Exhibit 10.1

EMPLOYMENT AND NON-COMPETITION AGREEMENT

(Scott Thompson)

THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (the “Agreement”) is executed as
of this 4th day of September, 2015 (referred to as the “Effective Date” or the
“Date of Hire”), by and between Tempur Sealy International Inc., a Delaware
corporation (the “Company”), and Scott Thompson, an individual (“Employee”).

In consideration of the mutual agreements and covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the Company and Employee, it is hereby agreed as
follows:

ARTICLE I

EMPLOYMENT

1.1 Term of Employment. Effective as of the Date of Hire, the Company agrees to
employ Employee as an employee of the Company and as the Chairman, Chief
Executive Officer and President of the Company as further set forth in
Section 1.2, and Employee accepts employment by the Company, for the period
commencing on the Date of Hire and ending on December 31, 2018 (the “Initial
Term”), subject to earlier termination as set forth in Article III below. Unless
earlier terminated in accordance with Article III, following the expiration of
the Initial Term, this Agreement shall be automatically renewed for successive
one-year periods (collectively, the “Renewal Terms”; individually, a “Renewal
Term”) unless, at least one hundred and twenty (120) days prior to the
expiration of the Initial Term or the then current Renewal Term, either party
provides the other party with a written notice of intention not to renew, in
which case the Employee’s employment with the Company, and the Company’s
obligations hereunder, shall terminate as of the end of the Initial Term or said
Renewal Term, as applicable. Except as otherwise expressly provided herein, the
terms and conditions of this Agreement during any Renewal Term shall be the same
as the terms in effect immediately prior to such renewal, subject to any such
changes or modifications as mutually may be agreed between the parties as
evidenced in a written instrument signed by both the Company and Employee.

1.2 Position and Duties.

(a) From the Date of Hire through September 7, 2015 (the “Transition Period”),
Employee shall be employed as an employee of the Company. In his capacity as an
employee, Employee shall be subject to the authority of, and shall report to,
the Company’s Board of Directors. During the Transition Period, Employee shall
be engaged in transition activities with respect to the assumption of the
Chairman, Chief Executive Officer and President positions. On the Effective Date
the Employee shall be appointed to the Board of Directors.

(b) Effective on the day after the Transition Period, Employee shall be employed
in the position of Chief Executive Officer and President. In such capacity,
Employee shall be subject to the authority of, and shall report to, the
Company’s Board of Directors. Employee shall devote Employee’s entire business
time, loyalty, attention and energies exclusively to the business interests of
the

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Company while employed by the Company, and shall perform his duties and
responsibilities diligently and to the best of his ability. Effective on the day
after the Transition Period, Employee shall be elected by the Board of Directors
as Chairman. In addition, the Company shall nominate Employee to serve as a
director in connection with any annual or special meeting of stockholders at
which stockholders will vote on the election of directors and, if elected as a
director, the Board will elect Employee as Chairman.

(c) The Company may choose to have Employee be classified as an employee of a
subsidiary of the Company consistent with other members of management, and such
treatment will be treated for purposes of this Agreement as employment by the
Company, and will not relieve the Company of any of its obligations under this
Agreement.

ARTICLE II

COMPENSATION AND OTHER BENEFITS

2.1 Base Salary. The Company shall pay Employee an annual salary of $1,100,000
(“Base Salary”), payable in accordance with the normal payroll practices of the
Company. Employee’s Base Salary will be reviewed and be subject to adjustment by
the Board of Directors or its Compensation Committee at their discretion each
fiscal year in accordance with the Company’s annual review policy, commencing
with the fiscal year 2017.

2.2 Bonuses. (a) Employee will be eligible to earn an annual performance-based
bonus based on a formula approved by the Company’s Board of Directors or its
Compensation Committee and incorporated herein by this reference for the full or
pro rata portion of any fiscal year after 2015 during which Employee is employed
by the Company (a “Bonus Year”), the terms and conditions of which, as well as
Employee’s entitlement thereto, shall be determined annually in the sole
discretion of the Company’s Board of Directors or its Compensation Committee
(the “Performance Bonus”). The amount of the Performance Bonus will vary based
on the pro rata portion or full portion of the applicable Bonus Year during
which Employee is employed by the Company and the achievement of individual or
Company performance criteria in the formula established by the Company’s Board
of Directors or Compensation Committee. The formula will be set to target a
Performance Bonus equal to 125% of Base Salary as of the earlier of the date the
Target Bonus terms are approved by the Board and March 25 of such year (the
“Target Bonus”) if the performance criteria in the formula are met, and the
actual bonus awarded based on the performance criteria may be more or less than
the Target Bonus, but not more than 200% of the Target Bonus. Any Performance
Bonus due with respect to a Bonus Year will be paid on or before March 15 of the
following calendar year.

(b) For 2015, the Company will pay a bonus to Employee in the amount of $458,000
(the “2015 Bonus”), representing a pro rata portion of 125% of his Base Salary
payable for 2015. This 2015 Bonus will be paid on or before March 15, 2016.

