications except items unrelated to Board functions (for example, advertisements and junk mail). In his discretion, Mr. Fisher may forward communications to the full Board or to any of the other independent directors for further consideration.

Board and Committee Composition and Meetings

The Board held five meetings in 2008, and its committees met the number of times listed in the table below. All directors attended at least 75% of the Board meetings and their respective committee meetings. Directors are expected to attend the Company’s annual meeting of shareholders, and all of them attended the 2008 annual meeting.

The Board has a standing Audit Committee, Compensation Committee, Nominating & Corporate Governance Committee and Executive Committee. Except for the Executive Committee, comprised of Richard Fisher (Chair), David Haffner and Maurice Purnell, each committee consists entirely of independent directors and operates under a written charter adopted by the Board. The Audit, Compensation and Nominating & Corporate Governance Committee charters are posted on our website at www.leggett-search.com/governance and are available in print form to any shareholder who requests them.

7

Table of Contents

Audit Committee

All Audit Committee members meet the higher independence standard for audit committee service under NYSE and SEC rules and are financially literate, as defined by NYSE rules. Five members—Raymond Bentele, Richard Fisher, Joseph McClanathan, Judy Odom, and Phoebe Wood—possess the training, skills, and experience to meet the SEC’s definition of an audit committee “financial expert.” None of the members serves on the audit committee of more than three public companies.

The Audit Committee assists the Board in the oversight of: (i) the independent registered public accounting firm’s qualifications, independence, appointment, compensation, retention, and performance, (ii) the Company’s internal controls over financial reporting, (iii) the guidelines and policies to govern risk assessment and management, (iv) the performance of the Company’s internal audit function, (v) the integrity of the Company’s financial statements and its external financial reporting, and (vi) the Company’s legal and regulatory compliance.

We have posted on our website and corporate intranet a procedure for employees and others to confidentially inform the Audit Committee of any questionable accounting, internal control, or auditing matters. The Vice President of Internal Audit reports directly to the Audit Committee and is responsible for receiving, processing, and maintaining records of the reports. The Chair of the Audit Committee reviews all complaints and accompanying investigations and may request the full Committee’s review of a complaint to determine appropriate actions.

Compensation Committee

The Compensation Committee assists management and the Board in developing and maintaining the Company’s policies relating to (i) CEO, executive officer, and director compensation and (ii) Company equity and incentive compensation plans that are subject to Board approval. The Committee strives for policies that will (i) support the Company’s business objectives, (ii) attract and retain high quality leadership, and (iii) link compensation with business objectives and performance.

The Committee may delegate its duties and responsibilities to one or more Committee members or Company officers, as it deems appropriate, but may not delegate authority to non-members for any action involving executive officers.

The Committee sets the compensation for the Company’s executive officers. In connection with this responsibility, the Committee conducts a comprehensive review of executive officer compensation each year in March, before approving any salary increases. The Compensation Discussion & Analysis section on page 28 includes details of the Committee’s 2008 review.

The Committee also periodically reviews cash and equity compensation for directors and recommends any director compensation changes to the full Board.

Company managers in the Human Resources and Corporate Affairs departments provide data needed for compensation decisions at the Committee’s request. The Committee may hire outside compensation consultants as needed for the proper discharge of its duties, but it did not use any outside consulting services in connection with executive or director compensation decisions in 2008.

Compensation Committee Interlocks and Insider Participation

No Compensation Committee member had an interlocking relationship as described in Item 407(e)(4) of Regulation S-K.

Nominating & Corporate Governance Committee

The Nominating & Corporate Governance Committee (i) assists the Board in developing and maintaining the Company’s corporate governance principles, policies, and procedures, (ii) identifies qualified candidates for

8

Table of Contents

Board membership and recommends director nominees to the Board, (iii) reviews director independence and related person transactions, and (iv) reviews and makes recommendations to the Board regarding the Board’s size, composition, and policies.

Consideration of Director Nominees

The Nominating & Corporate Governance Committee (the “Committee”) is responsible for identifying and evaluating qualified candidates for election to the Board of Directors. Following its evaluation, the Committee recommends to the full Board a slate of director candidates for inclusion in the Company’s Proxy Statement and proxy card. This procedure is posted on the Company’s website at www.leggett-search.com/governance.

In the case of incumbent directors, the Committee reviews each director’s overall service during his or her current term, including the number of meetings attended, level of participation, quality of performance, and any transactions between the director and the Company. In the case of new director candidates, the Committee first determines whether the nominee must be independent under NYSE rules, then identifies any special needs of the current Board. The Committee will consider individuals recommended by Board members, Company management, shareholders and, if it deems appropriate, a professional search firm. In 2008 and 2009, the Company retained DHR International to assist with identifying and evaluating potential director candidates. DHR International also arranged interviews between the candidates and the Board of Directors.

The Board of Directors may also consider candidates to fill a vacancy in the Board outside of the annual shareholder meeting process. The Committee will use the same criteria as are used to evaluate a director nominee to be elected by shareholders. In the event of a vacancy to be filled by the Board, the Committee will recommend one or more candidates for election and proxies will not be solicited.

The Committee seeks to identify and recruit the best available candidates. Qualified candidates will be considered without regard to race, color, religion, sex, ancestry, national origin or disability. The Committee believes director candidates should have the following minimum qualifications:

In addition to the minimum qualifications described above, the Committee may also consider the following factors in evaluating candidates for recommendation to the Board:

9

Table of Contents

Following the Committee’s initial review of a candidate’s qualifications, one or more Committee members will interview the candidate. The Committee may arrange subsequent interviews with the Board Chair and/or members of the Company’s management. The Committee does not intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth above, for candidates recommended by a shareholder. Shareholders who wish to recommend candidates for the Committee’s consideration must submit a written recommendation to the Secretary of the Company at No. 1 Leggett Road, Carthage, MO 64836. Recommendations must be sent by certified or registered mail and received by December 15th for consideration at the following year’s annual meeting of shareholders. Recommendations must include the following:

The Corporate Secretary will promptly forward these materials to the Committee Chair and the Board Chair. The Committee may contact recommended candidates to request additional information necessary for its evaluation or for disclosure under applicable SEC rules.

Separate procedures apply if a shareholder wishes to nominate a director candidate for election at a meeting of shareholders. Those procedures, contained in our bylaws, are discussed in the Question and Answer section of this Proxy Statement on page 6.

Transactions with Related Persons

According to the Company’s Corporate Governance Guidelines, the Nominating & Corporate Governance Committee reviews and approves or ratifies transactions with related persons unless the transaction concerns compensation, in which case the duty falls to the Compensation Committee.

A “Related Person” is: (i) a person who has served as an executive officer, director or director nominee of the Company at any time since the beginning of the last fiscal year; (ii) a shareholder beneficially owning in excess of 5% of any class of the Company’s voting securities; (iii) an immediate family member of any person described in clause (i) or (ii); or (iv) an entity in which any of the foregoing persons has, or will have, a direct or indirect material interest.

