TEMPUR-PEDIC INTERNATIONAL INC.
2013 EQUITY INCENTIVE PLAN
Stock Option Agreement
[Insert Employee Name]
This Stock Option Agreement dated as of DATE] (this “Agreement”), between Tempur
Sealy International, Inc., a corporation organized under the laws of the State
of Delaware (the “Company”), and the individual identified below, residing at
the address there set out (the “Optionee”).
1.Grant of Option. Pursuant and subject to the Company’s 2013 Equity Incentive
Plan (as the same may be amended from time to time, the “Plan”), the Company
grants to the Optionee an option (the “Option”) to purchase from the Company all
or any part of a total of [          ] shares (the “Option Shares”) of the
Company’s common stock, par value $0.01 per share (the “Stock”), at a price of
$[_____] per share (the “Exercise Price”). The ”Grant Date” of this Option is
[GRANT DATE].
If this Agreement is not executed and returned to the Company by Optionee on or
before [RETURN DATE], the award shall be treated as though it was never granted,
and Grantee shall have no further rights pursuant to this Agreement.
2.Character of Option. This Option is not to be treated as an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended.
3.Duration of Option. Subject to the next sentence, this Option shall expire at
11:59 p.m. (Lexington, KY local time) on the date immediately preceding the
tenth anniversary of the Grant Date. However, this Option is subject to earlier
termination as provided in Section 5 below.
4.Exercise of Option. Until the expiration of this Option pursuant to Section 3
or Section 5 of this Agreement, the Optionee may exercise it as to the number of
Option Shares identified in the table below, in full or in part, at any time on
or after the applicable exercise date or dates identified in the table. However,
subject to Section 5 of this Agreement, during any period that this Option
remains outstanding after the Optionee’s employment with the Company and its
Affiliates ends, the Optionee may exercise it only to the extent it was
exercisable immediately prior to the end of the Optionee’s employment.
Number of Shares
in Each Installment
Percentage of
Option Shares
Initial Exercise Date
for Shares in Installment

Section 7.1(e) of the Plan sets forth the procedure for exercising this Option
by paying cash or a check made payable to the order of the Company in an amount
equal to the aggregate Exercise Price of the Stock to be purchased, or by
delivering other shares of Stock of equivalent Market Value, provided the
Optionee has owned such shares of Stock for at least six (6) months. The
Optionee may also exercise this Option pursuant to a formal cashless exercise
program as referred to in Section 7.1(e) of the Plan, subject to the terms and
conditions referred to in Section 7.1(e) of the Plan.
5.Termination or Acceleration in Certain Cases. The Option shall be subject to
early termination prior to the tenth anniversary of the Grant Date and
accelerated vesting in certain circumstances, as described below.
Notwithstanding anything contained in this Section 5 to the contrary, however,
in no event shall the Option become or remain exercisable to any extent after
the expiration date set forth in Section 3.
(a)By the Optionee’s Voluntary Resignation Without Good Reason. If the
Optionee’s employment with the Company or its Affiliates is terminated by the
Optionee’s voluntary resignation without Good Reason, including by any
Retirement that is not an Approved Retirement or the Optionee’s other voluntary
departure, (i) the Option shall remain exercisable for that number of Option
Shares for which this Option shall have become exercisable pursuant to Section 4
above (i.e., the “vested” Option Shares) as of the date of such termination of
employment through the last day of the three (3) month period commencing on the
later of (y) the expiration of any applicable Blackout Period (as defined below)
in which such termination of employment occurs and (z) the date of such
termination of employment; and (ii) the Option Shares that have not yet become
vested Option Shares pursuant to Section 4 above as of the date of such
termination of employment shall irrevocably expire, and the Optionee shall have
no right to purchase any such unvested Option Shares.
(b)Termination by the Company other than For Cause or By the Optionee for Good
Reason. If the Optionee’s employment with the Company or its Affiliates is
terminated by the Company or an Affiliate, other than For Cause,

