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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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VOTE BY INTERNET
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VOTE BY TELEPHONE
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VOTE BY MAIL
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http://www.proxyvote.com
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1-800-690-6903
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Sign and date the proxy card and return it in the enclosed postage-paid envelope.
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24 hours a day/7 days a week
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toll-free 24 hours a day/7 days a week
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Use the Internet to vote your proxy. Have your proxy card in hand when you access the website.
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Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
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Sincerely,
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MARK SARVARY
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President, Chief Executive Officer and Director
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By Order of the Board of Directors,
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LOU H. JONES
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Executive Vice President, General Counsel and Secretary
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Lexington, Kentucky
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March 16, 2015
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PROXY STATEMENT
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Are present and vote in person at the meeting; or
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Have properly submitted a proxy card, via the Internet, telephone or by mail.
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Election of eleven (11) directors to each serve for a one-year term and until the director’s successor has been duly elected and qualified (Proposal One).
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Ratification of the appointment of the firm of Ernst & Young LLP as Tempur Sealy International’s independent auditors for the year ending
December 31, 2015
(Proposal Two).
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Approval of the Second Amended and Restated Annual Incentive Bonus Plan for Senior Executives (Proposal Three)
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Advisory vote to approve the compensation of our Named Executive Officers (Proposal Four).
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Each director shall be elected by a majority of the shares present or represented by proxy at the Annual Meeting.
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Ratification of the appointment of Ernst & Young LLP as independent auditors for the year ending
December 31, 2015
requires the affirmative vote of the majority of shares present or represented by proxy and entitled to vote at the Annual Meeting.
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Approval of the Second Amended and Restated Annual Incentive Bonus Plan for Senior Executives described in this Proxy Statement requires the affirmative vote of the majority of shares present or represented by proxy and entitled to vote at the Annual Meeting.
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Approval of the advisory vote on the compensation of our Named Executive Officers requires the affirmative vote of the majority of shares present or represented by proxy and entitled to vote at the Annual Meeting.
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Abstentions are counted as votes present and entitled to vote and have the same effect as votes "against" the proposal.
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Broker non-votes, if any, will be handled as described below.
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Proposal One: "FOR" the election of eleven (11) directors to each serve for a one-year term and until the director’s successor has been duly elected and qualified.
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Proposal Two: "FOR" the ratification of the appointment of the firm of Ernst & Young LLP as Tempur Sealy International’s independent auditors for the year ending
December 31, 2015
.
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Proposal Three: "FOR" the approval of the Second Amended and Restated Annual Incentive Bonus Plan for Senior Executives.
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Proposal Four: "FOR" the advisory vote to approve the compensation of our Named Executive Officers.
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Name
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Age
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Position
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Mark Sarvary
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55
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President and Chief Executive Officer
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W. Timothy Yaggi
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54
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Chief Operating Officer
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Dale E. Williams
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52
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Executive Vice President and Chief Financial Officer
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Richard W. Anderson
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55
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Executive Vice President and President, North America
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Barry A. Hytinen
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40
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Executive Vice President of Corporate Development and Finance
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Lou H. Jones
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64
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Executive Vice President, General Counsel and Secretary
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David Montgomery
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54
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Executive Vice President and President of International Operations
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Brad Patrick
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50
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Executive Vice President and Chief Human Resources Officer
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Jay G. Spenchian
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56
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Executive Vice President and Chief Marketing Officer
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Bhaskar Rao
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49
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Chief Accounting Officer and Senior Vice President Finance
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•
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Fifth Amended and Restated By-Laws (By-Laws)
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•
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Core Values
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•
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Corporate Governance Guidelines
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•
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Code of Business Conduct and Ethics for Employees, Executive Officers and Directors
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•
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Policy on Complaints of Accounting, Internal Accounting Controls and Auditing Matters
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•
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Amended and Restated Certificate of Incorporation
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•
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Audit Committee Charter
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•
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Compensation Committee Charter
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•
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Nominating and Corporate Governance Committee Charter
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•
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Governance Hotline Information
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•
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Contact the Presiding Director
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•
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reviewing the scope of internal and independent audits;
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•
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reviewing the Company’s quarterly and annual financial statements and related SEC filings;
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•
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reviewing the adequacy of management’s implementation of internal controls;
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•
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reviewing the Company’s accounting policies and procedures and significant changes in accounting policies;
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•
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reviewing the Company’s business conduct and ethics policies and practices;
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•
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reviewing the Company’s policies with respect to risk assessment and risk management;
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reviewing information to be disclosed and types of presentations to be made in connection with the Company’s earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies;
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preparing an annual evaluation of the committee’s performance;
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•
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reporting regularly to the Board on the committee’s activities; and
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appointing the independent public accountants and reviewing their independence and performance and the reasonableness of their fees.
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reviewing and approving on an annual basis the corporate goals and objectives with respect to compensation for the chief executive officer, chief operating officer and the executive vice presidents (EVPs) and any other officer senior to the EVPs (collectively, the Senior Executives), evaluating at least once a year each Senior Executive's performance in light of these established goals and objectives and, based upon these evaluations, approving and making recommendations to the Board for approval regarding the Senior Executives’ annual compensation, including salary, bonus, incentive and equity compensation;
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reviewing and approving on an annual basis, with the input of the chief executive officer, the corporate goals and objectives with respect to the Company’s compensation structure for all other executive officers (other than the Senior Executives), including perquisites and other personal benefits, and evaluate at least once a year the executive officers’ performance in light of these established goals and objectives and based upon these evaluations, determine and approve the annual compensation for these executive officers, including salary, bonus, incentive, equity compensation, perquisites and other personal benefits;
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reviewing on an annual basis the Company’s compensation policies, including salaries and annual incentive bonus plans, with respect to the compensation of employees whose compensation is not otherwise set by the Compensation Committee or the Board;
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overseeing the development of executive succession plans and the leadership development and training of the Company’s executive team;
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reviewing on an annual basis the Company’s compensation structure for its Directors and making recommendations to the Board regarding the compensation of Directors;
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reviewing the Company's incentive compensation and stock-based plans and recommending changes in such plans to the Board as needed, having and exercising all the authority of the Board with respect to the administration of such plans;
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reviewing and approving employment agreements, severance arrangements and change in control agreements and provisions when, and if, appropriate, as well as any special supplemental benefits;
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reviewing with management the "Compensation Discussion and Analysis" section in the Company’s Proxy Statement;
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preparing and publishing an annual executive compensation report in the Company's Proxy Statement;
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preparing an annual evaluation of the committee's performance; and
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reporting regularly to the Board on the committee's activities.
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during
2014
, Cook provided no services to and received no fees from the Company other than in connection with the engagement;
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the amount of fees paid or payable by the Company to Cook in respect of the engagement represented (or are reasonably certain to represent) less than 1% of Cook’s total revenue for the 12 month period ended December 31,
2014
;
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Cook has adopted and put in place adequate policies and procedures designed to prevent conflicts of interest, which policies and procedures were provided to the Company;
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there are no business or personal relationships between Cook and any member of the Compensation Committee other than in respect of (i) the engagement, or (ii) work performed by Cook for any other company, board of directors or compensation committee for whom such Committee member also serves as an independent director;
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Cook owns no stock of the Company; and
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there are no business or personal relationships between Cook and any executive officer of the Company other than in respect of the engagement.
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identifying individuals qualified to become members of the Board;
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recommending to the Board director nominees to be presented at the annual meeting of stockholders and to fill vacancies on the Board;
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developing appropriate criteria for identifying properly qualified directorial candidates;
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annually reviewing and recommending to the Board members for each standing committee of the Board;
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preparing an annual evaluation of the committee’s performance and reporting regularly to the Board concerning actions and recommendations of the committee;
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establishing procedures to assist the Board in developing and evaluating potential candidates for executive positions, including the chief executive officer;
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reviewing various corporate governance-related policies, including the Code of Business Conduct and Ethics, the Related Party Transactions Policy, and the Policy on Insider Trading and Confidentiality, and recommending changes, if any, to the Board;
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reviewing and evaluating related party transactions; and
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developing and recommending to the Board corporate governance guidelines for the Company.
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a reputation for integrity, honesty and adherence to high ethical standards;
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the ability to exercise sound business judgment;
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substantial business or professional experience and the ability to offer meaningful advice and guidance to the Company’s management based on that experience; and
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the ability to devote the time and effort necessary to fulfill their responsibilities to the Company.
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each person known to beneficially own more than 5% of Tempur Sealy International’s outstanding common stock;
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each of Tempur Sealy International’s Directors and Named Executive Officers (as defined below in "Executive Compensation and Related Information"); and
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all of Tempur Sealy International’s Directors and executive officers as a group.
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Shares Beneficially Owned
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Number of
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Percentage
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Name of Beneficial Owner:
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Shares
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of Class
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5% Stockholders:
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H Partners Management, LLC
(1)
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6,075,000
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9.97
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%
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Select Equity Group, L.P.
(2)
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5,772,589
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9.47
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%
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Manulife Financial Corporation
(3)
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4,592,624
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7.53
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%
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The Vanguard Group
(4)
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3,771,705
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6.19
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%
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The London Company
(5)
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3,767,796
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6.18
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%
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Blackrock, Inc.
(6)
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3,571,447
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5.86
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%
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Chieftain Capital Management, Inc.
(7)
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3,519,007
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5.77
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%
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Executive Officers and Directors:
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Mark Sarvary
(8)
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979,304
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1.58
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%
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W. Timothy Yaggi
(8)
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55,532
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*
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Dale E. Williams
(8),(9)
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463,626
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*
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David Montgomery
(8)
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504,228
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*
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Richard Anderson
(8)
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217,349
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*
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Lawrence J. Rogers
(8)
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23,345
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*
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Evelyn S. Dilsaver
(8)
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27,117
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*
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Frank Doyle
(8)
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109,426
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|
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*
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John Heil
(8)
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27,251
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*
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Peter K. Hoffman
(8)
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91,476
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*
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Sir Paul Judge
(8)
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17,015
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*
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Nancy F. Koehn
(8)
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74,476
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*
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Christopher A. Masto
(8),(10)
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178,830
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*
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P. Andrews McLane
(8),(11)
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501,058
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*
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Robert B. Trussell, Jr.
(8),(12)
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62,526
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*
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All Executive Officers and Directors as a group (20 persons):
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3,547,929
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5.63
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%
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(1)
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Amounts shown reflect the aggregate number of shares of common stock held by H Partners Management, LLC based on information set forth in a Schedule 13D/A filed with the SEC on February 17, 2015. H Partners Management, LLC reported shared voting and shared dispositive power over all 6,075,000 shares. The address of H Partners Management, LLC is 888 Seventh Avenue, 29
th
Floor, New York, NY 10019.
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(2)
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Amounts shown reflect the aggregate number of shares of common stock held by Select Equity Group, L.P., based on information set forth in a Schedule 13G/A filed with the SEC on February 13, 2015. Select Equity Group, L.P. reported shared voting and shared dispositive power over all 5,772,589 shares. The address of Select Equity Group, L.P. is 380 Lafayette Street, 6
th
Floor, New York, NY 10003.
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(3)
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Amounts shown reflect the aggregate number of shares of common stock held by Manulife Financial Corporation's indirect, wholly-owned subsidiaries based on information set forth in a Schedule 13G filed with the SEC on February 12, 2015. Manulife Financial Corporation reported shared voting and shared dispositive power over all 4,592,624 shares. The address of Manulife Financial Corporation is 200 Bloor Street East, Toronto, Ontario, Canada, M4W 1E5.
|
(4)
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Amounts shown reflect the aggregate number of shares of common stock held by The Vanguard Group based on information set forth in a Schedule 13G/A filed with the SEC on February 10, 2015. The Vanguard Group reported sole voting power over 40,925 shares, shared voting power over none of the shares, sole dispositive power over 3,735,800 shares and shared dispositive power over 35,825 shares. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355.
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(5)
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Amounts shown reflect the aggregate number of shares of common stock held by The London Company based on information set forth in a Schedule 13G/A filed with the SEC on February 13, 2015. The London Company reported sole voting power over 3,441,231 shares, shared voting power over none of the shares, sole dispositive power over 3,441,231 shares and shared dispositive power over 326,565 shares. The address of The London Company is 1801 Bayberry Court, Suite 301, Richmond, VA 23226.