10

Table of Contents

An “Interested Transaction” is any transaction, arrangement or relationship, or series of similar transactions, (i) involving an amount that exceeds or is expected to exceed $120,000 in the aggregate; (ii) in which the Company or its subsidiaries was, is, or will be a participant; (iii) and in which a Related Person had, has, or will have a direct or indirect material interest; and (iv) the transaction, arrangement or relationship is not specifically excluded from the disclosure requirements of Item 404(a) of Regulation S-K.

The Company’s executive officers and directors are expected to notify the Company’s Corporate Secretary or Deputy Corporate Secretary of any current or proposed transaction that may be an Interested Transaction. The Corporate Secretary will determine if it is an Interested Transaction and, if so, will include it for consideration at the next meeting of the appropriate Committee.

Approval should be obtained in advance of an Interested Transaction whenever practicable. If it becomes necessary to approve an Interested Transaction between meetings, the Chair of the Committee is authorized to act on behalf of the Committee. The Chair will provide a report on the matter to the full Committee at its next meeting.

Although the appropriate Committee may review any transaction with a Related Person, the following Interested Transactions are specifically pre-approved, and no further action need be taken:

11

Table of Contents

Each of the following transactions were approved in accordance with the foregoing procedures:

Prior to Leggett’s divestiture of the Aluminum Segment on July 16, 2008, Daniel R. Hebert was an executive officer of the Company. Following the divestiture, Mr. Hebert continued his employment with Pace Industries, Inc. (now serving as its President), and Leggett entered into certain supply and transition services agreements with Mr. Hebert’s employer.

In 2008 and through the 2009 Record Date, two of our officers purchased shares of Leggett common stock from the Company’s treasury shares, as set out below. Through the third quarter of 2008, the price per share in each transaction was the average price the Company paid for shares it repurchased on the open market that day. Beginning in the fourth quarter of 2008, the price per share in each transaction was the closing price on the day of sale. The executives also paid an administrative fee of two cents per share, which reimburses the Company for the average commission paid for its open market share repurchases.

We buy shares of our common stock from our employees from time to time, and, in 2008, we purchased shares from two of our officers. All employees, including the officers listed below, pay a $25 administrative fee for each transaction. If the Company agrees to purchase stock before noon, the purchase price is the closing stock price on the prior business day; if the agreement is made after noon, the purchase price is the closing stock price on the day of purchase.

The Company’s previous employment agreement with Harry M. Cornell, Jr., a director of the Company for part of 2008, entitles him to certain post-retirement benefits, including life insurance coverage and certain health benefits. The Company paid $22,294 in 2008 for Mr. Cornell’s Medicare, supplemental insurance, and

12

Table of Contents

prescription drug expenses. Of that amount, $17,020 was paid as a reimbursement for Medicare and prescription drug expenses from 2007. Upon retirement, Mr. Cornell also became entitled to supplemental pension payments equal to 65% of the average of his highest consecutive five-year earnings, minus an offset for social security benefits, for the longer of 15 years or life. These payments totaled $755,060 in 2008. As approved by the Compensation Committee, the Company also provides Mr. Cornell with office space and secretarial services, and he reimburses the Company for the actual costs of these benefits. In 2008, he reimbursed the Company $77,806 for secretarial services (salary and benefits) and $15,030 for office space (based on the rental cost for comparable facilities in the area).

The Company employs certain relatives of its directors and executive officers, including those listed below for Mr. Cornell and Mr. Wright who retired from the Board in May 2008. The total compensation of the employees listed below was calculated in a manner consistent with that of the Summary Compensation Table on page 38 and includes base salary, annual cash incentive, equity awards, and certain other compensation from Company benefit plans.

Director Compensation

The Compensation Committee reviews director compensation every year and recommends any changes to the full Board for consideration at the May Board meeting. The Committee considers national survey data and trends but does not target director compensation to any specific percentage of the median.

Our standard annual compensation package for non-employee directors consists of a grant of restricted stock with a grant date market value of $100,000 on the date of each annual meeting of shareholders and the following cash compensation:

Prior to May 2008, we paid employee directors $3,000 per year, in quarterly installments, for their service as directors. For Mr. Haffner and Mr. Glassman, this director compensation is reported in the All Other Compensation column of the Summary Compensation Table on page 38. The Board eliminated employee director compensation in 2008.

13

Table of Contents

Compensation earned by directors in 2008 is set forth in the table below. Directors may elect to defer their cash compensation into stock options or stock units under the Company’s Deferred Compensation Program, described on page 48. The Company also pays for all travel expenses the directors incur to attend Board meetings.

Mr. Cornell and Mr. Wright, both former Chief Executive Officers of the Company, did not stand for re-election as directors at the May 2008 annual meeting of shareholders. Their compensation reflects a partial year of service.

Mr. Cornell was a non-employee director, and all the compensation reported in the table below was earned in connection with his service as a director. He receives other post-retirement benefits under the terms of his previous employment agreement with the Company. These are described in the Transactions with Related Persons section on page 12.

Mr. Wright was an employee director until May. He was not an executive officer at any time in 2008, but he served as an employee consultant throughout 2008. Of the compensation reported for Mr. Wright in the table below, only $1,500 relates to his services as a director. The remaining amounts relate to services as an employee. Compensation amounts reported for Mr. Wright are described in footnote 5.

Director Compensation in 2008

14

Table of Contents

The directors held outstanding stock options as of December 31, 2008 as described below. Options that were granted in lieu of cash compensation under our Deferred Compensation Program are listed separately in the DC Options column. Mr. Wright holds 1,302,203 options (563,665 general options and 738,538 Deferred Compensation Options) that relate to his prior service as an employee.

Five directors currently have Deferred Compensation Program stock unit accounts. Details of the units they acquired in 2008 and their ending account balances are set forth below. Stock units are converted to shares of common stock upon distribution.

15

Table of Contents

Mr. Wright and the Company entered into an employment agreement in 1999 in connection with his promotion to CEO. The agreement, as amended for subsequent terms, covered his term as CEO ending in 2006 and entitled Mr. Wright to a 2-year consulting term, which began June 1, 2007. During the first and second years of the consulting term, the consulting payments were equal to 75% and 60%, respectively, of the average of his highest consecutive five-year earnings (“Average Earnings”), where “earnings” includes only salary and incentive award. His Average Earnings were $1,164,154 at December 31, 2007, making his consulting payments $873,116 for Year 1 and $698,492 for Year 2. The consulting term is not renewable. Mr. Wright’s obligation to maintain the confidentiality of Company information remains in effect after expiration of the term of the agreement.

Mr. Wright’s employment agreement also provided for a supplemental pension in addition to the pension he is entitled to under the Retirement Plan. The supplemental pension begins upon the later of termination of employment or the expiration of the consulting term. The supplemental pension will be for life or 15 years, whichever is longer. Mr. Wright’s annual pension payments are 55% of Average Earnings, making his annual payment $640,285.

While he receives supplemental pension payments, the Company will continue to provide health insurance and a Medicare supplement to Mr. Wright and his dependents after his retirement or disability for the longer of 15 years or life, as well as life insurance coverage equal to the coverage the Company provided to him immediately prior to termination. In addition, the Company is obligated to reimburse Mr. Wright for any income or other taxes he incurs on these benefits.