(c) The Company agrees to pay the Employee a cash signing bonus in the amount of
$1.6 million, on or before September 15, 2015 (the “Signing Bonus”). The
Employee agrees that if prior to December 31, 2017 the Employee voluntarily
terminates his employment, but not for Good Reason pursuant to Section 3.1(b),
then within fifteen (15) days after such termination he will repay to the
Company a pro rata portion of the Signing Bonus, in the amount of $60,000 for
each full month remaining in the period between the date of his termination and
December 31, 2017.

 

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2.3 Grants and Purchases of Equity.

(a) Grant of Stock Options. On the Date of Hire, the Company will grant Employee
non-qualified options to purchase 310,000 shares of the Company’s Common Stock,
par value $.01 per share (the “Common Stock”), pursuant to the form of stock
option agreement attached as Exhibit A to this Agreement, with the grant price
set at the fair market value on the date of grant and subject to vesting in
three equal annual installments (the “2015 Option Agreement”).

(b) Subscription Agreement. The Employee and the Company will on the Date of
Hire enter into a Subscription Agreement in the form of Exhibit B hereto (the
“Subscription Agreement”) pursuant to which the Employee will agree to purchase,
and the Company will agree to sell, 69,686 shares of Common Stock (the
“Purchased Shares”) at a price per share of $71.75 (representing the closing
price of the Common Stock on the New York Stock Exchange on the last trading day
prior to the date of this Agreement).

(c) Stock Purchase Matching PRSU Award. As additional consideration for
Employee’s agreement to accept employment with the Company, on the Date of Hire
the Company will issue Employee performance restricted stock units (“Matching
PRSUs”) representing the total number of shares of the Company’s Common Stock,
par value $.01 per share (“Common Stock”), that Employee commits to purchase
pursuant to the Subscription Agreement. The Matching PRSUs will be issued
pursuant to a Restricted Stock Unit Agreement in the form of Exhibit C hereto
(the “Matching PRSU Agreement”) and vest over the next three (3) years in annual
installments, subject to meeting the performance metric set forth in the
Matching PRSU Agreement.

(d) Project 650 Grant. On the Date of Hire, the Company will grant Employee
performance restricted stock units for 620,000 shares of the Company’s Common
Stock pursuant to the form of Performance Restricted Stock Unit Agreement
attached as Exhibit D to this Agreement (the “Project 650 PRSU Agreement”).

(e) On the Date of Hire, the Company will issue Employee restricted stock units
(“Base RSUs”) for 118,000 shares of the Company’s Common Stock pursuant to the
Restricted Stock Unit Agreement attached as Exhibit E to this Agreement (the
“Base RSU Agreement”).

(f) The Company anticipates that commencing in 2017 Employee will be considered
for future equity awards in accordance with the Company’s normal executive
compensation practices, but the timing, amount and terms of any such future
grants will be subject to the discretion of the Board of Directors or the
Compensation Committee.

2.4 Benefit Plans. Employee will be eligible to participate in the Company’s
retirement plans that are qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended (the “Code”), and in the Company’s employee welfare
benefit plans that are generally applicable to all executive employees of the
Company (the “Plans”), in accordance with the terms and

 

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conditions thereof. A summary of the Company’s Plans applicable to senior
executives as currently in effect has been provided to Employee. In any event,
the terms and conditions of the Plans, as expressed in the Plan documents, will
control including, but not limited to the Company’s ability to amend, modify or
terminate any of those programs as it determines appropriate in accordance with
the Plans’ terms.

2.5 Expenses. The Company shall reimburse Employee for all expenses reasonably
incurred in the course of the performance of Employee’s duties and
responsibilities pursuant to this Agreement and consistent with the Company’s
policies with respect to travel, entertainment and miscellaneous expenses, and
the requirements with respect to the reporting of such expenses.

2.6 Financial Planning. Employee shall be eligible to participate in the
Company’s executive financial planning program which provides reimbursement of
financial planning expenses to eligible executives in accordance with the terms
of the program.

2.7 Vacation. Employee shall be entitled to vacation in any calendar year in
accordance with the Company’s general vacation policies for senior executive
employees.

2.8 Residence and Commuting.

(a) The Company will reimburse the Employee for reasonable temporary housing
costs in Lexington through December 31, 2015. Employee agrees that he will
maintain a secondary residence in Lexington, Kentucky commencing on or before
December 31, 2015. The Employee agrees that he will relocate and establish
Lexington, Kentucky as his primary residence by December 31, 2017. The Company
agrees to reimburse the Employee for his reasonable relocation costs in
accordance with the Company’s relocation policy for senior executives. A copy of
the Company’s current policy has been provided to the Employee.

(b) The Employee will be responsible for the cost of commuting between his
primary residence and Lexington until he relocates to Lexington as described
above.

2.9 Withholding. All payments to be made by the Company hereunder will be
subject to any withholding requirements.

2.10 Application of Policies. Employee acknowledges receipt of copies of the
Company’s Policy on Insider Trading and Confidentiality, Code of Business
Conduct and Ethics, Stock Ownership Guidelines and Clawback Policy, and
acknowledges that he is subject to the provisions of each such document.
Employee further acknowledges and agrees that all amounts paid hereunder and any
equity awards granted pursuant to this Agreement will be subject to the terms of
the Clawback Policy, and any amended clawback policy or replacement clawback
policy adopted by the Board of Directors from time to time.