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(6)
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Amounts shown reflect the aggregate number of shares of common stock held by Blackrock, Inc. based on information set forth in a Schedule 13G/A filed with the SEC on February 9, 2015. Blackrock, Inc. reported sole voting power over 3,402,615, shared voting power and shared dispositive power over none of the shares and sole dispositive power over all 3,571,447 shares. The address of Blackrock, Inc. is 40 East 52
nd
Street, New York, NY 10022.
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(7)
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Amounts shown reflect the aggregate number of shares of common stock held by Chieftain Capital Management, Inc. based on information set forth in a Schedule 13D filed with the SEC on February 23, 2015. Chieftain Capital Management, Inc. reported sole voting power over 3,121,822 shares, shared voting power over none of the shares and sole dispositive power over all 3,519,007 shares. The address of Chieftain Capital Management, Inc. is 510 Madison Avenue, New York, NY 10022.
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(8)
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Includes the following number of shares of common stock which a director or executive officer has the right to acquire upon the exercise of stock options that were exercisable as of March 11, 2015, or that will become exercisable within 60 days after that date, or other equity instruments which are scheduled to vest and convert into common shares within 60 days after that date:
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Name
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Number of Shares
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Name
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Number of Shares
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Mark Sarvary
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910,748
|
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John A. Heil
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8,225
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Dale E. Williams
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184,882
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Peter K. Hoffman
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85,875
|
Lawrence J. Rogers
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1,326
|
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Sir Paul Judge
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12,625
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W. Timothy Yaggi
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55,532
|
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Nancy F. Koehn
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68,875
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David Montgomery
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219,301
|
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Christopher A. Masto
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65,425
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Richard Anderson
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185,691
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P. Andrews McLane
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14,034
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Evelyn S. Dilsaver
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17,016
|
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Robert B. Trussell, Jr.
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21,825
|
Frank Doyle
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52,325
|
|
|
|
|
|
|
|
|
|
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All Executive Officers and Directors as a Group:
|
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|
|
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2,065,395
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(9)
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Includes 100,000 shares of common stock held in irrevocable trusts for the benefit of Mr. Williams’ children.
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(10)
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Includes 107,804 shares of common stock held in revocable trust for the benefit of Mr. Masto’s children.
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(11)
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Includes 254,943 shares of common stock which Mr. McLane may be deemed to have an indirect pecuniary interest as his spouse is the trustee of 10 trusts holding these shares in the aggregate for the benefit of his children and grandchildren, and 12,000 shares of common stock held by Mr. McLane's spouse. Does not include 288,729 shares owned by a private charitable foundation formed and controlled by Mr. McLane and his spouse, in which they have no pecuniary interest and as to which he disclaims beneficial ownership.
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(12)
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Includes 35,000 shares of common stock, owned by RBT Investments, LLC and Robert B. Trussell, Jr. and Martha O. Trussell, Tenants in Common.
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•
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Mark Sarvary, President and Chief Executive Officer (CEO);
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•
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W. Timothy Yaggi, Chief Operating Officer (COO);
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•
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Dale Williams, Executive Vice President and Chief Financial Officer;
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•
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David Montgomery, Executive Vice President and President, International;
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•
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Richard Anderson, Executive Vice President and President, North America; and
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•
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Lawrence Rogers, Former Chief Executive Officer, Sealy Corporation;
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•
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Net sales of $2,989.8 million, an increase of 21%, or $525.5 million, from 2013 (total net sales and other results for 2013 include Sealy only from the closing of the acquisition on March 18, 2013 through December 31, 2013, while 2014 results include Sealy for the whole year, and as a result information may not be comparable)
|
•
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EPS of $1.75, an increase of 37% or $0.47, from 2013
|
•
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Adjusted EPS of $2.65, an increase of 11% or $0.27, from 2013. "Adjusted EPS" is a non-GAAP financial measure. For information about Adjusted EPS, including a reconciliation of Adjusted EPS to GAAP EPS, please refer to Appendix A of this Proxy Statement.
|
•
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Operating cash flow of $225.2 million, an increase of 129% or $126.7 million, from 2013
|
•
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Reduced debt by $234.2 million
|
•
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Led the industry with the successful execution of a record number of product introductions in 2014
|
•
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Returned Tempur North America to a position of strength and growth
|
•
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Substantially completed the integration of the legacy Tempur-Pedic and Sealy organizations in North America
|
•
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Acquired strategic growth platforms and divested non-core assets
|
•
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Initiated major cost reduction projects related to the Sealy integration
|
•
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Created and began to execute the plan to introduce the Sealy brands into high opportunity international markets.
|
Key Measures
(in millions)
|
|
2014 Results
|
|
2013 Results
|
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% Change from Prior
Year
|
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% Change from Prior Year - Constant
Currency
(3)
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||||||
Net sales
(1)
|
|
$
|
2,989.8
|
|
|
$
|
2,464.3
|
|
|
21.3
|
%
|
|
23.0
|
%
|
Adjusted EBIT
(2)
|
|
$
|
317.1
|
|
|
$
|
313.9
|
|
|
1.0
|
%
|
|
5.1
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%
|
Adjusted EBITDA
(2)
|
|
$
|
404.6
|
|
|
$
|
411.1
|
|
|
(1.6
|
)%
|
|
1.7
|
%
|
Adjusted EPS
(1)
|
|
$
|
2.65
|
|
|
$
|
2.38
|
|
|
11.3
|
%
|
|
17.7
|
%
|
Free Cash Flow
(1)
|
|
$
|
177.7
|
|
|
$
|
58.5
|
|
|
203.8
|
%
|
|
N/A
|
|
(1)
|
Net sales, Adjusted EPS and Free Cash Flow for 2013 includes Sealy results of operations from March 18, 2013 through December 31, 2013. Results for 2014 include Sealy operations for the full year, and as a result information may not be comparable. Adjusted EPS and Free Cash Flow are non-GAAP financial measures. For more information about Adjusted EPS and Free Cash Flow, including a reconciliation to GAAP EPS and net cash provided by operating activities, please refer to Appendix A of this Proxy Statement.
|
(2)
|
Adjusted EBIT and Adjusted EBITDA (which are non-GAAP financial measures) for 2013 represents the mathematical combination of the Company’s historical financial results for the twelve months ended December 31, 2013 and Sealy’s historical financial results for the pre-acquisition period from December 3, 2012 through March 3, 2013 (which was Sealy's last fiscal quarter prior to the Sealy Acquisition). Results for Sealy for periods prior to the Sealy Acquisition do not give effect to any purchase accounting considerations. This methodology does not include all the pro forma adjustments that would be required under Regulation S-X, but is consistent with the requirements for calculating Adjusted EBITDA for covenant compliance purposes under the Company's senior secured credit facility (2012 Credit Agreement). Please refer to Appendix A of this Proxy Statement for more information.
|
(3)
|
Amounts represent net sales, Adjusted EBIT, Adjusted EBITDA and Adjusted EPS for 2014 on a "constant currency basis", which is a non-GAAP measure. These references to constant currency basis do not include operational impacts that could result from fluctuations in foreign currency rates. To provide information on a constant currency basis, the applicable financial results are adjusted based on a simple mathematical model that translates current period results in local currency using the comparable prior year period’s currency conversion rate. This approach is used for countries where the functional currency is the local country currency. This information is provided so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby facilitating period-to-period comparisons of business performance. Constant currency information is not recognized under U.S. GAAP, and it is not intended as an alternative to U.S. GAAP measures.
|
•
|
Made no changes to base salaries for the NEOs. Base salaries were increased for each NEO in October 2013 to reflect market adjustments to align with the increased scope and complexity of running a larger, more complex business following the Sealy Acquisition. The Committee determined that salaries were market competitive and no increases were necessary for 2014.
|
•
|
Based on a review of our revised peer group companies reflecting the larger size of the Company following the Sealy Acquisition, our CEO’s annual incentive award target increased from 100% of base salary to 115% of base salary for 2014. Additionally, the target incentive opportunity as a percentage of base salary was increased from 60% to 65% of base salary for Mr. Anderson. No other adjustments were made to target annual incentive award opportunities for the remaining NEOs.
|
•
|
Granted 2014 annual equity awards to NEOs in a combination of Performance Restricted Stock Units (PRSUs) for 75% of the annual grant value (up from 50% in 2013) and stock options for 25% of the grant value (down from 50% in 2013).
|
•
|
Increased base salaries for Messrs. Sarvary, Yaggi, Williams and Montgomery by 3% and for Mr. Anderson by 5% in order to more closely approximate peer group median levels.
|
•
|
Increased Mr. Anderson’s target annual incentive award opportunity from 65% of base salary to 70% of base salary in order to better align with market data and to equal the award opportunity of the other EVP NEOs. No other adjustments were made to target annual incentive award opportunities for the remaining NEOs.
|
•
|
Based on our overall financial performance and each NEO's individual performance in 2014, determined that NEOs earned 2014 annual incentive bonuses ranging from 59.2% to 77.5% of target.
|
•
|
Determined that the two-year PRSUs granted in 2013 and with a performance period ending December 31, 2014 were not earned due to the Company’s results falling below the threshold ratio of Net Debt to Consolidated Adjusted EBITDA.
|
•
|
Consistent with our compensation philosophy, granted long-term incentives to our NEOs at a level somewhat above peer group median. Each NEO received a mix of equity awards comprised of approximately 67% PRSUs and 33% stock options.
|
•
|
The vast majority of our executives’ total compensation opportunity is in the form of incentive-based compensation, the majority is equity-based, and this incentive-based compensation is tied to long-term performance objectives, and aligned with stockholder interests.
|
•
|
We require our executives to meet meaningful stock ownership requirements and to retain at least 50% of the total number of shares granted to them under the Company’s compensation plans until the guidelines have been met. We also have stock ownership requirements for our non-employee directors, as discussed elsewhere in this Proxy Statement.
|
•
|
In early 2015, we adopted a Clawback Policy that provides that certain performance-based compensation is recoverable from specified officers, including the NEOs, if the Company determines that an officer has engaged in fraud, willful misconduct or gross negligence that directly caused or otherwise directly contributed to the need for a material restatement of the Company’s financial results.
|
•
|
We prohibit the hedging or pledging of Company securities by employees, executive officers and members of the Board of Directors.
|
•
|
We prohibit the re-pricing or exchange of stock options or stock appreciation rights without stockholder approval.
|
•
|
The Compensation Committee engages an independent compensation consultant with no other ties to the Company or its management.
|
•
|
We provide minimal executive perquisites as described elsewhere in this Proxy Statement. Other than those benefits described, we do not provide additional perquisites or benefits to our NEOs that differ from those provided to other employees.
|
•
|
We regularly review tally sheets and other analytical tools to assess executive compensation.
|
•
|
We do not provide tax "gross-ups" for any element of executive compensation, with the exception of the reimbursement of $373 of FICA taxes with respect to financial planning expenses incurred in 2013 by former executive officer Mr. Rogers under a legacy Sealy program which was eliminated for 2014. For additional information, see the "Summary Compensation Table" in this Proxy Statement.
|
Supplemental Table of CEO Compensation in 2014
|
||||||||||||||||||
2014 Comparison
|
|
3-Year Total Compensation (2012 - 2014)
|
||||||||||||||||
Compensation
Element |
|
Target
Compensation |
|
Realizable Compensation
|
|
Performance Results that Produced the Compensation
|
|
3-year Total Target Compensation
|
|
3-year Total Realizable Compensation
|
||||||||
Base Salary
|
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
|
Base salary not increased for 2014.
|
|
$
|
2,622,215
|
|
|
$
|
2,622,215
|
|
Annual Incentive
|
|
$
|
1,150,000
|
|
|
$
|
876,300
|
|
|
Below target payout due to combination of factors; net sales and Adjusted Free Cash Flow (Free Cash Flow adjusted for items permitted with respect to Consolidated EBITDA, as that term is defined in the 2012 Credit Agreement) above target but Adjusted EBIT below target. Overall 76% payout.
|
|
$
|
2,937,500
|
|
|
$
|
1,696,300
|
|
Total Cash
|
|
$
|
2,150,000
|
|
|
$
|
1,876,300
|
|
|
Below target pay earned for below target performance.
|
|
$
|
5,559,715
|
|
|
$
|
4,318,515
|
|
PRSU Awards
|
|
$
|
3,750,000
|
|
|
$
|
3,969,773
|
|
|
2014 PRSU grants are tracking towards target level of performance, but subject to forfeiture if goals are not met on December 31, 2015 and December 31, 2016 or significantly higher payouts if goals are exceeded.(1)
|
|
$
|
9,305,197
|
|
|
$
|
5,451,849
|
|
Option Awards
|
|
$
|
1,250,000
|
|
|
$
|
156,961
|
|
|
Target compensation reflects the Black Scholes value on the grant date. Realizable compensation reflects the difference between the closing price on December 31, 2014 and the exercise price of the award.