16

Table of Contents

PROPOSALS TO BE VOTED ON AT THE ANNUAL MEETING

PROPOSAL ONE

Election of Directors

At the annual meeting, nine directors will be elected to hold office until the next annual meeting of shareholders or until their successors are elected and qualified. All the director nominees have been previously elected by our shareholders. If any nominee named below is unable to serve as a director (an event the Board does not anticipate), the proxy will be voted for a substitute nominee, if any, designated by the Board. Our employment agreements with Mr. Haffner and Mr. Glassman provide that they may terminate their agreements if not re-elected as directors (see page 49 for a description of the agreements).

Ralph W. Clark, age 68, was a Vice President of International Business Machines Corporation (IBM) from 1988 until 1994. He also served as Chairman of Frontec AMT Inc., a software company, until his retirement in 1998. Mr. Clark was first elected as a director of the Company in 2000.

R. Ted Enloe, III, age 70, has been Managing General Partner of Balquita Partners, Ltd., a family securities and real estate investment partnership, since 1996. He also served as President and Chief Executive Officer of Optisoft, Inc., a manufacturer of intelligent traffic systems, from 2003 to 2005. Mr. Enloe serves as a director of Silicon Laboratories Inc., a designer of mixed-signal integrated circuits, and Live Nation, Inc., a venue operator, promoter and producer of live entertainment events. He was first elected as a director of the Company in 1969.

Richard T. Fisher, age 70, has been Senior Managing Director, Midwest Division of Oppenheimer & Co., an investment banking firm, since 2002. He served as Managing Director of CIBC World Markets Corp., an investment banking firm, from 1990 to 2002. Mr. Fisher was first elected as a director of the Company in 1972 and has served as the independent Board Chair since 2008.

Karl G. Glassman, age 50, was appointed Chief Operating Officer of the Company in 2006 and Executive Vice President in 2002. He previously served the Company as President of the Residential Furnishings Segment from 1999 to 2006, Senior Vice President from 1999 to 2002, and President of Bedding Components from 1996 through 1998. Mr. Glassman has served the Company in various capacities since 1982. He was first elected as a director of the Company in 2002.

David S. Haffner, age 56, was appointed Chief Executive Officer of the Company in 2006 and has served as President of the Company since 2002. He previously served as the Company’s Chief Operating Officer from 1999 to 2006, Executive Vice President from 1995 to 2002, and in other capacities since 1983. Mr. Haffner serves as a director of Bemis Company, Inc., a manufacturer of flexible packaging and pressure sensitive materials. Mr. Haffner was first elected as a director of the Company in 1995.

Joseph W. McClanathan, age 56, has served as President and Chief Executive Officer of the Energizer Household Products Division of Energizer Holdings, Inc., a manufacturer of portable power solutions, since November 2007. Prior to his current position, he served Energizer as President and Chief Executive Officer of the Energizer Battery Division from 2004 to 2007, as President–North America from 2002 to 2004, and as Vice President–North America from 2000 to 2002. He was first elected as a director of the Company in 2005.

Judy C. Odom, age 56, served as Chairman of the Board and Chief Executive Officer of Software Spectrum, Inc., a computer software company, until 2002. She is a director of Harte Hanks Inc., a direct marketing company. Ms. Odom was first elected as a director of the Company in 2002.

Maurice E. Purnell, Jr., age 69, has been Of Counsel to the law firm of Locke Lord Bissell & Liddell LLP, or its predecessor firm, since 2002, where he had been a partner since 1972. Mr. Purnell was first elected as a director of the Company in 1988.

17

Table of Contents

Phoebe A. Wood, age 55, served as Vice Chairman, Chief Financial Officer and in other capacities at Brown-Forman Corporation, a diversified consumer products manufacturer, from 2001 until her retirement in 2008. Ms. Wood previously held various positions at Atlantic Richfield Company, an oil and gas company, from 1976 to 2000. Ms. Wood was first elected as a director of the Company in 2005.

PROPOSAL TWO

Ratification of Selection of Independent Registered Public Accounting Firm

The Audit Committee has selected PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2009. PwC (or its predecessor firm) has been our independent registered public accounting firm since 1991.

We are asking our shareholders to ratify the Audit Committee’s selection of PwC as our independent registered public accounting firm. Although ratification is not required by the Company’s bylaws or otherwise, the Board is submitting the selection of PwC to our shareholders for ratification as a matter of good corporate practice. If our shareholders fail to ratify the selection, it will be considered a direction to the Audit Committee to consider a different firm. Even if this selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time during the year if it determines that such a change is in the best interest of the Company and our shareholders.

PwC representatives are expected to be present at the annual meeting. They will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate shareholder questions.

Audit and Non-Audit Fees

The fees billed or expected to be billed by PwC for professional services rendered in fiscal years 2008 and 2007 are shown below.

18

Table of Contents

The Audit Committee has determined that the provision of these approved non-audit services by PwC is compatible with maintaining PwC’s independence.

Pre-Approval Procedures for Audit and Non-Audit Services

The Audit Committee is responsible for the appointment and compensation of the Company’s independent registered public accounting firm. To fulfill this responsibility, the Audit Committee has established a procedure for pre-approving the services performed by the Company’s auditors. All services provided by PwC in 2008 were approved in accordance with the adopted procedures. There were no services provided or fees paid in 2008 for which the pre-approval requirement was waived.

The procedure provides standing pre-approval for:

Any other audit, audit-related, or tax services provided by the Company’s auditors require specific Audit Committee pre-approval. The Audit Committee must also specifically approve in advance all permissible non-audit internal control related services to be performed by the Company’s auditors. Management provides quarterly reports to the Audit Committee concerning any fees paid to the auditors for their services.

Audit Committee Report

The Audit Committee is composed of six non-management directors who are independent as required by SEC and NYSE rules. The Audit Committee operates under a written charter adopted by the Board which is posted on the Company’s website at www.leggett-search.com/governance.

Management is responsible for the Company’s financial statements and financial reporting process, including the system of internal controls. PwC, our independent registered public accounting firm is responsible for expressing an opinion on the conformity of the audited consolidated financial statements with generally accepted accounting principles. The Audit Committee is responsible for monitoring, overseeing and evaluating these processes, providing recommendations to the Board regarding the independence of and risk assessment procedures used by our independent registered public accounting firm, selecting and retaining our independent registered public accounting firm, and overseeing compliance with various laws and regulations.

19

Table of Contents

At its meetings, the Audit Committee reviewed and discussed the Company’s audited financial statements with management and PwC. The Audit Committee also discussed with PwC all items required by the Statement on Auditing Standards No. 61, as amended.

The Audit Committee received the written disclosures and letter from PwC required by applicable requirements of the Public Company Accounting Oversight Board regarding PwC’s communications with the Audit Committee concerning independence and has discussed the independent registered public accounting firm independence with them.

The Audit Committee has relied on management’s representation that the financial statements have been prepared in conformity with generally accepted accounting principles and on the opinion of PwC included in their report on the Company’s financial statements.

Based on the review and discussions with management and PwC referred to above, the Audit Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s 2008 Annual Report on Form 10-K.