 

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ARTICLE III

TERMINATION

3.1 Right to Terminate; Automatic Termination.

(a) Termination by Company Without Cause. Subject to Section 3.2, the Company
may terminate Employee’s employment and all of the Company’s future obligations
under this Agreement at any time and for any reason.

(b) Termination by Employee for Good Reason. Subject to Section 3.2, Employee
may terminate his employment obligation hereunder (but not his obligations under
Article IV hereof) for “Good Reason” (as hereinafter defined) if Employee gives
written notice thereof to the Company within thirty (30) days of the event he
deems to constitute Good Reason (which notice shall specify the grounds upon
which such notice is given) and the Company fails, within thirty (30) days of
receipt of such notice, to cure or rectify the grounds for such Good Reason
termination set forth in such notice. If the Company fails to cure or rectify
the grounds for such Good Reason termination set forth in the notice provided
above within thirty (30) days of receipt of such notice, then Employee may
terminate his employment under this Section 3.1(b) any time within thirty
(30) days following such failure. “Good Reason” shall mean any of the following:
(i) relocation of Employee’s principal workplace over sixty (60) miles from the
Company’s existing workplaces without the consent of Employee (which consent
shall not be unreasonably withheld, delayed or conditioned), (ii) after the
Transition Period, Employee is demoted from the position of Chief Executive
Officer or President of the Company, (iii) after the Transition Period, a
material diminution in the Employee’s authority, duties or responsibilities as
Chief Executive Officer and President of the Company, (iv) the Company fails to
nominate Employee to serve as a director in connection with any annual or
special meeting of stockholders at which stockholders will vote on the election
of directors or, if elected as a director, the Board fails to elect the Employee
as Chairman, or (v) the Company’s material breach of this Agreement which is not
cured within thirty (30) days after receipt by the Company from Employee of
written notice of such breach.

(c) Termination by Company For Cause. Subject to Section 3.2, the Company may
terminate Employee’s employment and all of the Company’s obligations under this
Agreement at any time “For Cause” (as defined below) by giving notice to
Employee stating the basis for such termination, effective immediately upon
giving such notice or at such other time thereafter as the Company may
designate. “For Cause” shall mean any of the following: (i) Employee’s willful
and continued failure to substantially perform the reasonably assigned duties
with the Company which are consistent with Employee’s position and job
description referred to in this Agreement, other than any such failure resulting
from incapacity due to physical or mental illness, after a written notice is
delivered to Employee by the Board of Directors of the Company which
specifically identifies the manner in which Employee has not substantially
performed the assigned duties and allowing Employee thirty (30) days after
receipt by Employee of such notice to cure such failure to perform,
(ii) material breach of this Agreement or any other written agreement between
Employee and the Company which is not cured within thirty (30) days after
receipt by Employee from the Company of written notice of such breach, (iii) any
material violation of any material written policy of the Company,
(iv) Employee’s willful misconduct which is

 

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materially and demonstrably injurious to the Company, (v) Employee’s conviction
by a court of competent jurisdiction of, or his pleading guilty or nolo
contendere to, any felony, or (vi) Employee’s commission of an act of fraud,
embezzlement, or misappropriation against the Company or any breach of fiduciary
duty or breach of the duty of loyalty, including, but not limited to, the offer,
payment, solicitation or acceptance of any unlawful bribe or kickback with
respect to the Company’s business. For purposes of this paragraph, no act, or
failure to act, on Employee’s part shall be considered “willful” unless done, or
omitted to be done, in knowing bad faith and without reasonable belief that the
action or omission was in, or not opposed to, the best interests of the Company.
Any act, or failure to act expressly authorized by a resolution duly adopted by
the Board of Directors or based upon the written advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, in
good faith and in the best interests of the Company. Notwithstanding the
foregoing, Employee shall not be deemed to have been terminated For Cause unless
and until there shall have been delivered to Employee a copy of a resolution,
duly adopted by the Board of Directors at a meeting of the Board called and held
for such purpose (after reasonable notice to Employee and an opportunity for
Employee, together with Employee’s counsel, to be heard before the Board at a
duly called meeting at which a quorum is present), finding that in the good
faith opinion of the Board of Directors Employee committed the conduct set forth
above in (i), (ii), (iii), (iv), (v) or (vi) of this Section 3.1(c) and
specifying the particulars thereof in detail.

(d) Termination Upon Death or Disability. Subject to Section 3.2, Employee’s
employment and the Company’s obligations under this Agreement shall terminate:
(i) automatically, effective immediately and without any notice being necessary,
upon Employee’s death; and (ii) in the event of the disability of Employee, by
the Company giving notice of termination to Employee. For purposes of this
Agreement, “disability” means the inability of Employee, due to a physical or
mental impairment, for ninety (90) days (whether or not consecutive) during any
period of three hundred sixty (360) days, to perform, with reasonable
accommodation, the essential functions of the work contemplated by this
Agreement. In the event of any dispute as to whether Employee is disabled, the
matter shall be determined by the Company’s Board of Directors in consultation
with a physician selected by the Company’s health or disability insurer or
another physician mutually satisfactory to the Company and Employee. Employee
shall cooperate with the efforts to make such determination or be subject to
immediate discharge. Any such determination shall be conclusive and binding on
the parties. Any determination of disability under this Section 3.1 is not
intended to alter any benefits any party may be entitled to receive under any
long-term disability insurance policy carried by either the Company or Employee
with respect to Employee, which benefits shall be governed solely by the terms
of any such insurance policy. Nothing in this subsection shall be construed as
limiting or altering any of Employee’s rights under State workers compensation
laws or State or federal Family and Medical Leave laws.