|
|
$
|
4,062,500
|
|
|
$
|
2,555,881
|
|
Total
|
|
$
|
7,150,000
|
|
|
$
|
6,003,034
|
|
|
Total pay was below target due to annual incentive payout below target and due to only modest share price appreciation since 2014 long-term equity grant on February 28, 2014.
|
|
$
|
18,927,412
|
|
|
$
|
12,326,245
|
|
Peer Group
|
||
Brunswick Corp.
|
Harman International Industries, Inc.
|
Newell Rubbermaid Inc.
|
Carter's Inc.
|
Hasbro Inc.
|
Polaris Industries Inc.
|
Columbia Sportswear Company
|
Jarden Corp.
|
Select Comfort Corp.
|
Deckers Outdoor Corporation
|
Leggett & Platt, Inc.
|
Steelcase Inc.
|
Dorel Industries Inc.
|
Lexmark International, Inc.
|
Tupperware Brands Corporation
|
Fossil Group Inc.
|
Mattress Firm Holding Corp.
|
Under Armour, Inc.
|
Gildan Activewear Inc.
|
Herman Miller, Inc.
|
Williams-Sonoma Inc.
|
Hanesbrands Inc.
|
Mohawk Industries, Inc.
|
Wolverine World Wide, Inc.
|
Pay Element
|
|
Purpose
|
|
Description
|
|
Link to Performance
|
Base Salary
|
|
To attract and retain leadership talent and to provide a competitive base of compensation that recognizes the executive’s skills, experience and responsibilities in the position.
|
|
Fixed, non-variable cash compensation.
|
|
Base salary levels are based on a number of factors and are significantly influenced by each individual’s sustained performance over time, including promotion to higher positions. Base salary is targeted at a competitive level, generally near the market median for each executive.
|
Annual Incentive Awards
|
|
To provide executives with a clear financial incentive to achieve critical short-term financial and operating targets or strategic initiatives.
|
|
Variable annual cash incentive with payout based on Company and individual performance over the fiscal year.
|
|
75% of the incentive plan’s target payout opportunity is based on the annual financial performance at the Company and, as applicable, division level, including net sales and Adjusted EBIT among other measures. Achievement of individual objectives and overall individual performance determine 25% of the incentive opportunity. Annual incentive opportunity is targeted at a competitive level, generally near the market median for each executive.
|
Long-Term Incentive Awards
|
|
To align a significant portion of executive compensation to the Company's long-term operational performance as well as share price growth and total stockholder return. This component serves to motivate and retain executive talent.
|
|
Annual grants of stock options and PRSUs.
|
|
Two types of PRSUs were awarded in 2014. The "2015 PRSU" will be earned for performance over the two-year, 2014 - 2015 period, based on performance against certain ratios of Net Debt to Consolidated Adjusted EBITDA.
The "2016 PRSU" will be earned for performance over the three-year, 2014 - 2016 period, based on performance against certain net sales objectives. The PRSU grants are defined and detailed elsewhere in this Proxy Statement. Stock options have value only if and to the extent our share price grows from the date of grant to the time of exercise. Target long-term incentive grant values in 2014 were allocated 37.5% to the 2015 PRSUs, 37.5% to the 2016 PRSUs, and 25% to stock options. Long-term incentive opportunity is targeted somewhat above the market median for each executive, consistent with the Company’s goal of growing faster than the industry and of achieving industry leading margins. |
Named Executive Officer
|
2013 Salary
|
|
2014 Salary
|
|
Increase (%)
|
|||||
Mark Sarvary
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
|
—
|
%
|
W. Timothy Yaggi
|
$
|
670,000
|
|
|
$
|
670,000
|
|
|
—
|
%
|
Dale Williams
|
$
|
470,000
|
|
|
$
|
470,000
|
|
|
—
|
%
|
David Montgomery
|
£
|
289,880
|
|
|
£
|
289,880
|
|
|
—
|
%
|
Richard Anderson
|
$
|
420,000
|
|
|
$
|
420,000
|
|
|
—
|
%
|
Named Executive Officer
|
Target Award as a % of
Salary
|
|
Target Award $
|
|
Maximum Award as a %
of Salary
|
||
Mark Sarvary
|
115%
|
|
$
|
1,150,000
|
|
|
230%
|
W. Timothy Yaggi
|
80%
|
|
$
|
536,000
|
|
|
160%
|
Dale Williams
|
70%
|
|
$
|
329,000
|
|
|
140%
|
David Montgomery
|
70%
|
|
£
|
202,920
|
|
|
140%
|
Richard Anderson
|
65%
|
|
$
|
273,000
|
|
|
130%
|
•
|
Company performance component based on net sales and Adjusted EBIT goals
|
•
|
Divisional performance component based on metrics that align to each NEO’s operational focus
|
•
|
Individual performance component based on the successful achievement of individual goals
|
Threshold Plan Requirement for 162(m) Purposes
|
Company Adjusted EBIT - $265 Million
|
|||||||||
Executive
|
Company
Net Sales and
Adjusted
EBIT
|
|
Company
Adjusted
Free Cash Flow
|
|
Divisional
Performance
|
|
Individual
Performance
|
|
|
Total
|
Mark Sarvary
|
50%
|
|
25%
|
|
—
|
|
25%
|
|
|
100%
|
W. Timothy Yaggi
|
50%
|
|
—
|
|
25%
|
|
25%
|
|
|
100%
|
Dale Williams
|
50%
|
|
25%
|
|
—
|
|
25%
|
|
|
100%
|
David Montgomery
|
50%
|
|
—
|
|
25%
|
|
25%
|
|
|
100%
|
Richard Anderson
|
50%
|
|
—
|
|
25%
|
|
25%
|
|
|
100%
|
|
2014 Performance Goals
($ in millions)
|
||||||||||
Financial Objective
|
Threshold
|
|
Target
|
|
Maximum
|
||||||
Net sales
|
$
|
2,793.0
|
|
|
$
|
2,907.5
|
|
|
$
|
3,021.0
|
|
Adjusted EBIT
|
$
|
321.5
|
|
|
$
|
350.3
|
|
|
$
|
384.8
|
|
Adjusted Free Cash Flow
|
$
|
144.0
|
|
|
$
|
163.8
|
|
|
$
|
186.9
|
|
•
|
Tempur North America net sales were above target, but Adjusted EBIT was below target, resulting in overall performance of 53.3% of the combined target. Tempur International net sales and Adjusted EBIT resulted in performance at 59.2% of target
|
•
|
Sealy net sales were above target, but Adjusted EBIT was below the level of threshold performance, resulting in no payout for this component
|
•
|
Leadership Cost Challenge cost savings resulted in performance at 129.3% of target
|
•
|
Adjusted Free Cash Flow resulted in performance at 100.0% of target; in determining this result, the Committee used its discretion to reduce the payout of this component from a significantly higher level of achievement in consideration of the Company’s overall operating margin being below target
|
•
|
Mr. Sarvary’s and Mr. Williams’ divisional payout, based on Company Adjusted Free Cash Flow achievement, was 100.0% of target
|
•
|
Mr. Yaggi’s divisional payout, based on a weighted combination of Tempur North America (53.3%), Sealy (0%) and Leadership Cost Challenge achievements (129.3%), was 47.2% of target
|
•
|
Mr. Montgomery’s divisional payout, Tempur International achievement, was 59.2% of target
|
•
|
Mr. Anderson’s divisional payout, based on a weighted combination of Tempur North America (53.3%) and Sealy (0%), was 26.7% of target
|
•
|
Drive better than industry revenue growth
|
•
|
Deliver cost productivity and synergy targets
|
•
|
Build brand equity
|
•
|
Improve the supply chain
|
•
|
Strong pipeline of innovation
|
•
|
Implement and refine the Strategic Plan
|
Named Executive Officer
|
2014 Actual Payout
|
|
Percentage of Overall Incentive
Target
|
||
Mark Sarvary
|
$
|
876,300
|
|
|
76.2%
|
W. Timothy Yaggi
|
$
|
344,648
|
|
|
64.3%
|
Dale Williams
|
$
|
254,975
|
|
|
77.5%
|
David Montgomery
|
£
|
128,852
|
|
|
63.5%
|
Richard Anderson
|
$
|
161,616
|
|
|
59.2%
|
|
Long-Term Incentive Programs
|
||
2013
|
|
2014
|
|
Allocation
|
50% PRSUs
50% Stock Options
|
|
37.5% 3-yr Tranche "2016" PRSUs
37.5% 2-yr Tranche "2015" PRSUs 25% Stock Options
|
Stock Option Vesting Period
|
2 year ratable
|
|
3 year ratable
|
PRSU Performance Measurement Period
|
2 years
|
|
3-yr Tranche: 3 years
2-yr Tranche: 2 years
|
PRSU Performance Goals
|
Net Debt/Adjusted EBITDA
(1)
|
|
3-yr Tranche "2016": Net sales and EBIT Margin
2-yr Tranche "2015": Ratio of Net Debt to Consolidated Adjusted EBITDA
|
PRSU Maximum Payout
|
200%
|
|
3-yr Tranche "2016": 300%
2-yr Tranche "2015": 200%
|
(1)
|
Net Debt, means, as of any date, the sum of all Consolidated Funded Debt on such date less the aggregate amount (not to exceed $150,000,000) of Qualified Cash on such date. Consolidated Funded Debt, Consolidated Adjusted EBITDA and Qualified Cash, which are all non-GAAP financial measures, have the meanings set forth in the 2012 Credit Agreement. A calculation of Consolidated Funded Debt less Qualified Cash to Adjusted EBITDA is provided in Appendix A to this Proxy Statement
|
Named Executive Officer
|
2014 LTIP Grant Value
|
|
# of Stock Options
(25% of Award)
|
|
# of Two-Year Tranche PRSUs "2015" (37.5% of award)
|
|
# of Three-Year Tranche PRSUs "2016" (37.5% of award)
|
|||||
Mark Sarvary
|
$
|
5,000,000
|
|
|
51,632
|
|
|
36,148
|
|
|
36,148
|
|
W. Timothy Yaggi
|
$
|
1,500,000
|
|
|
15,489
|
|
|
10,844
|
|
|
10,844
|
|
Dale Williams
|
$
|
925,000
|
|
|
9,552
|
|
|
6,687
|
|
|
6,687
|
|
David Montgomery
|
$
|
925,000
|
|
|
9,552
|
|
|
6,687
|
|
|
6,687
|
|
Richard Anderson
|
$
|
850,000
|
|
|
8,777
|
|
|
6,145
|
|
|
6,145
|
|
•
|
The two-year 2015 PRSUs are earned if certain targets based on the ratio of Net Debt as of December 31, 2015 to Consolidated Adjusted EBITDA as determined for the year ended December 31, 2015. Based on these metrics, the award payout at the end of the performance period will range from no payout to up to two times the target number of PRSUs. The performance period for the 2015 PRSUs is January 1, 2014 through December 31, 2015. The ratio of Net Debt to Consolidated Adjusted EBITDA was chosen as the objective to support the Company’s strategic priorities at the time of grant, which were to focus on cash flow and debt pay down.
|
•
|
The three-year 2016 PRSUs are earned if certain targets for 2016 net sales are achieved. Based on these metrics, the award payout at the end of the performance period will range from no payout to up to three times the target number of PRSUs. The PRSUs are also subject to a minimum Adjusted EBIT target for 2016. The performance period for the 2016 PRSUs is January 1, 2014 through December 31, 2016. The net sales objective with a minimum EBIT margin performance hurdle was chosen in order to reward profitable, long-term growth.
|
•
|
Increased base salaries for Messrs. Sarvary, Yaggi, Williams and Montgomery by 3% and for Mr. Anderson by 5% in order to more closely approximate peer group median levels. These increases also aligned with market practices and general salary movement trends.
|
•
|
Increased Mr. Anderson’s target annual incentive award opportunity from 65% of base salary to 70% of base salary in order to better align with market data and to equal the award opportunity of the other EVP NEOs. No other adjustments were made to target annual incentive award opportunities for the remaining NEOs.
|
•
|
The PRSUs are earned if certain growth objectives for Adjusted EPS (as defined in the award agreements for the PRSUs) are achieved. The performance period for this award is January 1, 2015 through December 31, 2017. Based on the metrics, the award payout at the end of the performance period will range from no payout to up to three times the target number of PRSUs.