Raymond F. Bentele

Ralph W. Clark

Richard T. Fisher

Joseph W. McClanathan

Judy C. Odom (Chair)

Phoebe A. Wood

PROPOSAL THREE

Approval of the 2009 Key Officers Incentive Plan

Section 162(m) of the Internal Revenue Code limits the amount of compensation that may be deducted by the Company in any year to those persons named in the Summary Compensation Table on page 38 (not including the Chief Financial Officer). However, certain “performance-based” compensation is not subject to this deduction limit. Compensation is “performance-based” if payment is conditioned on the achievement of performance goals set by a committee of outside directors. The Company’s shareholders must approve the material terms of such performance goals.

In 2004, our shareholders approved the 2004 Key Officers Incentive Plan (the “2004 Incentive Plan”). Compensation paid to our most highly compensated officers under the 2004 Incentive Plan for the past three years is shown in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 38. Plans providing benefits intended to qualify as performance-based compensation under Section 162(m) of the Code must be approved by shareholders every five years.

Subject to shareholder approval, the Compensation Committee (the “Committee”) adopted the 2009 Key Officers Incentive Plan (the “2009 Incentive Plan” or the “Plan”) to replace the 2004 Incentive Plan. The 2009 Incentive Plan broadens the list of potential performance objectives and requires repayment of awards paid in error if the Company is required to restate previously reported financial results. If approved by shareholders, the 2009 Incentive Plan will become effective as of January 1, 2009. If not approved by shareholders, no performance-based awards will be paid under either the 2004 or the 2009 Incentive Plans.

Set forth below is a description of the key features of the 2009 Incentive Plan. This description is subject to and qualified by the full text of the Plan attached as Appendix B, which is incorporated by reference herein.

20

Table of Contents

The purpose of the 2009 Incentive Plan is to attract, motivate and retain participants who make significant contributions to the Company’s success by allowing them to share in that success. The Plan is designed to permit the Company to maximize tax deductions for performance-based compensation paid or awarded to participants under the Plan. The Company’s executive officers (currently 11 persons) are eligible for participation in the Plan.

The Plan is administered by the Committee, which has sole responsibility for: selecting participants; setting target percentages; establishing performance objectives, performance periods and award formulas; and determining awards.

The Plan provides for the payment of cash awards to participants based on the attainment of certain performance objectives. Performance objectives may differ for each participant and may be based on corporate financial measures or individual measures. Performance objectives may be different for different Participants and may be based on corporate financial measures or individual measures. Performance Objectives may include, without limitation, revenue, operating income, return on equity, return on assets, cash flow, earnings, total shareholder return, share price performance, and any of the other performance measures listed in Section 2.2 of the Plan (see page B-2).

The Committee will establish the award formula and participants’ target percentages no later than 90 days after the beginning of the year or before 25% of a performance period has elapsed. The Committee may reduce a participant’s award as calculated under the formula by up to 20% but may not increase the award. No participant who is subject to Section 162(m) of the Code will be entitled to an additional award based on another participant forfeiting all or any portion of the discretionary payment. A participant’s award may not exceed two times the participant’s base salary. Participants may elect to defer their awards under the Company’s Deferred Compensation Program.

The Committee has not yet approved the formula for determining awards for 2009 performance under the Plan. Accordingly, 2009 incentive awards under the Plan are not determinable at this time. The table below sets forth the amounts that were payable for 2008 performance under the 2004 Key Officers Incentive Plan (which is substantially the same as the 2009 Key Officers Incentive Plan), to each of the individuals and groups listed below.

A description of the 2008 awards, performance measures and payout decisions is contained in the Annual Incentive Awards section of the Compensation Discussion and Analysis beginning on page 31.

21

Table of Contents

The Company intends to file a Current Report on Form 8-K in late March after the Committee has approved the award formula for 2009 performance. Although not final, we expect the Committee to set the following performance measures and relative weighting of each. The individual performance goals will likely be established separately from this Plan. We further expect that the Committee will set the maximum payout at 150%.

The Committee may approve certain adjustments to the GAAP definition of these measures. Any such adjustments will be explained in the Form 8-K.

If, within 24 months after an award is paid, the Company is required to restate previously reported financial results, the Committee will require all participants to repay any amounts paid in excess of the amounts that would have been paid based on the restated financial results. In addition, the Committee may require repayment of the entire award from those participants the Committee determines, in its discretion, to be personally responsible for gross misconduct or fraud that caused the need for the restatement.

The Company has a separate incentive plan for other key management employees, the Key Management Incentive Plan. The terms of the Key Management Incentive Plan are substantially the same as those of the 2009 Incentive Plan which governs our Section 16 Officers.

The Committee may amend or terminate the Plan at any time, provided that no amendment will be made without shareholder approval if such approval is required under applicable law or for bonuses to qualify as “performance-based compensation.”

22

Table of Contents

PROPOSAL FOUR

Shareholder Proposal Requesting the Addition of Sexual Orientation and

Gender Identity to the Company’s Written Non-Discrimination Policy

The Office of the Comptroller of New York City, as custodian and trustee of the New York City Employees’ Retirement System, the New York City Teachers’ Retirement System, the New York City Police Pension Fund and the New York City Fire Department Pension Fund, and as custodian of the New York City Board of Education Retirement System, has notified us of its intent to present the following proposal for consideration at the annual meeting. The addresses and number of shares held by such shareholders are available from the Company upon request to its Secretary.

The proposed resolution and supporting shareholder statement are followed by a statement of opposition and a recommendation from the Company’s Board. The Company accepts no responsibility for the proposed shareholder resolution and supporting statement.

Proposed Shareholder Resolution and Statement

Whereas: Leggett & Platt, Inc., does not explicitly prohibit discrimination based on sexual orientation and gender identity in its written employment policy;

Over 88% of the Fortune 500 companies have adopted written nondiscrimination policies prohibiting harassment and discrimination on the basis of sexual orientation, as have more than 98% of Fortune 100 companies, according to the Human Rights Campaign; over 30% now prohibit discrimination based on gender identity;

We believe that corporations that prohibit discrimination on the basis of sexual orientation and gender identity have a competitive advantage in recruiting and retaining employees from the widest talent pool;

According to a June, 2008 survey by Harris Interactive and Witeck-Combs, 65% of gay and lesbian workers in the United States reported facing some form of job discrimination related to sexual orientation; an earlier survey found that almost one out of every 10 gay or lesbian adults also reported that they had been fired or dismissed unfairly from a previous job, or pressured to quit a job because of their sexual orientation;

Twenty states, the District of Columbia and more than 160 cities and counties, have laws prohibiting employment discrimination based on sexual orientation; 12 states and the District of Columbia have laws prohibiting employment discrimination based on sexual orientation and gender identity;

Minneapolis, San Francisco, Seattle and Los Angeles have adopted legislation restricting business with companies that do not guarantee equal treatment for gay and lesbian employees;

Our company has operations in, and makes sales to, institutions in states and cities that prohibit discrimination on the basis of sexual orientation;

National public opinion polls consistently find more than three quarters of the American people support equal rights in the workplace for gay men, lesbians and bisexuals; for example, in a Gallup poll conducted in May, 2007, 89% of respondents favored equal opportunity in employment for gays and lesbians;

Resolved: The Shareholders request that Leggett & Platt, Inc. amend its written equal employment opportunity policy to explicitly prohibit discrimination based on sexual orientation and gender identity and to substantially implement the policy.