3.2 Rights Upon Termination.

(a) Section 3.1(a) (Termination by the Company Without Cause) and 3.1(b)
(Termination by the Employee for Good Reason) Terminations. If Employee’s
employment terminates pursuant to Section 3.1(a) or 3.1(b) hereof, Employee
shall have no further rights against the Company hereunder, except for the right
to receive, subject to execution of a release and waiver in the form

 

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customarily used by the Company in connection with the termination of other
similarly situated senior executives (“Release and Waiver”) in the case of
clauses (ii) - (iv) and (vi) below, (i) any earned but unpaid Base Salary and
the value of any accrued but unused vacation, (ii) payment of Base Salary for a
period of two (2) years from the effective date of termination (the “Severance
Period”), payable in accordance with the normal payroll practices of the Company
and reduced by any salary continuation benefit paid under any of the Plans
maintained pursuant to Section 2.4, (iii) (x) any previously earned Performance
Bonus for a prior Bonus Year that has not been paid, and in the event of any
termination after December 31, 2015 any 2015 Bonus that has not been paid, and
(y) any annual Performance Bonus or 2015 Bonus due for the calendar year of such
termination pursuant to Section 2.2, prorated based on the number of days
Employee was actively employed by the Company during such year (or in the case
of the 2015 Bonus, the period from the Date of Hire through December 31, 2015),
payable at the time such Performance Bonus or 2015 Bonus would otherwise be paid
in accordance with such Section 2.2, (iv) continued participation in the Plans
pursuant to Section 2.4 for the duration of the Severance Period to the extent
such continued participation is permitted under the terms of the Plans and to
the extent such participation is not permitted a cash payment of substantially
similar value (without requiring any additional payments to address the
taxability of this payment), (v) reimbursement of expenses to which Employee is
otherwise entitled under Sections 2.4, 2.5 or 2.8 hereof, and (vi) whatever
rights as to stock options or other equity awards the Employee may have pursuant
to the 2015 Option Agreement, the Matching PRSU Agreement, the Project 650 PRSU
Agreement or the Base RSU Agreement or any other stock option agreements or
other equity award agreements with the Company.

(b) Section 3.1(c) (Termination by Company for Cause) and 3.1(d) (Termination
upon Death or Disability) Terminations; Voluntary Termination by Employee not
for Good Reason. If Employee’s employment is terminated pursuant to Sections
3.1(c) or 3.1(d) hereof, or if Employee quits employment (other than for Good
Reason) notwithstanding the terms of this Agreement, Employee or Employee’s
estate shall have no further rights against the Company hereunder, except for
the right to receive, subject to execution of a Release and Waiver in the case
of clauses (iii), (x), (y) and (z) below, (i) any earned but unpaid Base Salary
and the value of any accrued but unused vacation, (ii) reimbursement of expenses
to which Employee is entitled under Sections 2.4, 2.5 or 2.8 hereof, and
(iii) in the case of a termination pursuant to Section 3.1(d) hereof, (x) any
previously earned Performance Bonus for a prior Bonus Year, or any 2015 Bonus,
which has not been paid, (y) any annual Performance Bonus or 2015 Bonus due for
the calendar year of such termination pursuant to Section 2.2, prorated based on
the number of days Employee was actively employed by the Company during such
year (or in the case of the 2015 Bonus, the period from the Date of Hire through
December 31, 2015), payable at the time the such Performance Bonus or 2015 Bonus
would otherwise be paid in accordance with such Section 2.2, and (z) whatever
rights as to stock options or other equity awards Employee may have pursuant to
the 2015 Option Agreement, the Matching PRSU Agreement, the Project 650 PRSU
Agreement, Base RSU Agreement or any other stock option agreements or other
equity award agreements with the Company.

(c) Non-Renewal. In the event that the Company elects not to renew the term of
this Agreement as provided in Section 1.1, or if Employee elects not to renew
the term of this Agreement as provided in Section 1.1, then Employee shall have
no

 

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further rights against the Company hereunder, except for the right to receive,
subject to execution of a Release and Waiver in the case of clauses (iii), (x),
(y) and (z) below, (i) any earned but unpaid Base Salary and the value of any
accrued but unused vacation, (ii) reimbursement of expenses to which Employee is
entitled under Sections 2.4, 2.5 or 2.8 hereof, and (iii) (x) any previously
earned Performance Bonus for a prior Bonus Year which has not been paid, (y) any
annual Performance Bonus due for the calendar year in which the non-renewal
occurs, prorated based on the number of days Employee was actively employed by
the Company during such year, payable at the time the such Performance Bonus
would otherwise be paid in accordance with such Section 2.2, and (z) whatever
rights as to stock options or other equity awards Employee may have pursuant to
the 2015 Option Agreement, the Matching PRSU Agreement, the Project 650 PRSU
Agreement, Base RSU Agreement or any other stock option agreements or other
equity award agreements with the Company.