|
•
|
Each of the stock option awards granted in February 2015 has an exercise price of $57.51 and vests in three equal annual installments on each of the first, second and third anniversary of the grant date.
|
Named Executive Officer
|
2015 LTIP Grant
Value
|
|
# of Stock Options (33% of Award)
|
|
# of PRSUs (67% of Award)
|
||
Mark Sarvary
|
$
|
5,650,000
|
|
|
$1,864,500
|
|
$3,785,500
|
W. Timothy Yaggi
|
$
|
1,900,000
|
|
|
$627,000
|
|
$1,273,000
|
Dale Williams
|
$
|
1,100,000
|
|
|
$363,000
|
|
$737,000
|
David Montgomery
|
$
|
1,100,000
|
|
|
$363,000
|
|
$737,000
|
Richard Anderson
|
$
|
975,000
|
|
|
$321,750
|
|
$653,250
|
•
|
Base Salary: Mr. Roger’s did not receive an increase in salary in 2014. His annual salary was $760,000 at the time of his departure from the Company.
|
•
|
Retention Award: Mr. Rogers’ RSU retention award and cash award both vested in accordance with their terms, on March 18, 2014. The equity portion of the retention award was included in the Summary Compensation Table in 2013 at the grant date fair value, and the cash retention award was earned and paid in 2014 and is included in the 2014 Summary Compensation Table.
|
•
|
Annual Incentive: Mr. Rogers 2014 target annual incentive opportunity of 100% of salary was identical to his 2013 target opportunity. Given his role as CEO of Sealy, his annual incentive opportunity was weighted 50% based upon Company net sales and Adjusted EBIT, 25% based upon Sealy net sales and Adjusted EBIT, and 25% based on Tempur North America net sales and Adjusted EBIT. Unlike the NEOs, Mr. Rogers had no incentive tied to performance against Individual Goals. Based upon final performance outcomes listed above in this Compensation Discussion and Analysis, the Compensation Committee determined that his overall bonus achievement was 42.0% of target, based on the corporate performance outcome of 57.4% of target and weighted divisional performance outcome of 26.7%. Based on the performance outcomes identified above, and given his retirement date of April 5, 2014, Mr. Rogers received a pro-rated annual incentive bonus award of $79,800.
|
•
|
Long-term Incentives: Mr. Rogers was not granted any long-term incentives in his role as an Executive Officer in 2014. See the Director Compensation Table elsewhere in this Proxy Statement for information regarding the grant of equity instruments in his role as a member of the Board of Directors.
|
|
Submitted by,
|
|
|
|
COMPENSATION COMMITTEE
|
|
Peter K. Hoffman (Chair)
|
|
Frank Doyle
|
|
John A. Heil
|
|
Sir Paul Judge
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus ($)
(1)
|
|
Stock Awards
($)
(2)
|
|
Option Awards ($)
(2)
|
|
Non-Equity
Incentive Plan
Compensation
($)
(1)
|
|
Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings ($)
|
|
All Other
Compensation
($)
(3)
|
|
Total ($)
|
||||||||||||||||
Mark Sarvary -
|
|
2014
|
|
$
|
1,000,000
|
|
|
$
|
—
|
|
|
$
|
3,750,000
|
|
|
$
|
1,250,000
|
|
|
$
|
876,300
|
|
|
$
|
—
|
|
|
$
|
24,445
|
|
|
$
|
6,900,745
|
|
President and Chief
|
|
2013
|
|
834,715
|
|
|
—
|
|
|
3,117,697
|
|
|
2,000,000
|
|
|
623,000
|
|
|
—
|
|
|
19,710
|
|
|
6,595,122
|
|
||||||||
Executive Officer
|
|
2012
|
|
787,500
|
|
|
—
|
|
|
2,437,500
|
|
|
812,500
|
|
|
197,000
|
|
|
—
|
|
|
18,310
|
|
|
4,252,810
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
W. Timothy Yaggi
(4)
-
|
|
2014
|
|
$
|
670,000
|
|
|
$
|
—
|
|
|
$
|
1,125,000
|
|
|
$
|
375,000
|
|
|
$
|
344,648
|
|
|
$
|
—
|
|
|
$
|
24,445
|
|
|
$
|
2,539,093
|
|
Chief Operating Officer
|
|
2013
|
|
565,577
|
|
|
110,550
|
|
|
750,000
|
|
|
750,000
|
|
|
221,100
|
|
|
—
|
|
|
121,814
(8)
|
|
|
2,519,041
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Dale E. Williams -
|
|
2014
|
|
$
|
470,000
|
|
|
$
|
—
|
|
|
$
|
693,750
|
|
|
$
|
231,250
|
|
|
$
|
254,975
|
|
|
$
|
—
|
|
|
$
|
24,445
|
|
|
$
|
1,674,420
|
|
Executive Vice President and
|
|
2013
|
|
393,969
|
|
|
70,077
|
|
|
666,700
|
|
|
400,000
|
|
|
134,890
|
|
|
—
|
|
|
19,710
|
|
|
1,685,346
|
|
||||||||
Chief Financial Officer
|
|
2012
|
|
372,000
|
|
|
61,380
|
|
|
544,000
|
|
|
181,000
|
|
|
—
|
|
|
—
|
|
|
18,310
|
|
|
1,176,690
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
David Montgomery
(5)
-
|
|
2014
|
|
$
|
453,099
|
|
|
$
|
—
|
|
|
$
|
693,750
|
|
|
$
|
231,250
|
|
|
$
|
201,403
|
|
|
$
|
—
|
|
|
$
|
91,812
|
|
|
$
|
1,671,314
|
|
Executive Vice President and
|
|
2013
|
|
410,667
|
|
|
71,263
|
|
|
666,700
|
|
|
400,000
|
|
|
187,358
|
|
|
—
|
|
|
85,654
|
|
|
1,821,642
|
|
||||||||
President of International Operations
|
|
2012
|
|
395,708
|
|
|
59,356
|
|
|
544,000
|
|
|
181,000
|
|
|
—
|
|
|
—
|
|
|
81,542
|
|
|
1,261,606
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Richard Anderson -
|
|
2014
|
|
$
|
420,000
|
|
|
$
|
—
|
|
|
$
|
637,500
|
|
|
$
|
212,500
|
|
|
$
|
161,616
|
|
|
$
|
—
|
|
|
$
|
24,445
|
|
|
$
|
1,456,061
|
|
Executive Vice President and
|
|
2013
|
|
375,877
|
|
|
50,400
|
|
|
604,100
|
|
|
362,500
|
|
|
78,624
|
|
|
—
|
|
|
19,710
|
|
|
1,491,211
|
|
||||||||
President, North America
|
|
2012
|
|
360,000
|
|
|
45,900
|
|
|
544,000
|
|
|
181,000
|
|
|
—
|
|
|
—
|
|
|
18,310
|
|
|
1,149,210
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Lawrence J. Rogers
(4)(6)
-
Former President and Chief
|
|
2014
|
|
$
|
201,515
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
79,800
|
|
|
$
|
—
|
|
|
$
|
1,510,914
|
|
|
$
|
1,792,229
|
|
Executive Officer - Sealy
|
|
2013
|
|
601,667
|
|
|
—
|
|
|
1,500,000
|
|
|
—
|
|
|
596,600
|
|
|
—
|
|
|
40,953
(7)
|
|
|
2,739,220
|
|
(1)
|
Bonus and Non-Equity Incentive Plan Compensation payouts were earned in
2014
and paid in
2015
pursuant to the Company's annual incentive bonus program for 2014. As described in the Compensation Discussion and Analysis, in 2012 and 2013 the amount paid upon the achievement of the Individual goals appear in the column "Bonus" and the amounts paid upon the achievement of the Company goals and segment goals appear in the column "Non-Equity Incentive Plan Compensation."
|
(2)
|
For stock awards and stock options granted, the value set forth is the grant date fair value, in accordance with FASB ASC 718. See Note 12 "Stock-based Compensation" to the Company’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31,
2014
for a complete description of the valuations. Stock awards include PRSUs, as described in the Compensation Discussion and Analysis. The grant date fair value displayed represents the target value at the grant date based upon the probable outcome of the performance conditions set forth in the PRSU award. The maximum value of the awards for each current executive officer who is a NEO could be, with respect to the PRSUs with a performance period that ends December 31, 2015, 200% of target, based on achievement of targets based on the ratio of Net Debt as of December 31, 2015 to Consolidated Adjusted EBITDA, each as defined in the award agreement. With respect to the PRSUs with a performance period that ends December 31, 2016, the maximum value of the awards for each current executive officer who is a NEO could be 300% of target based on achievement of net sales and Adjusted EBIT goals for the year ending December 31, 2016, as defined in the awards agreement. For the 2013 PRSUs granted to each current executive officer who is a NEO, a minimum ratio of Net Debt as of December 31, 2014 to Consolidated Adjusted EBITDA, each as defined in the award agreement, was not met; therefore the grants were not earned and no shares will be paid out with respect to the 2013 PRSU awards. For the 2012 PRSUs granted to each NEO, the minimum EBIT margin objective was not met for certain years, therefore the 2012 PRSU grants were terminated in 2013.
|
(3)
|
Represents amounts paid in
2014
on behalf of each of our NEOs for the following:
|
Named Executive Officer
|
|
Life and Disabilities
Insurance Premiums ($)
|
|
Contributions to Qualified Defined Contribution Plans ($)
|
|
Discretionary 401(k)
Contribution ($)
(a)
|
|
Car Allowance
($)
|
|
Tax Preparation, Legal and Financial Planning Fees ($)
|
|
Retention Award ($)
|
Mark Sarvary
|
|
2,685
|
|
10,400
|
|
4,160
|
|
7,200
|
|
—
|
|
—
|
W. Timothy Yaggi
|
|
2,685
|
|
10,400
|
|
4,160
|
|
7,200
|
|
—
|
|
—
|
Dale E. Williams
|
|
2,685
|
|
10,400
|
|
4,160
|
|
7,200
|
|
—
|
|
—
|
David Montgomery
|
|
16,499
|
|
51,042
|
|
—
|
|
23,446
|
|
825
|
|
—
|
Richard W. Anderson
|
|
2,685
|
|
10,400
|
|
4,160
|
|
7,200
|
|
—
|
|
—
|
Lawrence J. Rogers
|
|
514
|
|
10,400
|
|
—
|
|
—
|
|
—
|
|
1,500,000
|
(a)
|
Represents the Company’s contribution to a discretionary 401(k) contribution plan as described in the Compensation Discussion and Analysis. For additional discussion of the discretionary 401(k) contribution plan, please refer to the subsection titled "Other Benefits / Perquisites" of the Compensation Discussion and Analysis.
|
(4)
|
Both Mr. Yaggi and Mr. Rogers joined the Company in 2013, and accordingly the Summary Compensation information is presented only for 2013 and 2014.
|
(5)
|
Mr. Montgomery’s salary and Non-Equity Incentive Plan Compensation are paid in British Pounds (£) and are converted to United States Dollars ($) using the spot rate on December 31,
2014
.
|
(6)
|
The compensation reported in this Summary Compensation Table and the supplemental tables under "Compensation of Executive Officers" reflects the compensation Mr. Rogers received as an executive officer during 2014 through the date of his retirement in April 2014. All compensation he earned in his role as a member of the Board is reported in the Director Compensation Table under the heading "Director Compensation" elsewhere in this Proxy Statement.
|
(7)
|
Mr. Rogers 2013 "All Other Compensation" amount has been updated to include an additional $3,506 in financial planning incurred with respect to 2013 and the reimbursement of $373 of FICA taxes incurred with respect to the expenses.
|
(8)
|
Mr. Yaggi's 2013 "All Other Compensation" amount has been updated to include an additional $696 in relocation assistance with respect to 2013.