Supporting Statement: Employment discrimination on the basis of sexual orientation and gender identity diminishes employee morale and productivity. Because state and local laws are inconsistent with respect to employee discrimination, our company would benefit from a consistent, corporate-wide policy to enhance efforts

23

Table of Contents

to prevent discrimination, resolve complaints internally, and ensure a respectful and supportive atmosphere for all employees. Leggett & Platt, Inc. will enhance its competitive edge by joining the growing ranks of companies guaranteeing equal opportunity for all employees.

Company’s Statement in Opposition:

We believe the proposed resolution is unnecessary because Leggett is already an equal opportunity employer with a firm and long-standing commitment to preventing discrimination in the workplace. Leggett’s existing anti-discrimination policy states, “We are committed to equal opportunity, and strive to maintain a workplace free of discrimination based on any factors other than the skills and abilities of our applicants and employees. These principles of equal opportunity should be applied in all aspects of employment including: recruiting, hiring, promotion, training, compensation, termination and disciplinary action.”

We are committed to the highest ethical standards, which include assuring equal employment and promotional opportunities free of discrimination on any basis other than merit and performance-related qualifications. Our policies reflect our high standards, and we implement these policies in our business operations through ongoing training.

We believe our employment record supports our commitment to nondiscrimination. In a company with more than 20,000 employees, we are not aware of a single charge of discrimination based on sexual orientation or gender identity filed with any city, state or federal agency, nor has the Company received notice from any customer or supplier that its employment policies or practices jeopardize its relationship with them. In addition, for over twenty years Leggett has provided employees with access to a national hotline for anonymous reporting of discrimination or harassment in the workplace.

We believe our written policies should specifically list only those types of discrimination prohibited by federal law. This approach furthers the Company’s legal compliance efforts by highlighting categories of illegal discrimination and, thus, helps to reduce our compliance costs. We also believe the addition of sexual orientation and gender identity to the list would result in increased costs by encouraging frivolous lawsuits.

We believe singling out employees by sexual orientation or gender identity (or any other classification not mandated by federal law) would dilute our policy of prohibiting discrimination in any form and would divert attention from our primary goal of a completely non-discriminatory workplace.

We believe that adding sexual orientation to the list of prohibited forms of discrimination may lead to a more expansive agenda, including the addition of domestic partner benefits at a significant cost to the Company.

Over a two-thirds majority of Leggett’s shareholders defeated similar proposals at the Company’s 2006, 2007 and 2008 annual meetings. We believe this overwhelming rejection by shareholders sent a clear message to our Board that Leggett should oppose this unnecessary and costly addition to our nondiscrimination policy.

Discretionary Vote on Other Matters

We are not aware of any business to be acted upon at the annual meeting other than the four items described in this Proxy Statement. Your signed proxy, however, will entitle the persons named as proxy holders to vote in their discretion if another matter is properly presented at the meeting. If one of the director nominees is not available as a candidate for director, the proxy holders will vote your proxy for such other candidate as the Board may nominate.

24

Table of Contents

EXECUTIVE COMPENSATION AND RELATED MATTERS

Compensation Discussion & Analysis

This section discusses our executive compensation program and the rationale for decisions in 2008 affecting the compensation of our named executive officers or “NEOs” listed below. Total 2008 compensation for these executives is reported in the Summary Compensation Table on page 38.

The Compensation Committee, consisting of four independent directors, sets executive officer compensation. The Committee works with management and is accountable to the full Board of Directors to ensure that our executive compensation program allows us to attract and retain a superior management team dedicated to building long-term value for shareholders.

To meet this objective, the Committee targets a total compensation package that:

2008 Performance and Effect of Economic Crisis on 2009 Compensation Decisions

This Compensation Discussion & Analysis primarily addresses 2008 compensation, most of which was set early in the year. During 2008, we successfully executed major strategic objectives, including the divestiture of several underperforming or non-strategic business units. Our business outlook dramatically changed in the fourth quarter of 2008 due to the global financial crisis. In spite of the fourth quarter downturn, which pulled our total shareholder return for 2008 down to -7%, our performance ranked in the top 10% of the S&P 500 companies.

World financial markets have continued to deteriorate in 2009, making it extremely difficult to project 2009 earnings. Listed below are the executive compensation actions we have recently taken, or not taken, in response to this volatile business environment. These decisions represent our best understanding as of the date of this proxy statement and may be subject to change if future economic or business developments require different decisions in order to meet our stated compensation objectives.

25

Table of Contents

Total Compensation Package

Our executive compensation package delivers a mix of fixed and variable compensation paid in cash and equity. The primary components are:

The fixed component, base salary, is the Company’s basic agreement with its executives for compensation in exchange for services and is intended to be reasonably competitive with other companies with which we may compete for executive talent, as discussed below. To maximize the Company’s tax deduction, the Committee currently plans to keep base salaries (the only non performance-based compensation element) below the $1 million threshold set by Section 162(m) of the Internal Revenue Code, although distributions of previously deferred compensation will occasionally result in compensation that exceeds the threshold.

The variable components are intended to tie our executives’ wealth creation potential to that of shareholders and to motivate executives to perform to their highest potential. The better the Company performs, the greater the executives’ reward and vice versa.

In keeping with our objective to link compensation to Company performance, the Committee ensures that a significant percentage of the total compensation package is structured as variable, or “at risk,” compensation and is weighted toward equity. The percentage of each component relative to the total is not determined by any specific formula.

26

Table of Contents

The charts below show the fixed-to-variable and cash-to-equity ratios of average NEO compensation in 2008.

The illustrations in the charts above are not comparable to the compensation amounts reported in the Summary Compensation Table on page 38. The illustrations above include only the four primary compensation components (which comprise a high percentage of total compensation) and use a different equity valuation methodology. For this calculation, we assumed the value of equity awards to be equal to the grant date fair value of the awards, which is the value reported in the Grants of Plan-Based Awards Table on page 41. Equity values disclosed in the Summary Compensation Table reflect the expense the Company recognized during the year for all unvested equity awards, including awards granted in prior years.

The variable components reward different measures of Company performance over different time spans, as follows:

The Committee believes our compensation structure provides appropriate incentives for executives without encouraging them to take excessive risk because it:

In addition to the four primary components, executives may participate in a tax-qualified discount stock purchase plan and a 401(k) retirement plan offered to employees generally. We also offer executives two non-qualified equity-based programs, the Executive Stock Unit Program (the “ESU Program”) and the Deferred

27

Table of Contents

Compensation Program. The ESU and Deferred Compensation Programs are intended to encourage executives to convert their cash compensation into equity. The ESU Program is our primary executive retirement plan, and is payable entirely in Company stock. These programs are described in more detail on page 48. Compensation earned through participation in these programs is primarily reflected in the All Other Compensation column of the Summary Compensation Table on page 38. Because earnings vary according to the level of participation in these voluntary programs, we exclude them from our analysis of the basic annual compensation package.