(d) The Release and Waiver described in Sections 3.2(a), (b) and (c) shall be
delivered to Employee on or before the fourteenth (14th) day following
separation from employment with the Company. In addition and notwithstanding the
foregoing provisions of this Section 3.2, if the Release and Waiver described in
Section 3.2(a), 3.2(b) or 3.2(c), as applicable, has been delivered to Employee
within fourteen (14) days following separation from employment but has not been
executed and delivered and become irrevocable on or before the end of the sixty
(60) day period following Employee’s termination of employment with the Company,
no severance benefits under Section 3.2(a)(ii)-(iv) and (vi) or
Section 3.2(b)(iii), (x), (y) and (z) or Section 3.2(c)(iii) (x), (y) and (z),
as applicable, shall be or become payable. Further, to the extent that (A) such
termination of employment occurs within sixth (60) days of the end of any
calendar year, and (B) any of such severance benefits constitute “nonqualified
deferred compensation” for purposes of Section 409A of the Code, any payment of
any amount or provision of any benefit otherwise scheduled to occur prior to the
sixtieth (60th) day following the date of Employee’s termination of employment
hereunder, but for the condition on executing the severance release as set forth
herein, shall be made (or commence being made) on the later of January 15th of
the next calendar year following termination of employment or the date such
release and waiver is delivered and has become irrevocable, after which any
remaining severance benefits shall thereafter be provided to Employee without
interest according to the applicable schedule set forth herein.

ARTICLE IV

CONFIDENTIALITY; NON-COMPETITION; NON-SOLICITATION

4.1 Covenants Regarding Confidential Information, Trade Secrets and Other
Matters. Employee covenants and agrees as follows:

(a) Definitions. For purposes of this Agreement, the following terms are defined
as follows:

(1) “Trade Secret” means all information possessed by or developed for the
Company or any of its subsidiaries, including, without limitation, a
compilation, program, device, method, system, technique or process, to which all
of the following apply: (i) the information derives independent economic value,
actual or potential, from not being generally known to, and

 

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not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use and (ii) the information is the
subject of efforts to maintain its secrecy that are reasonable under the
circumstances.

(2) “Confidential Information” means information, to the extent it is not a
Trade Secret, which is possessed by or developed for the Company or any of its
subsidiaries and which relates to the Company’s or any of its subsidiaries’
existing or potential business or technology, which information is generally not
known to the public and which information the Company or any of its subsidiaries
seeks to protect from disclosure to its existing or potential competitors or
others, including, without limitation, for example: business plans, strategies,
existing or proposed bids, costs, technical developments, existing or proposed
research projects, financial or business projections, investments, marketing
plans, negotiation strategies, training information and materials, information
generated for client engagements and information stored or developed for use in
or with computers. Confidential Information also includes information received
by the Company or any of its subsidiaries from others which the Company or any
of its subsidiaries has an obligation to treat as confidential.

(b) Nondisclosure of Confidential Information. Except as required in the conduct
of the Company’s or any of its subsidiaries’ business or as expressly authorized
in writing on behalf of the Company or any of its subsidiaries, Employee shall
not use or disclose, directly or indirectly, any Confidential Information during
the period of his employment with the Company. In addition, following the
termination for any reason of Employee’s employment with the Company, Employee
shall not use or disclose, directly or indirectly, any Confidential Information.
This prohibition does not apply to Confidential Information after it has become
generally known in the industry in which the Company conducts its business. This
prohibition also does not prohibit Employee’s use of general skills and know-how
acquired during and prior to employment by the Company, as long as such use does
not involve the use or disclosure of Confidential Information or Trade Secrets.

(c) Trade Secrets. During Employee’s employment by the Company, Employee shall
do what is reasonably necessary to prevent unauthorized misappropriation or
disclosure and threatened misappropriation or disclosure of the Company’s or any
of its subsidiaries’ Trade Secrets and, after termination of employment,
Employee shall not use or disclose the Company’s or any of its subsidiaries’
Trade Secrets as long as they remain, without misappropriation, Trade Secrets.

(d) Copyright. All copyrightable work by Employee relating to the Company’s
business or the business of any subsidiary or affiliate of the Company during
the term of Employee’s employment by the Company is intended to be “work made
for hire” as defined in Section 101 of the Copyright Act of 1976, and shall be
the property of the Company. If the copyright to any such copyrightable work is
not the property of the Company by operation of law, Employee will, without
further consideration, assign to the Company all right, title and interest in
such copyrightable work and will assist the Company and its nominee in every
way, at the Company’s expense, to secure, maintain and defend for the Company’s
benefit, copyrights and any extensions and renewals thereof on any and all such
work including translations thereof in any and all countries, such work to be
and remain the property of the Company whether copyrighted or not.

 

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(e) Exceptions. The provisions of paragraphs (b) and (c) above will not be
deemed to prohibit any disclosure that is required by law or court order,
provided that Employee has not intentionally taken actions to trigger such
required disclosure and the Company is given reasonable prior notice and an
opportunity to contest or minimize such disclosure.