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(2)
|
|
All Other Option Awards:
Number of
Securities
Underlying
Options
(#)
(3)
|
|
Exercise or
Base Price of
Option
Awards
($/Sh)
|
|
Grant Date
Fair Value of
Stock and
Option Awards
($)
(4)
|
||||||||||||||||||||||
Name/Type of Award
|
|
Grant Date
|
|
Threshold ($)
|
|
Target ($)
|
|
Maximum ($)
|
|
Threshold (#)
|
|
Target (#)
|
|
Maximum (#)
|
|
|||||||||||||||||||
Mark Sarvary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Annual Incentive Bonus
|
|
2/28/2014
|
|
$
|
0
|
|
|
$
|
1,150,000
|
|
|
$
|
2,300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
18,074
|
|
|
36,148
|
|
|
72,296
|
|
|
|
|
|
|
$
|
1,875,000
|
|
||||||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
18,074
|
|
|
36,148
|
|
|
108,444
|
|
|
|
|
|
|
$
|
1,875,000
|
|
||||||
Stock Option
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
51,632
|
|
|
$
|
51.87
|
|
|
$
|
1,250,000
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
W. Timothy Yaggi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annual Incentive Bonus
|
|
2/28/2014
|
|
$
|
0
|
|
|
$
|
536,000
|
|
|
$
|
1,072,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
5,422
|
|
|
10,844
|
|
|
21,688
|
|
|
|
|
|
|
|
|
$
|
562,500
|
|
||||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
5,422
|
|
|
10,844
|
|
|
32,532
|
|
|
|
|
|
|
$
|
562,500
|
|
||||||
Stock Option
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,489
|
|
|
$
|
51.87
|
|
|
$
|
375,000
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Dale E. Williams
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annual Incentive Bonus
|
|
2/28/2014
|
|
$
|
0
|
|
|
$
|
329,000
|
|
|
$
|
658,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
3,344
|
|
|
6,687
|
|
|
13,374
|
|
|
|
|
|
|
|
|
$
|
346,875
|
|
||||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
3,344
|
|
|
6,687
|
|
|
20,061
|
|
|
|
|
|
|
$
|
346,875
|
|
||||||
Stock Option
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,552
|
|
|
$
|
51.87
|
|
|
$
|
231,250
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
David Montgomery
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annual Incentive Bonus
(5)
|
|
2/28/2014
|
|
$
|
0
|
|
|
$
|
317,169
|
|
|
$
|
634,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
3,344
|
|
|
6,687
|
|
|
13,374
|
|
|
|
|
|
|
|
|
$
|
346,875
|
|
||||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
3,344
|
|
|
6,687
|
|
|
20,061
|
|
|
|
|
|
|
$
|
346,875
|
|
||||||
Stock Option
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,552
|
|
|
$
|
51.87
|
|
|
$
|
231,250
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Richard W. Anderson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annual Incentive Bonus
|
|
2/28/2014
|
|
$
|
0
|
|
|
$
|
273,000
|
|
|
$
|
546,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
3,073
|
|
|
6,145
|
|
|
12,290
|
|
|
|
|
|
|
|
|
$
|
318,750
|
|
||||
Stock Award (PRSUs)
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
3,073
|
|
|
6,145
|
|
|
18,435
|
|
|
|
|
|
|
$
|
318,750
|
|
||||||
Stock Option
|
|
2/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,777
|
|
|
$
|
51.87
|
|
|
$
|
212,500
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Lawrence J. Rogers
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Annual Incentive Bonus
|
|
2/28/2014
|
|
$
|
0
|
|
|
$
|
760,000
|
|
|
$
|
1,520,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
These columns show the
2014
annual award opportunities under the Company's annual incentive bonus program for 2014. They do not reflect the actual amounts paid out under the program which are included in the Summary Compensation Table and discussed in the Compensation Discussion and Analysis under "
2014
Compensation Actions –
2014
Annual Incentive Performance Achievement and – Annual Incentive Plan Payments for
2014
."
|
(2)
|
These columns show the
2014
stock awards which include two awards of PRSUs under the 2013 Equity Incentive Plan, one covering a two year performance period ending December 31, 2015 and the other covering a three year performance period ending December 31, 2016. These awards are discussed in the Compensation Discussion and Analysis section of this Proxy Statement under "
2014
Compensation Actions – Long-Term Incentive Grants for
2014
."
|
(3)
|
This column shows the stock options granted in
2014
under the 2013 Equity Incentive Plan. The stock options vest in three equal annual installments on each of the first, second and third anniversaries of the grant date, subject to the NEO’s continued employment with the Company.
|
(4)
|
This column shows the grant date fair value of the PRSU and stock option awards computed in accordance with FASB ASC 718. See Note 12 "Stock-based Compensation" to the Company’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31,
2014
for a complete description of the valuations. For the PRSU awards, the grant date fair value displayed represents the target value at the grant date based upon the probable outcome of the performance conditions as of the grant date with respect to the PRSUs with a performance period that ends December 31, 2015, 200% of target, based on achievement of targets based on the ratio of Net Debt as of December 31, 2015 to Consolidated Adjusted EBITDA, each as defined in the award agreement. With respect to the PRSUs with a performance period that ends December 31, 2016, the maximum value of the awards for each current executive officer who is a NEO could be 300% of target based on achievement of net sales and Adjusted EBIT goals for the year ending December 31, 2016. The amounts do not reflect the risk that the awards may be forfeited in certain circumstances or, in the case of performance awards, that there is no payout if the required performance measures are not met.
|
(5)
|
Mr. Montgomery’s salary is paid in British Pounds (£). As a result, the Annual Incentive Bonus threshold, target and maximum opportunities were converted to United States Dollars ($) based on the exchange spot rate on December 31,
2014
.
|
(6)
|
Mr. Rogers did not receive an equity grant in 2014 in light of his intention to retire in April 2014. See the Director Compensation Table below, for information regarding the equity award of stock options and deferred stock units Mr. Rogers received in his role as a member of the Board.
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||||
Name
|
|
Number of Securities Underlying Unexercised Options
|
|
Number of Securities Underlying Unexercised Options
|
|
Option Exercise Price
|
|
Option
Expiration Date
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
|||||||
|
|
(#) Exercisable
|
|
(#) Unexercisable
|
|
($)
|
|
|
|
(#)
|
|
(S)
|
|||||||
Mark Sarvary
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
737,500
|
|
|
—
|
|
(1)
|
$
|
7.81
|
|
|
6/30/2018
|
|
|
|
|
|
||
|
|
14,480
|
|
|
7,239
|
|
(8)
|
$
|
71.50
|
|
|
2/8/2022
|
|
|
|
|
|
||
|
|
67,159
|
|
|
67,159
|
|
(9)
|
$
|
37.05
|
|
|
2/21/2023
|
|
|
|
|
|
||
|
|
—
|
|
|
51,632
|
|
(10)
|
$
|
51.87
|
|
|
2/27/2024
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
36,148
|
|
(12)
|
$
|
1,984,887
|
|
||||
|
|
|
|
|
|
|
|
|
|
36,148
|
|
(13)
|
$
|
1,984,887
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
W. Timothy Yaggi
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
25,185
|
|
|
25,184
|
|
(9)
|
$
|
37.05
|
|
|
2/21/2023
|
|
|
|
|
|
|
|
|
|
—
|
|
|
15,489
|
|
(10)
|
$
|
51.87
|
|
|
2/27/2024
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
10,844
|
|
(12)
|
$
|
595,444
|
|
||||
|
|
|
|
|
|
|
|
|
|
10,844
|
|
(13)
|
$
|
595,444
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Dale E. Williams
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
40,000
|
|
|
—
|
|
(2)
|
$
|
13.47
|
|
|
6/28/2016
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
—
|
|
(5)
|
$
|
11.76
|
|
|
5/15/2018
|
|
|
|
|
|
|
|
|
|
53,914
|
|
|
—
|
|
(6)
|
$
|
6.14
|
|
|
2/27/2019
|
|
|
|
|
|
|
|
|
|
6,082
|
|
|
—
|
|
(7)
|
$
|
46.68
|
|
|
2/21/2021
|
|
|
|
|
|
|
|
|
|
3,226
|
|
|
1,612
|
|
(8)
|
$
|
71.50
|
|
|
2/8/2022
|
|
|
|
|
|
|
|
|
|
13,432
|
|
|
13,432
|
|
(9)
|
$
|
37.05
|
|
|
2/21/2023
|
|
|
|
|
|
|
|
|
|
—
|
|
|
9,552
|
|
(10)
|
$
|
51.87
|
|
|
2/27/2024
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
6,687
|
|
(12)
|
$
|
367,183
|
|
||||
|
|
|
|
|
|
|
|
|
|
6,687
|
|
(13)
|
$
|
367,183
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
David Montgomery
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
133,333
|
|
|
—
|
|
(2)
|
$
|
13.47
|
|
|
6/28/2016
|
|
|
|
|
|
|
|
|
|
45,000
|
|
|
—
|
|
(6)
|
$
|
6.14
|
|
|
2/27/2019
|
|
|
|
|
|
|
|
|
|
6,082
|
|
|
—
|
|
(7)
|
$
|
46.68
|
|
|
2/21/2021
|
|
|
|
|
|
|
|
|
|
3,226
|
|
|
1,612
|
|
(8)
|
$
|
71.50
|
|
|
2/8/2022
|
|
|
|
|
|
|
|
|
|
13,432
|
|
|
13,432
|
|
(9)
|
$
|
37.05
|
|
|
2/21/2023
|
|
|
|
|
|
|
|
|
|
—
|
|
|
9,552
|
|
(10)
|
$
|
51.87
|
|
|
2/27/2024
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
6,687
|
|
(12)
|
$
|
367,183
|
|
||||
|
|
|
|
|
|
|
|
|
|
6,687
|
|
(13)
|
$
|
367,183
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Richard W. Anderson
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
45,000
|
|
|
—
|
|
(3)
|
$
|
20.27
|
|
|
12/21/2016
|
|
|
|
|
|||
|
|
50,000
|
|
|
—
|
|
(4)
|
$
|
20.02
|
|
|
1/29/2018
|
|
|
|
|
|||
|
|
25,000
|
|
|
—
|
|
(5)
|
$
|
11.76
|
|
|
5/15/2018
|
|
|
|
|
|||
|
|
27,500
|
|
|
—
|
|
(6)
|
$
|
6.14
|
|
|
2/27/2019
|
|
|
|
|
|||
|
|
6,082
|
|
|
—
|
|
(7)
|
$
|
46.68
|
|
|
2/21/2021
|
|
|
|
|
|||
|
|
3,226
|
|
|
1,612
|
|
(8)
|
$
|
71.50
|
|
|
2/8/2022
|
|
|
|
|
|||
|
|
12,173
|
|
|
12,172
|
|
(9)
|
$
|
37.05
|
|
|
2/21/2023
|
|
|
|
|
|||
|
|
—
|
|
|
8,777
|
|
(10)
|
$
|
51.87
|
|
|
2/27/2024
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
6,145
|
|
(12)
|
$
|
337,422
|
|
||||
|
|
|
|
|
|
|
|
|
|
6,145
|
|
(13)
|
$
|
337,422
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Lawrence J. Rogers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
664
|
|
|
662
|
|
(11)
|
52.87
|
|
|
5/6/2024
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
1,419
|
|
(14)
|
$
|
77,917
|
|
(1)
|
These options, granted on June 30, 2008, have a 10-year term and became exercisable in four equal installments over four years, beginning with the one-year anniversary date of the grant.
|
(2)
|
These options, granted on June 28, 2006, have a 10-year term. Twenty-five percent (25%) of these options became exercisable on July 7, 2008 and the remaining shares became exercisable in equal installments on a quarterly basis over the subsequent twelve (12) quarters.
|
(3)
|
These options, granted on December 21, 2006, have a 10-year life and became exercisable in equal installments over four years, beginning with the one-year anniversary of the grant date.
|
(4)
|
These options, granted on January 29, 2008, have a 10-year life and became exercisable in equal installments over four years, beginning with the one-year anniversary of the grant date.
|
(5)
|
These options, granted on May 15, 2008, have a 10-year term and became exercisable in two equal installments over two years, beginning with the one-year anniversary date of the grant.
|
(6)
|
These options, granted on February 27, 2009, have a 10-year life and become exercisable in equal installments over four years, beginning with the one-year anniversary of the grant date.
|
(7)
|
These options, granted on February 22, 2011, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary of the grant date.
|
(8)
|
These options, granted on February 9, 2012, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary of the grant date.
|
(9)
|
The options, granted on February 22, 2013, have a 10-year life and become exercisable in equal installments over two years, beginning with the one-year anniversary of the grant date.
|
(10)
|
These options, granted on February 28, 2014, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary of the grant date.
|
(11)
|
Mr. Rogers received an equity grant of options and deferred stock units in connection with his service as a non-employee member of the Board. These grants are described in the Director Compensation Table elsewhere in this Proxy Statement. He has no other outstanding equity awards.