The Role of Management, the Board of Directors and Outside Advisors in Compensation Decisions

The Committee has authority to engage its own outside compensation consultant as needed, but it did not do so in 2008. John Moore, Vice President of Corporate Affairs & Human Resources, works with Company personnel to provide any compensation data, research, and analysis the Committee may request. In addition to Mr. Moore, the Committee invites the Chief Executive Officer, David Haffner, to attend Committee meetings. These officers participate in discussions about executive compensation matters, but they have no vote on Committee actions. The Committee frequently meets in executive session.

The Committee decides the type and appropriate mix of compensation elements, sets the performance targets and payout schedules for incentive compensation, and decides the level of salary and incentive awards for each executive officer. The Committee meets in executive session without management present to discuss performance and set compensation levels for Mr. Haffner and Mr. Glassman. For the other executive officers, Mr. Haffner discusses with the Committee his recommendation for salary increases and equity award sizes, based on his assessment of each executive’s performance.

The Committee reports its actions to the Board at each Board meeting. The full board must review and approve certain actions, including employment and severance benefit agreements, incentive payouts, and amendments to stock plans.

The Annual Review and Use of Compensation Data

At its March meeting each year, the Committee reviews the four primary elements of the annual compensation package for executive officers: base salary, incentive bonus, stock options and PSU awards. We refer to this meeting as the Annual Review. Based on this review, the Committee approves any base salary increases and sets the incentive plan target percentage for each executive officer. Increases to base salary affect all four elements of the annual compensation package, because the variable compensation elements (incentive award, stock options and PSUs) generally are determined as a multiple of base salary. Equity award sizes are reviewed again in November, prior to the grant of stock options and PSUs on the first business day of each year.

Just prior to the Annual Review, the Committee reviews the total compensation package for the preceding year as disclosed in the proxy statement. This review includes the impact of secondary compensation elements, such as voluntary equity plans and retirement plans, as well as potential payments upon termination or change in control. Decisions about secondary and post-termination compensation elements are made at various times throughout the year as the plans or agreements giving rise to the compensation are reviewed. See page 36 for a discussion of the Committee’s 2008 review of severance benefit agreements.

In connection with its 2008 Annual Review, the Committee evaluated the following data assembled and prepared by Company personnel:

28

Table of Contents

The Committee uses this information to develop a picture of each executive’s annual compensation package in the context of past decisions, internal pay relationships and the external market.

We have not compared our compensation to that of a specific peer group of companies. Given the complexity of our markets and the diversity of our product lines, we have not identified a large enough group of companies that are enough like us to make such a comparison meaningful and accurate. Instead, for external market data, we used survey data disclosing 2007 compensation published by Watson Wyatt (“Survey Report of Top Management Compensation”) and Towers Perrin (“Comp Online—Executive Database”) (collectively, the “2008 Survey Data”). From each survey, we sought the largest sample size possible using the data of companies that most closely matched our revenues and the individual executive’s job description. From the Watson Wyatt survey, we analyzed data from all of the surveyed manufacturing companies for the CEO, CFO and COO positions. Since these positions are common at most of the survey companies, the sample size was sufficiently large—210 for the CEO position, 221 for the CFO position and 72 for the COO position. For the two Senior Vice President operating positions, we analyzed data from all of the surveyed companies except financial organizations with median revenue close to the revenue of that executive’s business unit or operations, which included 50 companies for one position and 25 for the other. From the Towers Perrin survey, we analyzed U.S. general industry data for surveyed companies with similar revenue to the company or business unit, as appropriate, resulting in sample sizes from 31 to 145. The use of multiple surveys enables us to develop a more balanced picture of the compensation market.

We use survey data to get a general sense of the competitive market. In addition, for some compensation elements, we may endeavor to set compensation levels within a general range, but we do not target a specific percentage for any element. We find base salary data the most reliable, and we generally target base salaries slightly below the market median. Incentive compensation (annual cash and long-term equity) data is more difficult to accurately compare, due to differences in methodologies and survey populations. For that reason, the Committee did not target any specific incentive compensation percentile, but found generally that our cash incentive amounts significantly lagged behind the survey data. To understand this difference, the Committee noted that Leggett’s total shareholder return (TSR) for the period covered in the 2008 Survey Data was low relative to S&P 500. The degree of the difference in compensation, however, was partly due to Leggett’s lower incentive target opportunity. Even with stronger performance, our cash incentive compensation would have been significantly lower than the 2008 Survey Data because the target opportunity was lower. The Committee decided to modestly increase incentive target percentages in connection with other changes it was making to better align the incentive bonus structure with our strategic plan. Changes to the incentive plan are discussed on page 33.

As a result of its Annual Review in March 2008, the Committee took the following actions:

29

Table of Contents

Compensation Differences among Executives and the Role of Individual Performance

The Committee does not set the compensation level for any position as an absolute percentage of any other position, but it does consider internal pay relationships. Compensation decisions involve a high degree of discretion and are influenced by:

Any decisions to adjust compensation in recognition of individual excellence or weakness are subjective and are most likely to be reflected in base salary. In 2009, executive officers will have individual performance goals tied to specific business objectives within their scope of authority. The degree to which those goals are met will be reflected in the executive’s annual incentive bonus.

The Committee distinguishes between the top two executive positions (the Chief Executive Officer and the Chief Operating Officer) and the remaining executive officer positions. Base salaries, as well as annual incentive targets and stock option multiples, are higher for the CEO and COO in recognition of their greater level of authority and responsibility. In 2008, Mr. Haffner’s annual compensation package (consisting of the four primary components previously described) compared to the other NEO’s as follows:

Compensation Elements

Base Salary. Base salary is the key driver of our executives’ total compensation package, because incentive compensation is typically set as a percentage of base salary. The Committee believes it is important to evaluate base salaries relative to the market in order to protect the Company’s ability to retain its executives and attract new executives when necessary. Accordingly, the Committee reviewed the 2008 Survey Data to determine how our NEO salaries compared to the competitive market for similar positions. The Committee expects our NEO base salaries, collectively, to be slightly below the market median. At the time of the Committee’s review, our NEO base salaries ranged from 63% to 101% of the market median in the Towers Perrin survey and from 68% to 101% of the market median of the Watson Wyatt survey. The Committee considers this range appropriate to maintain market competitiveness.

30

Table of Contents

Each year, the Company sets a merit increase budget for salaried U.S. employees based on Consumer Price Index (CPI) data, other national economic data and our own business climate. For 2008, this merit increase budget was 3%. The Committee considers this merit increase figure as one factor in determining salary increases for executive officers.

Mr. Haffner and Mr. Glassman have the option to terminate their respective employment agreements without further obligation to the Company if they do not receive a salary increase for any year, unless the failure to receive an increase was due to a company-wide salary freeze applicable for the year. For 2009, salaries have been frozen throughout the Company until business conditions improve.

Annual Incentive Awards. We make annual incentive awards to our executive officers under our 2004 Key Officers Incentive Plan (the “Plan”) based on the Company’s operating results for the year. The Committee did not target annual incentive compensation to any particular percentage of the 2008 Survey Data.

The Plan contains two award formulas, one for Corporate participants and one for Profit Center participants. Messrs. Haffner, Glassman, and Flanigan are Corporate participants, while Messrs. Hauser and Downes are Profit Center participants. The different formulas tie participants’ award payouts to the portion of the Company’s performance they most directly affect. The Corporate award is based on the Company’s overall performance, and the Profit Center award is based on achievement of targets set for each operating location.