4.2 Non-Competition.

(a) During Employment. During Employee’s employment hereunder, Employee shall
not engage, directly or indirectly, as an employee, officer, director, partner,
manager, consultant, agent, owner (other than a minority shareholder or other
equity interest of not more than 1% of a company whose equity interests are
publicly traded on a nationally recognized stock exchange or over-the-counter)
or in any other capacity, in any competition with the Company or any of its
subsidiaries.

(b) Subsequent to Employment. For a two (2) year period following the
termination of Employee’s employment for any reason or without reason, Employee
shall not in any capacity (whether in the capacity as an employee, officer,
director, partner, manager, consultant, agent or owner (other than a minority
shareholder or other equity interest of not more than 1% of a company whose
equity interests are publicly traded on a nationally recognized stock exchange
or over-the-counter)), directly or indirectly advise, manage, render or perform
services to or for (i) any person or entity which is engaged in a business
competitive to that of the Company or any of its subsidiaries (including without
limitation those businesses listed in Appendix A to the form of 2015 Option
Agreement attached hereto as Exhibit B) within any geographical location wherein
the Company or any of its subsidiaries produces, sells or markets its goods and
services at the time of such termination or within a one-year period prior to
such termination or (ii) any Significant Retailer. For purposes of this
Agreement, “Significant Retailer” means those retailers identified in Exhibit B
under the heading “RETAILERS.” Employee acknowledges that the Significant
Retailers may now or in the future compete directly or indirectly with the
Company, and that, whether or not a Significant Retailer competes directly with
the Company, the Employee because of his knowledge of the industry and his
knowledge of confidential information about the Company’s commercial
relationships with many large retailers, including one or more of the
Significant Retailers, could damage the Company’s competitive position and
business if he worked with a Significant Retailer in any of the capacities
described above.

4.3 Non-Solicitation. For a two (2) year period following the termination of
Employee’s employment for any reason or without reason, Employee shall not
solicit or induce any person who was an employee of the Company or any of its
subsidiaries on the date of Employee’s termination, or within three (3) months
prior to leaving his or her employment with the Company or any of its
subsidiaries, to leave the employ of the Company or its subsidiaries.

4.4 Return of Documents. Immediately upon termination of employment, Employee
will return to the Company, and so certify in writing to the Company, all the
Company’s or any of its subsidiaries’ papers, documents and things, including
information

 

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stored for use in or with computers and software applicable to the Company’s and
its subsidiaries’ business (and all copies thereof), which are in Employee’s
possession or under Employee’s control, regardless whether such papers,
documents or things contain Confidential Information or Trade Secrets.

4.5 No Conflicts. To the extent that they exist, Employee will not disclose to
the Company or any of its subsidiaries any of Employee’s previous employer’s
confidential information or trade secrets. Further, Employee represents and
warrants that Employee has not previously assumed any obligations inconsistent
with those of this Agreement and that employment by the Company does not
conflict with any prior obligations to third parties. In addition, Employee and
the Company agree that it is important for any prospective employer to be aware
of this Agreement, so that disputes concerning this Agreement can be avoided in
the future. Therefore, Employee agrees that, following termination of employment
with the Company, the Company may forward a copy of Article IV of this Agreement
(and any related Exhibits hereto) to any future prospective or actual employer,
and Employee releases the Company from any claimed liability or damage caused to
Employee by virtue of the Company’s act in making that prospective or actual
employer aware of Article IV of this Agreement (and any related Exhibits
hereto).

4.6 Agreement on Fairness. Employee acknowledges that: (i) this Agreement has
been specifically bargained between the parties and reviewed by Employee,
(ii) Employee has had an opportunity to obtain legal counsel to review this
Agreement, and (iii) the covenants made by and duties imposed upon Employee
hereby are fair, reasonable and minimally necessary to protect the legitimate
business interests of the Company, and such covenants and duties will not place
an undue burden upon Employee’s livelihood in the event of termination of
Employee’s employment by the Company and the strict enforcement of the covenants
contained herein.

4.7 Equitable Relief and Remedies. Employee acknowledges that any breach of this
Agreement will cause substantial and irreparable harm to the Company for which
money damages would be an inadequate remedy. Accordingly, notwithstanding the
provisions of Article V below, the Company shall in any such event be entitled
to obtain injunctive and other forms of equitable relief to prevent such breach
and the prevailing party shall be entitled to recover from the other, the
prevailing party’s costs (including, without limitation, reasonable attorneys’
fees) incurred in connection with enforcing this Agreement, in addition to any
other rights or remedies available at law, in equity, by statute or pursuant to
Article V below.

ARTICLE V

AGREEMENT TO SUBMIT ALL EXISTING OR FUTURE DISPUTES

TO BINDING ARBITRATION

The Company and Employee agree that any controversy or claim arising out of or
related to this Agreement or Employee’s employment with or termination by the
Company that is not resolved by the parties shall be settled by arbitration
administered by the American Arbitration Association under its National Rules
for the Resolution of Employment Disputes. Any such arbitration shall be
conducted in Lexington, Kentucky. The parties further agree that the arbitrator
may resolve issues of contract interpretation as well as

 

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law and award damages, if any, to the extent provided by this Agreement or
applicable law. The parties agree that the costs of the arbitrator’s services
shall be borne by the Company. The parties further agree that the arbitrator’s
decision will be final and binding and enforceable in any court of competent
jurisdiction. In addition to the A.A.A.’s Arbitration Rules and unless otherwise
agreed to by the parties, the following rules shall apply:

(a) Each party shall be entitled to discovery exclusively by the following
means: (i) requests for admission, (ii) requests for production of documents,
(iii) up to fifteen (15) written interrogatories (with any subpart to be counted
as a separate interrogatory), and (iv) depositions of no more than six
(6) individuals.