|
(12)
|
These PRSUs, granted on February 28, 2014, covered a two-year performance period ending December 31, 2015. Distribution of the awards was dependent upon the achievement of certain performance metrics within a range set forth by the Compensation Committee and the Board, and is to occur no later than the fifteenth day of the third month following December 31, 2015. The amounts in this column represent the distribution of the PRSUs based on achievement of the performance metrics at the target.
|
(13)
|
These PRSUs, granted on February 28, 2014, covered a three-year performance period ending December 31, 2016. Distribution of the awards was dependent upon the achievement of certain performance metrics within a range set forth by the Compensation Committee and the Board, and is to occur no later than the fifteenth day of the third month following December 31, 2016. The amounts in this column represent the distribution of the PRSUs based on achievement of the performance metrics the target.
|
(14)
|
These deferred stock units ("DSUs"), granted on May 7, 2014, vest in one year over four quarterly installments following the grant date. The DSUs are released on the three-year anniversary of the grant date. This grant is a result of an annual equity award for service on the Board.
|
|
|
Option Awards
|
|
Stock Awards
|
|
||||||||||
Name
|
|
Number of Shares
Acquired on
Exercise (#)
|
|
Value Realized on
Exercise ($)
|
|
Number of Shares
Acquired on
Vesting (#)
|
|
Value Realized on
Vesting ($)
|
|
||||||
Mark Sarvary
|
|
—
|
|
|
$
|
—
|
|
|
26,991
|
|
(1)
|
$
|
1,334,165
|
|
(1)
|
W. Timothy Yaggi
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
Dale E. Williams
|
|
—
|
|
|
$
|
—
|
|
|
7,198
|
|
(2)
|
$
|
355,797
|
|
(2)
|
David Montgomery
|
|
—
|
|
|
$
|
—
|
|
|
7,198
|
|
(2)
|
$
|
355,797
|
|
(2)
|
Richard W. Anderson
|
|
30,000
|
|
|
$
|
1,467,211
|
|
|
6,521
|
|
(2)
|
$
|
322,333
|
|
(2)
|
Lawrence J. Rogers
|
|
—
|
|
|
$
|
—
|
|
|
32,355
|
|
(3)
|
$
|
1,672,754
|
|
(3)
|
(1)
|
These PRSUs, granted on February 22, 2013, covered a one-year performance period ending December 31, 2013. Distribution of the awards was dependent upon the achievement of certain performance metrics within a range set forth by the Compensation Committee and the Board, and occurred on February 22, 2014. The amounts in this column represent the distribution of the PRSUs based on achievement of the performance metrics at 100% the target award.
|
(2)
|
These RSUs, granted February 22, 2013, vested on February 22, 2014.
|
(3)
|
These RSUs, granted March 18, 2013, were part of a retention grant and vested on March 18, 2014.
|
Name
|
|
Executive Contributions for the Year Ended 12/31/14 ($)
(1)
|
|
Registrant
Contributions
for Year ended 12/31/14
($)
(2)
|
|
Aggregate
Earnings
for Year ended 12/31/14
($)
(3)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
12/31/14
($)
|
||||||||
Lawrence J. Rogers
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,217
|
|
|
$
|
—
|
|
|
$ 121,695
(4)
|
(1)
|
Eligible executives have no ability to elect to defer any amounts under this program. The only amounts contributed are from the Company under the Sealy Benefit Equalization Plan.
|
(2)
|
As noted above, no contributions for the 2014 Plan Year were allocated to executive’s accounts in 2014 because no contribution under the Sealy Profit Sharing Plan was made for 2014. The amount in this column is included in the "All Other Compensation" column for 2014 in the "Summary Compensation Table" above.
|
(3)
|
Earnings on balances in the Benefit Equalization Plan equal the rate of return on investments made by each participant in the Profit Sharing Plan, which was recently merged into the Tempur Sealy 401(k) plan, and are not included in the Summary Compensation Table.
|
(4)
|
This amount includes aggregate earnings of $2,153 for the year ended December 31, 2013. The registrant contributions for the year ended December 31, 2013 was $7,475.
|
|
|
|
|
Termination
By Company
Without Cause
|
|
Employee
Resignation
For Good Reason
|
|
Termination
By Company
For Cause
|
|
Termination
Due to
Disability
|
|
Death
|
|
Change of
Control
|
|
Change of
Control and
Termination
|
|||||||||||
Name
|
|
Benefits and Payments
|
|
($)
(1)
|
|
($)
(1)
|
|
($)
|
|
($)
(1)
|
|
($)
(1)
|
|
($)
(2)
|
|
($)
(2)
|
|||||||||||
Mark Sarvary
|
|
Cash Severance
(3)
|
|
$
|
3,000,000
|
|
|
$
|
3,000,000
|
|
|
—
|
|
|
$
|
1,000,000
|
|
|
$
|
1,000,000
|
|
|
—
|
|
|
—
|
|
|
|
Annual Incentive Payment
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Acceleration of equity awards
(5)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,679,453
|
|
|
—
|
|
|
4,679,453
|
|
||||
|
|
Health and Welfare Continuation
(6)
|
|
31,979
|
|
|
31,979
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
W. Timothy Yaggi
|
|
Cash Severance
(7)
|
|
1,876,000
|
|
|
1,876,000
|
|
|
—
|
|
|
536,000
|
|
|
536,000
|
|
|
—
|
|
|
—
|
|
||||
|
|
Annual Incentive Payment
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Acceleration of equity awards
(8)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,687,761
|
|
|
—
|
|
|
1,687,761
|
|
||||
|
|
Health and Welfare Continuation
(6)
|
|
15,989
|
|
|
15,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Dale E. Williams
|
|
Cash Severance
(9)
|
|
$
|
470,000
|
|
|
$
|
470,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
Annual Incentive Payment
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Acceleration of equity awards
(10)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,003,300
|
|
|
—
|
|
|
1,003,300
|
|
||||
|
|
Health and Welfare Continuation
(6)
|
|
15,989
|
|
|
15,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
David Montgomery
|
|
Cash Severance
(11)
|
|
$
|
453,099
|
|
|
$
|
453,099
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
|
|
Annual Incentive Payment
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
||||
|
|
Acceleration of equity awards
(13)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,003,300
|
|
|
—
|
|
|
1,003,300
|
|
||||
|
|
Health and Welfare Continuation
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Pension
Benefits
(14)
|
|
51,042
|
|
|
51,042
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Car Allowance
(15)
|
|
23,446
|
|
|
23,446
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Richard Anderson
|
|
Cash Severance
(9)
|
|
420,000
|
|
|
420,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Annual Incentive Payment
(4)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Acceleration of equity awards
(16)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
918,918
|
|
|
—
|
|
|
918,918
|
|
||||
|
|
Health and Welfare Continuation
(6)
|
|
15,989
|
|
|
15,989
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Lawrence J.
Rogers
(17)
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Excludes amounts for both unpaid, earned salary and, if applicable for accrued, unused vacation, if applicable.
|
(2)
|
The NEOs' employment agreements do not provide for any payments solely due to a change in control of Tempur Sealy International, Sealy Corporation or Tempur Sealy International Limited, as applicable. To the extent equity award agreements trigger acceleration of vesting of awards, such accelerations are noted in the column and the specific details are described in separate footnotes. To the extent a termination of employment occurs in connection with a change in control, any severance or bonus payments would only be made to the extent the termination qualified as a termination by the Company without cause or as a resignation by the employee for good reason, and such payments are described in the appropriate column in the table.
|
(3)
|
For Mr. Sarvary, the amount presented under Cash Severance for Termination by Company without Cause and for Employee Resignation for Good Reason includes two years of base salary reduced by any salary continuation benefit paid for under any plan maintained by the Company and an additional lump sum amount equal to the pro-rata portion of base salary based on the number of days of the calendar year prior to the effective date of termination. Upon Termination as a result of Death or Disability, Mr. Sarvary will receive a lump sum payment equal to the pro-rata portion of base salary based on the number of days of the calendar year prior to the effective date of Death or Disability.
|
(4)
|
With respect to the currently employed NEOs, because the termination event is deemed to have occurred on December 31, 2014, any incentive compensation is payable as earned under the terms of the annual incentive program, so no additional amounts would be payable as a result of the deemed termination. With respect to Mr. Rogers’ incentive compensation, he earned a prorated amount in accordance with the annual incentive program, and was not eligible to receive any additional amount. The incentive compensation earned for 2014 is discussed in the “Compensation Discussion and Analysis” and “Summary Compensation Table” elsewhere in this Proxy Statement.
|
(5)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Sarvary’s stock agreements dated February 22, 2013 and February 28, 2014, provide that if he is terminated due to disability, death, or in the event of a change in control, if Mr. Sarvary is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his remaining unvested options immediately vest. Mr. Sarvary’s PRSU agreements dated February 28, 2014 provide that if he is terminated due to death, or in the event of a change in control, if Mr. Sarvary is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his target PRSU awards immediately vest.
|
(6)
|
Messrs. Sarvary and Yaggi would be eligible to continue to participate in welfare benefit plans offered by the Company for a period of two years, and Messrs. Anderson and Williams for one year, following termination without cause or resignation for good reason.
|
(7)
|
For Mr. Yaggi, the amount presented under Cash Severance for Termination by Company without Cause and for Employee Resignation for Good Reason includes two years of base salary and an additional lump sum amount equal to 80% of the pro-rata portion of base salary based on the number of days of the calendar year prior to the effective date of termination. Upon Termination as a result of Death or Disability, Mr. Yaggi will receive a lump sum payment equal to 80% of the pro-rata portion of base salary based on the number of days of the calendar year prior to the effective date of Death or Disability.
|
(8)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Yaggi’s stock option agreements dated February 22, 2013 and February 28, 2014, provide that if he is terminated due to disability, death, or in the event of a change in control, if Mr. Yaggi is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his remaining unvested options immediately vest. Mr. Yaggi’s PRSU agreements dated February 28, 2014 provide that if he is terminated due to death, or in the event of a change in control, if Mr. Yaggi is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his target PRSU awards immediately vest.
|
(9)
|
For Messrs. Anderson and Williams, the amount presented under Cash Severance for Termination by Company without Cause and for Employee Resignation for Good Reason represents twelve months of base salary.
|
(10)
|
Mr. Williams’ stock option agreements dated February 9, 2012, February 22, 2013 and February 28, 2014, provide that if he is terminated due to death, or in the event of a change in control, if Mr. Williams is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his remaining unvested options immediately vest. Mr. Williams’ PRSU agreements dated February 28, 2014 provide that if he is terminated due to death, or in the event of a change in control, if Mr. Williams is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his target PRSU awards immediately vest.
|
(11)
|
For Mr. Montgomery, the amount presented under Cash Severance for Termination by Company without Cause and for Employee Resignation for Good Reason includes a lump sum payment equal to one year of base salary. Mr. Montgomery’s cash severance amounts are denominated in British Pounds and have been converted to United States Dollars using the spot conversion rate as of December 31,
2014
.
|
(12)
|
For death while in service to the Company, insurance coverage exists which will provide for four (4) times base salary paid in a lump sum, of which the payout as of December 31,
2014
would have been $1,812,396: this benefit is available to all other employees who work in the United Kingdom (UK) at three (3) times base salary. In addition, a widow’s benefit insurance contract exists that pays an amount of up to 25% of base salary until normal retirement age of 65; the payout for this component would have been $1,246,022 as of December 31,
2014
. The widow’s benefit is only available to Mr. Montgomery. Mr. Montgomery also has Company-provided insurance coverage providing a lump sum of four times base salary at the time he experiences an illness or injury preventing him from future service. The payout as of December 31,
2014
, would have been $1,812,396; this benefit is available to all other members of the management team in the UK at three (3) times base salary. In the case of long term disability, permanent health insurance coverage will be provided equal to 55% of salary until normal retirement age; the payout for this component is also covered by an insurance contract and would have been $2,741,249 as of December 31,
2014
. The permanent health insurance coverage benefit is only available
|
(13)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Montgomery’s stock option agreements dated February 9, 2012, February 22, 2013 and February 28, 2014 provide that if he is terminated due to death, change in control, or in the event of a change in control, if Mr. Montgomery is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his remaining unvested options immediately vest. Mr. Montgomery’s PRSU agreements dated February 28, 2014 provide that if he is terminated due to death, or in the event of a change in control, if Mr. Montgomery is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his target PRSU awards immediately vest.
|
(14)
|
For Mr. Montgomery, the amount presented under Pension benefits for Termination by Company without Cause and for Employee Resignation for Good Reason includes continuation of pension benefits for a period of twelve months.
|
(15)
|
For Mr. Montgomery, the amount presented under Car allowance benefits for Termination by Company without Cause and for Employee Termination for Good Reason includes continuation of car allowance benefits for a period of twelve months.
|
(16)
|
Mr. Anderson's stock option agreements dated February 9, 2012, February 22, 2013 and February 28, 2014, provide that if he is terminated due to death, or in the event of a change in control, if Mr. Anderson is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his remaining unvested options immediately vest. Mr. Anderson's PRSU agreements dated February 28, 2014 provide that if he is terminated due to death, or in the event of a change in control, if Mr. Anderson is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change in control, his target PRSU awards immediately vest.
|
(17)
|
Mr. Rogers retired in April 2014 and, thereafter, was no longer eligible to receive any amounts described above under "Employment Arrangements" and "Termination of Employment Arrangements and Change in Control Arrangements".
|
Annual Retainer:
|
|
$70,000 cash retainer, payable in equal quarterly installments.
|
|
|
|
Annual Equity Award Grant:
|
|
An annual equity award targeted at $100,000, divided between options and Deferred Stock Units (DSUs) in the proportion set by the Board.
|
Annual Non-executive Chairman of the Board Retainer:
|
|
$25,000 cash retainer and a supplemental equity award targeted at $60,000, divided between options and DSUs in the proportion set by the Board.
|
|
|
|
Annual Committee Chair Retainer:
|
|
• Audit Committee Chair receives a cash retainer of $18,000.