A participant’s award payout is figured by applying the appropriate award formula to a percentage of his salary (the “Target Percentage”), as shown in the example below.

Target Percentages are generally based on the executive’s position in the Company: the higher the position, the higher the Target Percentage. The NEOs’ Target Percentages for 2008 were:

Corporate Awards. The Corporate formula is based on the Company’s return on net assets (RONA). To determine the “return” aspect of RONA, we adjust EBIT by adding back: (i) annual incentive award payments, (ii) any Company matching contributions under our equity plans, and (iii) restructuring-related and asset impairment costs. To determine the “net assets” aspect of RONA, we: (i) deduct cash and current liabilities, (ii) adjust for accumulated other comprehensive income (deduct if positive, add back if negative) as reported in the shareholders’ equity section of our balance sheet, (iii) deduct goodwill, and (iv) average all quarterly calculations. Acquisitions are excluded from the award calculations for two years after the acquisition date. Except for the effect of excluded acquisitions, RONA, and its relationship to the annual incentive award payouts, can be calculated from the Company’s published financial statements. We internally track the impact of recent acquisitions.

31

Table of Contents

For 2008, RONA was 16.6%, resulting in a 2009 Corporate incentive payout of 56% as determined under the following payout schedule. (Individual payouts to NEOs are reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 38.)

2008

CORPORATE PAYOUT SCHEDULE

The Plan gives the Committee discretion to reduce an executive officer’s award by up to 10% based on its evaluation of the individual’s performance during the year. The Committee did not exercise this right in 2008, nor does it normally do so.

In setting the payout schedule, the Committee evaluated several payout scenarios and chose one that it believed struck an appropriate balance between accountability to shareholders and incentive for participants. If the threshold is too low, employees don’t have enough incentive to strive for higher returns, but if it’s too high, employees perceive it as unattainable. The Committee recognizes that either extreme results in an improper alignment of executive compensation and shareholder interests and determined that this payout schedule struck the proper balance.

Profit Center Awards. In connection with the launch of the Company’s new strategic plan, the Profit Center Award was revised in 2008 to tie each executive’s incentives more closely to the business, assets and employees under his control. The Profit Center formula is based 50% on achievement of budgeted earnings and 50% on return on capital employed (ROCE). Awards may be reduced by up to 20% for compliance shortcomings relating to internal audit issues, accounting errors, safety ratings, and environmental problems. The Committee believes this formula provides an attractive incentive while maintaining strong accountability for the financial and operational outcomes participants can most closely control.

The Committee chose the ROCE metric because it rewards executives for the efficient use of the assets under their supervision, such as reducing inventory, increasing production, and managing working capital. The efficient use of assets maximizes the Company’s returns with the least amount of investment.

Under the Profit Center formula, no awards are paid for achievement below 80% and the payout is capped at 150%, as illustrated below. Mr. Downes’ Profit Center payout for 2008 achievement (paid in 2009) was 149% and Mr. Hauser’s was 80%.

32

Table of Contents

2008

PROFIT CENTER PAYOUT SCHEDULE

To illustrate how a Profit Center award payout is calculated, assume a participant has a $250,000 salary and a 50% target percentage. Further assume that the participant manages locations that collectively achieved 90% of their budgeted earnings targets and 110% of their ROCE targets for the year. If the participant received no compliance deduction, the award would be calculated as follows:

Incentive Plan Changes in 2009. In 2008, we revised the Profit Center performance criteria and payout schedule to better align with the Company’s new strategic plan. In 2009, we will make similar changes to the Corporate award structure, measuring performance against ROCE and cash flow objectives. The Committee also intends to increase accountability for individual achievements of key business objectives by adding individual performance goals for both Profit Center and Corporate participants.

The Committee believes ROCE will encourage corporate management to focus on maximizing returns on key assets and align the interests of the two incentive groups. In addition, studies have shown a high correlation between return on capital metrics and TSR, a key feature of the Company’s strategic plan. The other performance measure, cash flow, reflects the importance of cash, especially in the current economy, to fund the Company’s dividend, capital expenditures and ongoing operations.

As discussed on page 22, we are contemplating the addition of individual performance goals to the performance objectives for 2009. The individual performance goals will likely be established separately from the incentive plan. Although not final, we expect the Committee to approve the following performance measures and relative weighting for 2009:

Equity Awards. We grant stock options to a broad group of employee partners annually. Options align shareholder and executive wealth, since an option’s value is contingent on and directly proportional to increases in the Company’s stock price. Our options have a 10-year term and vest in three annual installments beginning at

33

Table of Contents

18 months. Even though they are fully vested after 3 ¹/2 years, options tend to have a longer-term performance horizon, which complements the shorter horizons of the other variable components (incentive bonus – annual; PSUs – 3 years).

Beginning in 2008, the Committee began granting PSUs to a small group of senior management, including the NEOs. The Committee made this change to:

The option and PSU grants tie our executives’ pay to the Company’s performance. This is consistent with our philosophy that executive compensation should provide greater rewards for superior performance, as well as accountability for underperformance.

The Committee discusses potential equity awards at length at its November meeting, then approves the final option and PSU grants during a telephone meeting on the first business day of the year. The equity awards reported in the Summary Compensation Table and Grants of Plan Based Awards Table on pages 38 and 41, respectively, were granted on January 2, 2008. The exercise price of the options is equal to the closing market price of the Company’s common stock on the option grant date.

As discussed in The Annual Review section on page 28, the Committee monitors the value of past equity awards to gain an overall assessment of how current compensation decisions fit with past practices and to determine the executives’ accumulated variable compensation. As of the date of this proxy statement, all of the NEOs’ annual stock option grants are underwater, meaning they have no value at the current stock price. Because the value of past equity awards is well below expected levels, this factor did not influence any 2008 compensation decisions.

The number of option shares and PSUs granted to each executive is determined as a multiple of base salary:

The option multiple for each position has remained fixed for several years and reflects different levels of management responsibility. The PSU awards were granted in January 2008, based on data from the Committee’s 2007 Annual Review. To determine the size of the PSU awards, the Committee calculated the additional value that would be required to bring the long-term incentive (LTI) component of our total compensation package to approximately 75% of the median of comparable companies in the 2007 Survey Data. Although it considered the degree to which we fell short of the 75% of median mark, the Committee did not target the awards to this point. Instead, it set the awards generally within that range, considering each executive’s contributions, level of responsibility and importance to the strategic plan. The CEO’s award is significantly larger than those of the other executive officers in recognition of the responsibility and demands of his position, in addition to consideration of his compensation relative to the external market.

34

Table of Contents

We do not require a post-exercise holding period for option or PSU shares (unless stock ownership guidelines are not met) because the Committee believes our ESU Program, in which all our NEOs have significant holdings, effectively accomplishes the same purpose. The ESU Program, our primary executive retirement plan, is denominated entirely in Leggett stock units. ESU participants do not receive the stock they accumulate in the Program until they terminate employment, so executives build an increasing stake in Company stock during their years of service.