(b) Unless the arbitrator finds that delay is reasonably justified or as
otherwise agreed to by the parties, all discovery shall be completed, and the
arbitration hearing shall commence, within five (5) months after the appointment
of the arbitrator.

(c) Unless the arbitrator finds that delay is reasonably justified, the hearing
will be completed, and an award rendered, within thirty (30) days of
commencement of the hearing.

The arbitrator’s authority shall include the ability to render equitable types
of relief and, in such event, any aforesaid court may enter an order enjoining
and/or compelling such actions or relief ordered or as found by the arbitrator.

Each party shall bear its own legal and other professional fees and costs
incurred in connection with such arbitration proceeding and any necessary court
action.

Notwithstanding the foregoing provisions of this Article V, the parties
expressly agree that a court of competent jurisdiction may enter a temporary
restraining order or an order enjoining a breach of Article IV of this Agreement
without submission of the underlying dispute to an arbitrator. Such remedy shall
be cumulative and nonexclusive, and shall be in addition to any other remedy to
which the parties may be entitled.

ARTICLE VI

GENERAL PROVISIONS

6.1 Notices. Any and all notices provided for in this Agreement shall be given
in writing and shall be deemed given to a party at the earlier of (i) when
actually delivered to such party, or (ii) when mailed to such party by
registered or certified mail (return receipt requested) or sent to such party by
courier, confirmed by receipt, and addressed to such party at the address
designated below for such party as follows (or to such other address for such
party as such party may have substituted by notice pursuant to this
Section 6.1):

 

  (a) If to the Company:   

Tempur Sealy International, Inc.

    

1000 Tempur Way

    

Lexington, KY 40511

     Attention: Board of Directors     

with a copy to Executive Vice President

and General Counsel

 

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  (b) If to Employee:    Scott Thompson      c/o Tempur Sealy International,
Inc.      1000 Tempur Way      Lexington, KY 40511

6.2 Entire Agreement; Survival. This Agreement contains the entire understanding
and the full and complete agreement of the parties and supersedes and replaces
any prior understandings and agreements among the parties with respect to the
subject matter hereof. The provisions of this Agreement shall survive the
termination of the Agreement, or of Employee’s employment for any reason, to the
extent necessary to enable the parties to enforce their respective rights.

6.3 Amendment; Headings and References. This Agreement may be altered, amended
or modified only in writing, signed by both of the parties hereto, except that
either party may update its address set forth in Section 6.1 by providing a
notice of the updated address in the manner set forth in Section 6.1. Headings
included in this Agreement are for convenience only and are not intended to
limit or expand the rights of the parties hereto. References to Sections herein
shall mean sections of the text of this Agreement, unless otherwise indicated.

6.4 Assignability. This Agreement and the rights and duties set forth herein may
not be assigned by either of the parties without the express written consent of
the other party. This Agreement shall be binding on and inure to the benefit of
each party and such party’s respective heirs, legal representatives, successors
and assigns.

6.5 Severability. If any court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then such invalidity or
unenforceability shall have no effect on the other provisions hereof, which
shall remain valid, binding and enforceable and in full force and effect, and
such invalid or unenforceable provision shall be construed in a manner so as to
give the maximum valid and enforceable effect to the intent of the parties
expressed therein.

6.6 Waiver of Breach. The waiver by either party of the breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach by either party.

6.7 Governing Law; Jurisdiction; Construction. This Agreement shall be governed
by the internal laws of the Commonwealth of Kentucky, without regard to any
rules of construction that would require application of the laws of another
jurisdiction. Any legal proceeding related to this Agreement and permitted under
Section 4.7 and Article V hereof must be litigated in an appropriate Kentucky
state or federal court, and both the Company and Employee hereby consent to the
exclusive jurisdiction of the Commonwealth of Kentucky for this purpose; waive
any objection they may now or hereafter have to venue or to convenience of

 

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forum and agree that all legal proceedings will be tried in a court of competent
jurisdiction by a judge without a jury. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, accordingly each party waives the application of any law, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.

6.8. Tax Compliance.

(a) The Company may withhold from any amounts payable hereunder any amounts
required to be withheld under federal, state or local law and any other
deductions authorized by Employee. The Company and Employee agree that they will
execute any and all amendments to this Agreement as they mutually agree in good
faith may be necessary to ensure compliance with the provisions of Section 409A
(together with any implementing regulations, “Section 409A”) of the Code while
preserving insofar as possible the economic intent of the respective provisions,
so that Employee will not be subject to any tax (including interest and
penalties) under Section 409A.

(b) For purposes of Section 409A, the right to a series of installment payments
under this Agreement shall be treated as a right to a series of separate
payments.

