Exhibit 10.25

 

Approved by the Board of Directors November 1, 2012

 

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Independent Director Compensation Policy

 

1.                                      Base Compensation. Mattress Firm Holding
Corp. (the “Company”) shall pay each director who meets the criteria for each of
(i) “outside director,” as such term is used in Section 162(m) of the Internal
Revenue Code of 1986, as amended, (ii) “non-employee director,” as such term is
used in Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and (iii) “independent director,” as defined in
Rule 5605(a)(2) of the NASDAQ Marketplace Rules and Section 10A(m)(3) of the
Exchange Act (each, an “Independent Director”), an amount of $40,000 per annum
payable in four equal installments at the beginning of each fiscal quarter in
respect of such Independent Director’s service on the Company’s Board of
Directors (the “Board”) subject to the Independent Director’s continued service
on the Board.

 

2.                                      Committees. The Company shall pay each
Independent Director who serves as a chair of any committee of the Board an
additional amount of $5,000 per annum payable at the beginning of each fiscal
year ($5,000 per each committee chaired). Additionally, each Independent
Director who is a member of the Audit Committee of the Board shall be paid an
amount of $5,000 per annum payable at the beginning of each fiscal year;
provided, for the avoidance of doubt, that the Independent Director who serves
as the Chairman of the Audit Committee shall receive an additional annual
retainer of $10,000 in the aggregate ($5,000 for service on the Audit Committee
and $5,000 for service as a chairman).

 

3.                                      Reimbursement of Travel and Other
Expenses. The Company shall promptly pay or reimburse each Independent Director
for all ordinary and reasonable out-of-pocket expenses actually incurred (and,
in the case of reimbursement, paid) by such Independent Director in connection
with attending meetings of the Board and any committee thereof on which he or
she serves; provided that such Independent Director submits proof of such
expenses, with all properly completed forms as prescribed from time to time by
the Company, no later than 60 days after such expenses have been so incurred;
and it being understood that airfare for first class travel (but not expenses
incurred in connection with the use of a private plane in excess of the cost of
first class airfare for comparable travel) shall be a reimbursable expense.

 

4.                                      Restricted Stock Grants. Each
Independent Director shall receive an award of Restricted Stock (as defined in
the Mattress Firm Holding Corp. 2011 Omnibus Incentive Plan (the “Plan”)) under
the Plan on the first day of each fiscal year of the Company for a number of
shares of Restricted Stock determined by dividing $40,000 by the average closing
price of the Company’s common stock, par value $0.01 per share, over the 30
trading days immediately preceding the date of grant; provided that the number
of shares of Restricted Stock shall be rounded down in the case of any
fractional shares and no cash shall be payable in respect of any such fractional
shares. Subject to such Independent Director’s continued service as an
Independent Director, such Restricted Stock shall vest in full on the first
anniversary of the date of grant. Effective upon such Independent Director’s
resignation or removal from the Board, all unvested shares of Restricted Stock
held by such Independent Director shall be forfeited. Such

 

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Restricted Stock shall be issued pursuant to a form of Restricted Stock Award,
as approved by the Board or the Compensation Committee.

 

5.                                      Partial Year Services.

 

(a)                                 Any director who joins the Board after the
beginning of the then-current fiscal year shall receive a pro rata portion of
the cash payments specified in Sections 1 and 2 of this policy, based upon the
number of fiscal quarters during which such director serves as a member of the
Board, including the then-current fiscal quarter. Such amount will be payable on
the effective date of the director’s election or appointment to the Board. For
example, if a director joins the Board on June 15, he or she shall receive
three-fourths of the base compensation and applicable committee compensation
amounts. Additionally, such director shall receive a pro rata portion of the
equity compensation set forth in Section 4, which shall be equal to
(a) (i) $10,000 multiplied by (ii) the number of fiscal quarters during which
the director will serve on the Board, including the then-current fiscal quarter,
divided by (b) the average closing price of the Company’s common stock, par
value $0.01 per share, over the 30 trading days immediately preceding the later
of (i) the effective date of such director’s appointment or election to the
Board or (ii) such other date of grant approved by the Board; provided that the
number of shares of Restricted Stock shall be rounded down in the case of any
fractional shares and no cash shall be payable in respect of any such fractional
shares.

 

(b)                                 Any director who terminates service on the
Board (whether as a result of resignation, removal or otherwise) prior to the
end of the then-current fiscal year, shall receive a pro rata portion of the
base compensation amount specified in Section 1, based upon the number of fiscal
quarters during which such director serves as a member of the Board, including
the then-current fiscal quarter. The director shall not have any obligation to
return or reimburse the Company for compensation paid to him or her prior to the
date of termination in respect of the then-current fiscal year or any prior
fiscal year.

 

This policy supersedes any prior written policy of this type, including the
independent Director Compensation Policy approved by the Board of Directors on
January 27, 2012.

 

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