PSU awards are paid out in shares of Company stock at the end of a three-year performance period, based on the Company’s TSR relative to the TSR of a group of peer companies. The Peer Group consists of all the companies in the industrial, materials and consumer discretionary sectors of the S&P 500 and S&P Midcap 400 (327 companies in 2008). We selected this Peer Group because nearly all of our business units fall into these sectors.

The Committee chose the TSR metric because TSR is the key driver for our strategic plan. TSR is calculated as the change in the Company’s stock price over the performance period plus accumulated dividends divided by the Company’s stock price at the beginning of the period. This calculation assumes dividends are reinvested on the dividend payment date.

As shown below, a percentage of each executive’s PSU base award becomes payable at the end of the three-year performance period, based on how our TSR ranks relative to the Peer Group TSR. At the end of the first year of performance, we ranked in the 88th percentile.

PSU Payout Schedule

(based on Peer Group TSR)

Other Compensation Programs. As previously mentioned, the NEOs may participate in the ESU Program and Deferred Compensation Program, described in more detail on page 48. Our executives have voluntarily deferred substantial portions of their cash compensation into Leggett equity through the Deferred Compensation Program for many years. This investment has yielded a low return in recent years, but it has the potential to yield attractive returns if the Company performs well. The Committee believes these programs are a highly effective means of ensuring that executives build a long-term stake in the Company.

The Company’s defined benefit Retirement Plan was frozen on December 31, 2006. Employees who had previously participated in the Retirement Plan were offered a replacement benefit: a tax-qualified defined contribution Section 401(k) Plan, called the “Retirement K.” The Retirement K includes an age-weighted Company matching contribution designed to replicate the future benefit pre-empted by the Retirement Plan freeze.

NEOs cannot fully participate in the Retirement K due to limitations imposed by the Internal Revenue Code or the Employee Retirement Income Security Act, or resulting from 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.

35

Table of Contents

Perquisites and Personal Benefits. The Company believes perquisites should not be a significant part of our total compensation package. In 2008, the aggregate value of perquisites averaged less than 1% of each NEO’s total compensation, the bulk of which is attributable to the use of a Company car. Accordingly, we believe these benefits are appropriate when viewed in the overall context of our total compensation package.

Employment and Change in Control Agreements

In connection with the CEO succession plan implemented in May 2006, the Committee negotiated three-year employment agreements with Mr. Haffner and Mr. Glassman to secure the mutual commitment between these executives and the Company necessary to ensure a smooth and successful management transition. The material terms of these employment agreements are described on page 49.

The Company also has severance benefit agreements with Mr. Haffner and Mr. Glassman, but does not have severance benefit agreements with any other NEOs. These agreements, which have no stated expiration date, are designed to protect both the executives’ and the Company’s interests in the event of a change in control of the Company. The material terms of these agreements and the Company’s potential financial liability arising from these agreements are described on page 52 and 53, respectively. The Committee reviewed these agreements in 2008 to ensure they were in compliance with Internal Revenue Code Section 409A and also reviewed current trends in the use and structure of these agreements.

Severance payments provided under the agreements are equal to 3 times base salary and target bonus for Mr. Haffner and 2.5 times base salary and target bonus for Mr. Glassman. If benefits payable under the agreements exceed 10% of the limit imposed by Section 280G of the Internal Revenue Code, the Company will make a gross-up payment of the amount equal to the Section 280G excise taxes payable by the executive plus all income, employment and excise taxes incurred on the gross-up payment. If benefits payable under the agreement are less than 10% above the Section 280G limit, the benefits will be capped at $1 below the Section 280G limit.

Benefits only become payable under the agreements if the Company terminates the executive’s employment or if the executive quits for good reason following a change in control of the Company. This “double trigger” is intended to provide continuity for the business by encouraging the continued employment of the executive following the change in control. Our PSU awards also require a double trigger for accelerated vesting.

After extensive review in 2008, the Committee decided not to recommend any changes to the material terms of the severance agreements for the following reasons:

The benefits provided under these agreements do not impact the Committee’s decisions regarding other elements of the executives’ compensation. Because these agreements provide contingent compensation, not regular compensation, they are evaluated separately in view of their intended purpose.

The terms and conditions of the Company’s stock options also provide for the immediate vesting in the event of a change in control. This “single trigger” provision is the same for all optionees. The acceleration of

36

Table of Contents

equity vesting in a change in control is a common practice, designed to ensure that ongoing employees receive the benefit of the transaction by having the opportunity to realize value from their equity awards at the time of the deal. This provision recognizes that a change in control often causes significant disruption or change in employment relationships and thus treats all employees the same regardless of their employment status after the transaction.

Tax Considerations

Section 162(m) of the Internal Revenue Code generally disallows an income tax deduction to public companies for compensation over $1 million paid to certain executive officers. Our policy is to take reasonable and practical steps to avoid or minimize compensation that exceeds the $1 million cap. In 2008, $92,196 of Mr. Haffner’s compensation was not deductible for federal income tax purposes. The non-deductible portion resulted from a payment of previously deferred compensation.

Executive Stock Ownership

We believe executive officers should have a meaningful ownership stake in the Company to align their interests with those of shareholders. We expect executive officers to attain certain levels of stock ownership within five years and, subsequently, to maintain those levels. The stock ownership guidelines are as follows:

Shares of the Company’s stock owned outright, stock units, and the net shares acquirable upon the exercise of deferred compensation stock options are included in the ownership totals. A drop in the stock price can cause an executive who previously met the threshold to fall below it temporarily. An executive who has not met the ownership requirement, or falls below it due to a drop in the stock price, must hold any net shares acquired upon the exercise of stock options or vesting of performance stock units until he meets the ownership threshold. As of December 31, 2008, two of our NEOs were below their stock ownership thresholds at the current stock price.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion & Analysis with management and, based on that review and discussion, the Committee has recommended to the Board of Directors that the Compensation Discussion & Analysis be included in this proxy statement.

R. Ted Enloe, III (Chair)

Richard T. Fisher

Judy C. Odom

Phoebe A. Wood

37

Table of Contents

Summary Compensation Table

The following table reports the total 2008 compensation of our Chief Executive Officer, David Haffner, Chief Financial Officer, Matthew Flanigan, and the three other most highly compensated executive officers, Karl Glassman, Joseph Downes and Paul Hauser. Collectively, we refer to these five executives as the “Named Executive Officers” or “NEOs.”

Our executives frequently defer a portion of their cash compensation under the Company’s Deferred Compensation Program. This Program is described on page 48. To encourage executives to defer cash compensation into Company equity, the value of the equity received in lieu of the foregone cash compensation is greater than the value of foregone cash. In the table below, compensation is presented in the appropriate columns for which it was earned, without regard to the deferral, except that the portion of an equity award attributable to the discount is reflected in either the Stock Awards or Option Awards column, depending on whether the executive deferred cash into stock units or stock options. The full grant date fair value of the equity awards granted in lieu of the cash compensation is reflected in the Grants of Plan-Based Awards Table on page 41.

38

Table of Contents

See the Grants of Plan-Based Awards Table on page 41 for further information on the equity awards received in lieu of cash compensation in 2008. Amounts deferred into cash deferrals are included in the Non-Qualified Deferred Compensation Table on page 47.

39

Table of Contents