• Compensation Committee Chair receives a cash retainer of $10,000.
• Nominating and Governance Committee Chair receives a cash retainer of $5,000.
|
|
|
|
Committee Member Retainers:
|
|
• Each Audit Committee member receives a cash retainer of $18,000.
• Each Compensation Committee member receives a cash retainer of $10,000.
• Each Nominating and Governance Committee member receives a cash retainer
of $5,000.
|
Expense Reimbursements:
|
|
Reimbursement of reasonable expenses incurred in attending meetings.
|
Name
|
|
Fees Earned Or Paid
In Cash ($)
(1)
|
|
Option Awards ($)
(2)(4)
|
|
Stock Awards ($)
(3)(4)
|
|
Total ($)
|
||||||||
Evelyn S. Dilsaver
|
|
$
|
85,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
185,500
|
|
Frank Doyle
|
|
$
|
113,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
213,500
|
|
John A. Heil
|
|
$
|
82,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
182,500
|
|
Peter K. Hoffman
|
|
$
|
105,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
205,500
|
|
Sir Paul Judge
|
|
$
|
95,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
195,500
|
|
Nancy F. Koehn
|
|
$
|
72,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
172,500
|
|
Christopher A. Masto
|
|
$
|
77,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
177,500
|
|
P. Andrews McLane
|
|
$
|
97,500
|
|
|
$
|
40,000
|
|
|
$
|
120,000
|
|
|
$
|
257,500
|
|
Lawrence J. Rogers
(5)
|
|
$
|
35,000
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
135,000
|
|
Robert B. Trussell, Jr.
|
|
$
|
67,500
|
|
|
$
|
25,000
|
|
|
$
|
75,000
|
|
|
$
|
167,500
|
|
(1)
|
Director compensation is based on the Board year, which is the period from one annual meeting to the next annual meeting. The amounts shown are pro-rated for calendar year
2014
, and do not represent the full amounts each director will earn from the
2014
Annual Meeting until the
2015
Annual Meeting.
|
(2)
|
Stock option grants covering 1,326 shares of common stock were made to each non-employee Director on May 7, 2014 at an exercise price of $52.87, and options covering an additional 795 shares were granted to the Non-executive Chair of the Board. The option awards vest in four equal increments at the end of July 2014, October 2014, January 2015 and April 2015. Vesting of each option award is subject to the applicable grant recipient being a member of the Board or serving as Non-executive Chair of the Board, as of the applicable vesting date.
|
(3)
|
DSUs grants covering 1,419 shares of common stock were made to each non-employee Director on May 7, 2014 at a fair value of $52.87 and DSUs covering an additional 851 shares were granted to the Non-executive Chair of the Board. The DSUs vest in four equal increments at the end of July 2014, October 2014, January 2015 and April 2015. Vesting of each DSU is subject to the applicable grant recipient being a member of the Board or serving as Non-executive Chair of the Board as of the applicable vesting date. All DSUs which become vested shall be paid on the third anniversary date of the grant date applicable to each DSU.
|
(4)
|
For DSU awards and stock options granted, the value set forth is the grant date fair value, in accordance with FASB ASC 718. See the Company’s Annual Report on Form 10-K for the year ended
December 31, 2014
for a complete description of the valuations. The following table sets forth the aggregate number of option awards and stock awards outstanding for each director as of
December 31, 2014
, other than for Mr. Sarvary whose outstanding equity awards are set forth in the "Outstanding Equity Awards at Fiscal Year-End" table elsewhere in this Proxy Statement:
|
Name
|
|
Aggregate Option Awards
Outstanding As Of December
31, 2014
|
|
Aggregate DSU Awards Outstanding As of December 31, 2014
|
||
Unvested
|
|
Vested
(a)
|
||||
Evelyn S. Dilsaver
|
|
17,016
|
|
709
|
|
2,720
|
Frank Doyle
|
|
52,325
|
|
709
|
|
2,720
|
John A. Heil
|
|
8,225
|
|
709
|
|
2,720
|
Peter K. Hoffman
|
|
85,875
|
|
709
|
|
2,720
|
Sir Paul Judge
|
|
12,625
|
|
709
|
|
2,720
|
Nancy F. Koehn
|
|
68,875
|
|
709
|
|
2,720
|
Christopher A. Masto
|
|
65,425
|
|
709
|
|
2,720
|
P. Andrews McLane
|
|
14,034
|
|
1,134
|
|
4,564
|
Lawrence J. Rogers
|
|
1,326
|
|
709
|
|
710
|
Robert B. Trussell, Jr.
|
|
21,825
|
|
709
|
|
2,720
|
(a)
|
Reflects DSUs granted to members of the Board that have vested, but are still subject to the applicable deferral period required in the award agreement. Shares released upon satisfaction of the applicable deferral period and still held by the director are reflected in the Beneficial Ownership Table elsewhere in this Proxy Statement.
|
(5)
|
Mr. Rogers joined the Company's Board effective March 27, 2014. All cash and equity compensation he earned as a member of the Board is reflected in this Director Compensation Table. All compensation he earned as an executive officer of the Company prior to his retirement is reported in the Summary Compensation Table and the supplemental tables under the heading "Compensation of Executive Officers" elsewhere in this Proxy Statement.
|
|
|
2014
|
|
2013
|
||||
Audit fees
|
(1)
|
$
|
3,747
|
|
|
$
|
3,993
|
|
Audit-related fees
|
(2)
|
170
|
|
|
82
|
|
||
Tax fees
|
(3)
|
1,575
|
|
|
3,202
|
|
||
All other fees
|
|
—
|
|
|
—
|
|
||
Total
|
|
$
|
5,492
|
|
|
$
|
7,277
|
|
(1)
|
Audit fees for
2014
and
2013
relate to professional services provided in connection with the audit of our consolidated financial statements and internal control over financial reporting, the reviews of our quarterly financial statements and audit services provided in connection with other regulatory filings and the statutory audits of certain subsidiaries. The decrease in audit fees in 2014 principally relates to one-time audit fees in 2013 related to the Sealy Acquisition.
|
(2)
|
Audit-related fees for
2014
and
2013
comprise fees for professional services related to due diligence services for potential acquisitions. The increase in audit-related fees in 2014 principally relates to due diligence work for the disposition of the U.S. innerspring component production facilities and related equipment which was incurred in 2014.
|
(3)
|
Tax fees in
2014
and
2013
principally relate to professional services rendered in connection with domestic and international tax compliance, tax audits, and other international tax consulting and planning services. The decrease in tax fees in 2014 relates to one-time tax advisory services provided in 2013 in connection with the Sealy Acquisition.
|
|
Submitted by,
|
|
|
|
AUDIT COMMITTEE:
|
|
Frank Doyle (Chair)
|
|
Evelyn S. Dilsaver
|
|
Peter K. Hoffman
|
|
Sir Paul Judge
|
•
|
Provide its executive officers and members of senior management with an objective, annual variable compensation opportunity, which is paid only if performance meets or exceeds measurable financial and operational goals set in advance by the Compensation Committee or the Board;
|
•
|
Reward achievement of annual performance goals that directly support the success of the Company and the creation of long-term stockholder value;
|
•
|
Provide a competitive annual cash incentive compensation program that allows the Company to recruit and retain talented executive officers and senior managers, and
|
•
|
If it chooses to do so, create bonuses that would qualify as "qualified performance-based compensation" pursuant to Section 162(m) of the Code.
|
•
|
Debt reduction or cost reduction
|
•
|
Pre- or after-tax net earnings or earnings growth
|
•
|
Earnings before interest and taxes (EBIT) or EBIT margin
|
•
|
Earnings before interest and taxes, depreciation and amortization (EBITDA) or EBITDA margin
|
•
|
Price per share of stock
|
•
|
Return on capital
|
•
|
Earnings per share
|
•
|
Gross or net profit margin
|
•
|
Free cash flow
|
•
|
Market share
|
•
|
Return on net assets
|
•
|
Operating cash flow
|
•
|
Return on stockholders' equity
|
•
|
Operating earnings
|
•
|
Net sales or net sales growth
|
•
|
Stockholder returns
|
•
|
Stock price growth
|
|
|
•
|
Cost reduction initiatives
|
•
|
HR management metrics
|
•
|
Enhance financial planning process
|
•
|
Improve customer service metrics
|
•
|
Execution of Investor Relations plan
|
•
|
New product launches
|
•
|
Enhance new product pipeline
|
•
|
Expand slots per stores
|
•
|
Sales targets
|
•
|
Expand brand awareness
|
•
|
Improve brand equity
|
•
|
Strategic planning and growth initiatives
|
•
|
Gross and operating margin initiatives
|
|
|
•
|
The vast majority of our executives’ total compensation opportunity is in the form of incentive-based compensation, the majority of which is equity-based, tied to long-term performance objectives, and aligned with stockholder interests.
|
•
|
We require our executives to meet meaningful stock ownership and retention requirements.
|
•
|
We recently adopted a Clawback Policy providing that certain performance-based compensation is recoverable from specified officers, including the NEOs, if that officer has engaged in fraud, willful misconduct or gross negligence that directly caused or otherwise directly contributed to the need for a material restatement of the Company’s financial results.
|
•
|
We prohibit the hedging or pledging of Company securities by employees, executive officers and members of the Board.
|
•
|
We prohibit the re-pricing or exchange of stock options or stock appreciation rights without stockholder approval.
|
•
|
We provide minimal executive perquisites as described elsewhere in this Proxy Statement. Other than those benefits described, we do not provide additional perquisites or benefits to our NEOs that differ from those provided to other employees.
|
•
|
We do not provide tax "gross-ups" for any element of executive compensation, with the exception of the reimbursement of $373 of FICA taxes with respect to financial planning expenses incurred in 2013 by former executive officer Mr. Rogers under a legacy Sealy program which was eliminated for 2014. For additional information, see the "Summary Compensation Table" in this Proxy Statement.
|
Corporate Secretary
Tempur Sealy International, Inc.