(c) With respect to any reimbursement of expenses of, or any provision of
in-kind benefits to, Employee, as specified under this Agreement, such
reimbursement of expenses or provision of in-kind benefits shall be subject to
the following conditions: (1) the expenses eligible for reimbursement or the
amount of in-kind benefits provided in one taxable year shall not affect the
expenses eligible for reimbursement or the amount of in-kind benefits provided
in any other taxable year, except for any medical reimbursement arrangement
providing for the reimbursement of expenses referred to in Section 105(b) of the
Code; (2) the reimbursement of an eligible expense shall be made no later than
the end of the year after the year in which such expense was incurred; and
(3) the right to reimbursement or in-kind benefits shall not be subject to
liquidation or exchange for another benefit.

(d) Notwithstanding anything to the contrary in this Agreement, if Employee is a
“specified employee” as determined pursuant to Section 409A as of the date of
Employee’s “separation from service” as defined in Treasury Regulation
Section 1.409A-1(h) (or any successor regulation) and if any payments or
entitlements provided for in this Agreement constitute a “deferral of
compensation” within the meaning of Section 409A and cannot be paid or provided
in the manner provided herein without subjecting Employee to additional tax,
interest or penalties under Section 409A, then any such payment or entitlement
which is payable during the first six (6) months following Employee’s
“separation from service” shall be paid or provided to Employee in a cash
lump-sum on the first business day of the seventh (7th) calendar month
immediately following the month in which Employee’s “separation from service”
occurs or, if earlier, upon Employee’s death. In addition, any payments or
benefits due hereunder upon a termination of Employee’s employment which are a
“deferral of compensation” within the meaning of Section 409A shall only be
payable or provided to Employee (or Employee’s estate) upon a “separation from
service” as defined in Section 409A. Finally, for the purposes of this
Agreement, amounts payable under Section 3.2 shall be deemed not to be a
“deferral of compensation” subject to

 

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Section 409A to the extent provided in the exceptions in Treasury Regulation
Sections 1.409A-1(b)(4) (“short-term deferrals”) and (b)(9) (“separation pay
plans,” including the exception under subparagraph (iii)) and other applicable
provisions of Treasury Regulation Section 1.409A-1 – A-6.

(e) Whenever a payment under this Agreement specifies a payment period with
reference to a number of days (for example, “payment shall be made within thirty
(30) days following the date of termination”), the actual date of payment within
the specified period shall be within the sole discretion of the Company. In no
event may Employee, directly or indirectly, designate the calendar year of any
payment to be made under this Agreement, to the extent such payment is subject
to Code Section 409A.

(f) The Company makes no representation or warranty and shall have no liability
to Employee or any other person if any provisions of this Agreement are
determined to constitute deferred compensation subject to Code Section 409A but
do not satisfy an exemption from, or the conditions of, Code Section 409A.

(g) Limitation on Payments and Benefits. Notwithstanding any provision of this
Agreement to the contrary, in the event that any amount or benefit to be paid or
provided under this Agreement or otherwise to the Employee constitutes a
“parachute payment” within the meaning of Section 280G of the Code, and but for
this provision, would be subject to the excise tax imposed by Section 4999 of
the Code, then the totality of those amounts shall be either: (a) delivered in
full, or (b) delivered as to such lesser extent which would result in no portion
of such payments and benefits being subject to excise tax under Section 4999 of
the Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local income and employment taxes and the excise tax imposed
by Section 4999 of the Code (and any equivalent state or local excise taxes),
results in the receipt by the Employee on an after-tax basis, of the greatest
amount of such payments and benefits, notwithstanding that all or some portion
of such amount may be taxable under Section 4999 of the Code. Unless the Company
and the Employee otherwise agree, any determination required under this
provision shall be made in writing by a firm of independent public accountants
or a law firm selected by the Company and reasonably acceptable to the Employee
(the “Accountants”), whose determination shall be conclusive and binding upon
the Employee and the Company for all purposes. The Company and the Employee
agree to furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
provision. The Company will bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this provision. Any
reduction of any amount required by this provision shall occur in the following
order: (1) reduction of cash payments to the Employee under this Agreement or
otherwise; (2) reduction of vesting acceleration of equity awards under this
Agreement or otherwise; and (3) reduction of other benefits paid or provided to
the Employee. If two or more equity awards are granted on the same date, each
award will be reduced on a pro rata basis (dollar-for-dollar).

6.9. Expenses. The Company agrees to reimburse Employee for the reasonable and
documented fees and expenses of Employee’s legal counsel in connection with the
negotiation and preparation of this Agreement, in an amount not to exceed
$20,000.

 

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6.10. Indemnification; Insurance Coverage. The Company’s By-Laws, as may be
amended from time to time, provide to directors and executive officers of the
Company certain rights to indemnification by the Company and to directors and
officers insurance coverage. Employee shall be entitled to the same level of
protection provided to executive officers and, as applicable, directors, as
contemplated in the Company’s By-Laws, as may be amended from time to time.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year written above.

 

COMPANY: TEMPUR SEALY INTERNATIONAL, INC.

/s/ Frank Doyle

By:   Frank Doyle Title:   Chairman of the Board of Directors EMPLOYEE:

/s/ Scott Thompson

Scott Thompson WITNESSED BY:

/s/ Vanessa Thompson

Name:   Vanessa Thompson

Date: September 4, 2015

 

[Signature Page to Employment and Non-Competition Agreement]