1000 Tempur Way
Lexington, Kentucky 40511
|
•
|
providing written notice that is received by Tempur Sealy International’s Corporate Secretary between December 10, 2015 and January 9, 2016 (subject to adjustment if the date of the
2016
annual meeting is moved by more than 30 days, or delayed by more than 60 days, from the first anniversary date of the
2015
annual meeting, as provided in Article II, Section 2.12 of the By-Laws); and
|
•
|
supplying the additional information listed in Article II, Section 2.12 of the By-Laws.
|
|
By Order of the Board of Directors,
|
|
|
|
|
|
|
|
|
|
LOU H. JONES
|
|
Executive Vice President, General Counsel
|
|
and Secretary
|
|
Twelve months ended
December 31, 2014
(in millions)
|
||
Net income
|
$
|
108.9
|
|
Plus:
|
|
|
|
Interest expense
|
91.9
|
|
|
Income taxes
|
64.9
|
|
|
EBIT
|
$
|
265.7
|
|
|
|
|
|
Loss on disposal of business
(1)
|
$
|
23.2
|
|
Integration costs
(2)
|
42.5
|
|
|
Financing costs
(3)
|
1.3
|
|
|
Other income
(4)
|
(15.6
|
)
|
|
Adjusted EBIT
|
$
|
317.1
|
|
(1)
|
Loss on disposal of business represents costs associated with the disposition of the three U.S. innerspring component production facilities and related equipment.
|
(2)
|
Integration costs represent costs, including legal fees, professional fees and other charges to align the business related to the Sealy Acquisition.
|
(3)
|
Financing costs represent costs incurred in connection with the amendment of our 2012 Credit Agreement.
|
(4)
|
Other income includes certain other non-recurring items, including partial settlement of a legal dispute.
|
|
Twelve months ended
December 31, 2013
(in millions)
(1)
|
||
Net income
|
$
|
75.6
|
|
Plus:
|
|
|
|
Interest expense
|
133.2
|
|
|
Income taxes
|
39.0
|
|
|
EBIT
|
$
|
247.8
|
|
|
|
|
|
Transaction costs
(2)
|
$
|
25.2
|
|
Integration costs
(2)
|
15.3
|
|
|
Refinancing charges
(3)
|
2.4
|
|
|
Non-cash compensation
(4)
|
7.2
|
|
|
Restructuring and impairment related charges
(5)
|
7.8
|
|
|
Discontinued operations
(6)
|
0.6
|
|
|
Other
(7)
|
7.6
|
|
|
Adjusted EBIT
|
$
|
313.9
|
|
(1)
|
Includes the mathematical combination of the Company's historical financial results for the twelve months ended December 31, 2013 and Sealy's historical financial results for the pre-acquisition period from December 3, 2012 through March 3, 2013 (Sealy's last fiscal quarter prior to completion of the Sealy Acquisition). Results for Sealy for periods prior to the Sealy Acquisition do not give effect to any purchase accounting considerations. This methodology does not include all the pro forma adjustments that would be required under Regulation S-X, but is consistent with the requirements for calculating Adjusted EBITDA for covenant compliance purposes under the 2012 Credit Agreement.
|
(2)
|
Transaction and integration represent costs related to the Sealy Acquisition, including legal fees, professional fees and costs to align the businesses.
|
(3)
|
Refinancing charges represent costs associated with debt refinanced by Sealy prior to the Sealy Acquisition.
|
(4)
|
Non-cash compensation represents costs associated with various share-based awards by Sealy prior to the Sealy Acquisition and share based retention awards following the Sealy Acquisition.
|
(5)
|
Restructuring and impairment represent costs related to restructuring the Tempur Sealy business and asset impairment costs recognized by Sealy prior to the Sealy Acquisition.
|
(6)
|
Discontinued operations represent losses from Sealy's divested operations prior to the Sealy Acquisition.
|
(7)
|
Other represents the impact of an inventory step-up in connection with the Sealy Acquisition.
|
|
Twelve months ended
December 31, 2014
(in millions)
|
||
Net income
|
$
|
108.9
|
|
Plus:
|
|
|
|
Interest expense
|
91.9
|
|
|
Income taxes
|
64.9
|
|
|
Depreciation & amortization
|
89.7
|
|
|
EBITDA
|
$
|
355.4
|
|
|
|
|
|
Loss on disposal of business
(1)
|
$
|
23.2
|
|
Integration costs
(2)
|
40.3
|
|
|
Financing costs
(3)
|
1.3
|
|
|
Other income
(4)
|
(15.6
|
)
|
|
Adjusted EBITDA
|
$
|
404.6
|
|
(1)
|
Loss on disposal of business represents costs associated with the disposition of the three U.S. innerspring component production facilities and related equipment.
|
(2)
|
Integration costs represent costs, including legal fees, professional fees and other charges to align the business related to the Sealy Acquisition.
|
(3)
|
Financing costs represent costs incurred in connection with the amendment of our 2012 Credit Agreement.
|
(4)
|
Other income includes certain other non-recurring items, including partial settlement of a legal dispute.
|
|
Combined
(1)
Twelve months ended
December 31, 2013
(in millions)
|
||
Net income
|
$
|
75.6
|
|
Plus:
|
|
|
|
Interest expense
|
133.2
|
|
|
Income taxes
|
39.0
|
|
|
Depreciation & amortization
|
98.6
|
|
|
EBITDA
|
$
|
346.4
|
|
|
|
|
|
Transaction costs
(2)
|
$
|
25.2
|
|
Integration costs
(2)
|
15.3
|
|
|
Refinancing charges
(3)
|
2.4
|
|
|
Non-cash compensation
(4)
|
5.8
|
|
|
Restructuring and impairment related charges
(5)
|
7.8
|
|
|
Discontinued operations
(6)
|
0.6
|
|
|
Other
(7)
|
7.6
|
|
|
Adjusted EBITDA
|
$
|
411.1
|
|
(1)
|
Includes the mathematical combination of the Company's historical financial results for the twelve months ended December 31, 2013 and Sealy's historical financial results for the pre-acquisition period from December 3, 2012 through March 3, 2013 (Sealy's last fiscal quarter prior to completion of the Sealy Acquisition). Results for Sealy for periods prior to the Sealy Acquisition do not give effect to any purchase accounting considerations. This methodology does not include all the pro forma adjustments that would be required under Regulation S-X, but is consistent with the requirements for calculating Adjusted EBITDA for covenant compliance purposes under the 2012 Credit Agreement.
|
(2)
|
Transaction and integration represent costs related to the Sealy Acquisition, including legal fees, professional fees and costs to align the businesses.
|
(3)
|
Refinancing charges represent costs associated with debt refinanced by Sealy prior to the Sealy Acquisition.
|
(4)
|
Non-cash compensation represents costs associated with various share-based awards by Sealy prior to the Sealy Acquisition.
|
(5)
|
Restructuring and impairment represent costs related to restructuring the Tempur Sealy business and asset impairment costs recognized by Sealy prior to the Sealy Acquisition.
|
(6)
|
Discontinued operations represent losses from Sealy's divested operations prior to the Sealy Acquisition.
|
(7)
|
Other represents the impact of an inventory step-up in connection with the Sealy Acquisition.
|
(in millions)
|
As of December 31, 2014
|
||
Total debt
|
$
|
1,602.3
|
|
Plus:
|
|
||
Letters of credit outstanding
|
18.2
|
|
|
Consolidated funded debt
|
1,620.5
|
|
|
Less:
|
|
||
Domestic qualified cash
(1)
|
25.9
|
|
|
Foreign qualified cash
(1)
|
21.9
|
|
|
Consolidated funded debt less qualified cash
|
$
|
1,572.7
|
|
(1)
|
Qualified cash as defined in our 2012 Credit Agreement equals 100.0% of unrestricted domestic cash plus 60.0% of unrestricted foreign cash. For purposes of calculating leverage ratios, qualified cash is capped at $150.0 million.
|
(in millions, except ratio)
|
As of December 31, 2014
|
|
|||
Consolidated funded debt less qualified cash
|
$
|
1,572.7
|
|
|
|
Adjusted EBITDA
|
404.6
|
|
|
||
|
3.89
|
times
|
(1
|
)
|
(1)
|
The ratio of consolidated debt less qualified cash to Adjusted EBITDA was 3.89 times, within the covenant in our 2012 Credit Agreement, which requires this ratio be less than 4.75 times at December 31, 2014.
|
(in millions, except per share amounts)
|
Year Ended December 31, 2014
(6)
|
|
Year Ended December 31, 2013
(6)
|
||||
Net income
|
$
|
108.9
|
|
|
$
|
78.6
|
|
Plus:
|
|
|
|
||||
Loss on disposal of business, net of tax
(1)
|
16.7
|
|
|
—
|
|
||
Transaction costs, net of tax
(2)
|
—
|
|
|
13.2
|
|
||
Integration costs, net of tax
(2)
|
30.6
|
|
|
37.2
|
|
||
Financing costs, net of tax
(3)
|
3.4
|
|
|
6.5
|
|
||
Other income, net of tax
(4)
|
(11.3
|
)
|
|
—
|
|
||
Adjustment of taxes to normalized rate
(5)
|
16.3
|
|
|
10.9
|
|
||
Adjusted net income
|
$
|
164.6
|
|
|
$
|
146.4
|
|
|
|
|
|
||||
Earnings per share, diluted
|
$
|
1.75
|
|
|
$
|
1.28
|
|
Loss on disposal of business, net of tax
(1)
|
0.27
|
|
|
—
|
|
||
Transaction costs, net of tax
(2)
|
—
|
|
|
0.21
|
|
||
Integration costs, net of tax
(2)
|
0.49
|
|
|
0.60
|
|
||
Financing costs, net of tax
(3)
|
0.05
|
|
|
0.11
|
|
||
Other income, net of tax
(4)
|
(0.18
|
)
|
|
—
|
|
||
Adjustment of taxes to normalized rate
(5)
|
0.27
|
|
|
0.18
|
|
||
Adjusted earnings per share, diluted
|
$
|
2.65
|
|
|
$
|
2.38
|
|
|
|
|
|
||||
Diluted shares outstanding
|
62.1
|
|
|
61.6
|
|
(1)
|
Loss on disposal of business represents costs associated with the disposition of the three U.S. innerspring component facilities and related equipment.
|
(2)
|
Transaction and integration represents costs, including legal fees, professional fees and other charges to align the businesses related to the Sealy Acquisition.
|
(3)
|
Financing costs represent costs incurred in connection with the amendment and refinancing of our 2012 Credit Agreement in 2014 and 2013, respectively.
|
(4)
|
Other income includes certain other non-recurring items, including a partial settlement of a legal dispute.
|
(5)
|
Adjustment of taxes to normalized rate represents adjustments associated with the aforementioned items and other discrete income tax events.
|
(6)
|
Results for 2013 includes Sealy operations from March 18, 2013 through December 31, 2013. Results for 2014 include Sealy operations for the full year, and as a result information may not be comparable.
|
(in millions)
|
Year Ended December 31, 2014
(1)
|
|
Year Ended December 31, 2013
(1)
|
||||
Net cash provided by operating activities
|
$
|
225.2
|
|
|
$
|
98.5
|
|
Purchases of property, plant and equipment
|
(47.5
|
)
|
|
(40.0
|
)
|
||
Free Cash Flow
|
$
|
177.7
|
|
|
$
|
58.5
|
|
(1)
|
Results for 2013 includes Sealy results of operations from March 18, 2013 through December 31, 2013. Results for 2014 include Sealy operations for the full year, and as a result information may not be comparable.
|
•
|
Debt reduction or cost reduction
|
•
|
Pre- or after-tax net earnings or earnings growth
|
•
|
Earnings before interest and taxes (EBIT) or EBIT margin
|
•
|
Earnings before interest and taxes, depreciation and amortization (EBITDA) or EBITDA margin
|
•
|
Price per share of stock
|
•
|
Return on capital
|
•
|
Earnings per share
|
•
|
Gross or net profit margin
|
•
|
Free cash flow
|
•
|
Market share
|
•
|
Return on net assets
|
•
|
Operating cash flow
|
•
|
Return on stockholders' equity
|
•
|
Operating earnings
|
•
|
Net sales or net sales growth
|
•
|
Stockholder returns
|
•
|
Stock price growth
|
|
|
•
|
Cost reduction initiatives
|
•
|
HR management metrics
|
•
|
Enhance financial planning process
|
•
|
Improve customer service metrics
|
•
|
Execution of Investor Relations plan
|
•
|
New product launches
|
•
|
Enhance new product pipeline
|
•
|
Expand slots per stores
|
•
|
Sales targets
|
•
|
Expand brand awareness
|
•
|
Improve brand equity
|
•
|
Strategic planning and growth initiatives
|
•
|
Gross and operating margin initiatives
|
|
|
•
|
the Target Bonus for such Senior Executive, expressed as a percentage of his or her base salary;
|
•
|
whether there will be Company Goals for the Performance Period, and the type of Company Goals that will apply;
|
•
|
for each Senior Executive, whether there will be Individual Goals for that Senior Executive;
|
•
|
the relative weighting between Company Goals and Individual Goals for any Senior Executive;
|
•
|
any maximum or minimum payout with respect to any of the Company Goals or Individual Goals;
|
•
|
whether any component of the Bonus is intended to qualify as Qualified Performance-Based Compensation; and
|
•
|
any other terms applicable to the Bonuses for any Senior Executives for that Performance Period.
|