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or by the Optionee for Good Reason or by reason of Optionee’s employer ceasing
to be an Affiliate (in the absence of a Change of Control), the Option shall
remain outstanding and be or become exercisable to the extent otherwise provided
in Section 4 for a three (3) year period commencing on the date of such
termination of employment; provided, that in the event the Optionee’s employment
is terminated prior to the end of the twelve (12) month period immediately
following the Grant Date, the number of Option Shares otherwise subject to the
Option shall be pro-rated downward based on the actual number of full calendar
months that elapsed during such twelve (12) month period prior to such
termination of employment. For example, if the Optionee is granted an Option to
purchase 600 Option Shares on March 1, 2014 and Optionee’s employment is
terminated by the Company or any of its Affiliates other than For Cause on
September 1, 2014, the Option Shares subject to the Option will be adjusted
downward by 50% to total 300 Option Shares (and the number of Option Shares that
become vested Option Shares in each of the three (3) years specified in Section
4 shall be correspondingly reduced by fifty percent (50%)). No pro-ration shall
be made to the Option Shares for a termination of employment described in this
Section 5(b) that occurs after the twelve (12) month anniversary of the Grant
Date, and the Option shall remain outstanding and be or become exercisable to
the extent provided in Section 4 for the three (3) year period commencing on the
date of such termination of employment. Notwithstanding the foregoing, no Stock
shall be issued and all of Optionee’s rights to the Option and the Option Shares
hereunder shall be forfeited, expire and terminate unless (i) the Company shall
have received a release of all claims from the Optionee in a form reasonably
acceptable to the Company (and said release shall have become irrevocable in
accordance with its terms) prior to the date on which all of the Option Shares
become vested Option Shares (or if earlier the deadline established in the form
of release delivered by the Company to Optionee for execution) and (ii) the
Optionee shall have complied with the covenants set forth in Section 10 of this
Agreement.
(c)Termination by the Company For Cause. If the Company or any of its Affiliates
terminates the Optionee’s employment For Cause, the Option and all of the Option
Shares (whether or not then vested) shall be forfeited and shall expire and
terminate immediately as of the date of such termination of employment.
(d)Death or Long-Term Disability. If the Optionee dies or the Company or any of
its Affiliates terminates the Optionee’s employment due to the Optionee’s
long-term disability (within the meaning of Section 409A of the Code), all of
the Option Shares that have not become vested Option Shares pursuant to Section
4 as of the date of death or such termination of employment shall immediately
become vested Option Shares, and the Option shall remain outstanding and
exercisable until the one (1) year anniversary of the date of Optionee’s death
or such termination of employment.
(e)Approved Retirement. In the event of the Optionee’s Retirement, the Committee
may consent to the continued vesting of the Option in accordance with the annual
vesting schedule specified in Section 4 and the extended exercisability of the
vested Option Shares until the earlier of (i) the three (3) year anniversary of
the date on which the Option becomes fully vested, and (ii) the three (3) year
anniversary of the date of such Retirement (an “Approved Retirement”); provided,
that in the event the date of the Optionee’s Approved Retirement occurs prior to
the end of the twelve (12) month period immediately following the Grant Date,
the number of Option Shares otherwise subject to the Option shall be pro-rated
downward based on the actual number of calendar months that elapsed during such
twelve (12) month period prior to such Approved Retirement (and, for the
avoidance of doubt, in the event of an Approved Retirement no pro-ration shall
be made to the Option Shares awarded more than twelve (12) months prior to the
date of the Approved Retirement). Notwithstanding the foregoing, no Stock shall
be issued and all of Optionee’s rights to the Option and the Option Shares
hereunder shall be forfeited, expire and terminate unless (i) the Company shall
have received a release of all claims from the Optionee in a form reasonably
acceptable to the Company (and said release shall have become irrevocable in
accordance with its terms) prior to the date on which all of the Option Shares
become vested Option Shares (or if earlier the deadline established in the form
of release delivered by the Company to Optionee for execution) and (ii) the
Optionee shall have complied with the covenants set forth in Section 10 of this
Agreement. If the Committee shall for any reason decline to consent to continued
vesting on the Recipient’s Retirement, then the provisions of subsection (a)
above shall instead apply.
(i)Change of Control. If a Change of Control occurs then Section 9(a) of this
Plan shall apply to the Options and Option Shares.
(f)For the purposes of this Agreement:     
(i)“Blackout Period” shall mean any period when employees are prohibited from
making purchases and sales of the Company’s securities.
(ii)“Change of Control” shall have the meaning set forth in the Plan, provided,
that no event or transaction shall constitute a Change of Control for purposes
of this Agreement unless it also qualifies as a change of control for purposes
of Section 409A of the Code.
(iii)“Employee”, “employment,” “termination of employment” and “cease to be
employed,” and other words or phrases of similar import, shall mean the
continued provision of substantial services to the Company or any of its
Affiliates (or the cessation or termination of such services) whether as an
employee, consultant or director.
(iv)“For Cause” shall mean any of the following: (A) Optionee’s willful and
continued failure to substantially perform the reasonably assigned duties with
the Company or any Affiliate of the Company which are consistent with Optionee’s
position and job description, other than any such failure resulting from
incapacity due to physical or mental illness, after a written notice is
delivered to Optionee by the Chief Executive Officer or Chief Human Resources
Officer of the Company, which specifically identifies the manner in which
Optionee has not substantially performed the assigned duties, (B) Optionee’s
willful engagement in illegal conduct which is materially and demonstrably
injurious to the Company or any Affiliate of the

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Company, (C) Optionee’s conviction by a court of competent jurisdiction of, or
pleading guilty or nolo contendere to, any felony, or (D) Optionee’s commission
of an act of fraud, embezzlement, or misappropriation against the Company or any
Affiliate of the Company, including, but not limited to, the offer, payment,
solicitation or acceptance of any unlawful bribe or kickback with respect to the
business of the Company or any Affiliate of the Company; Please note award
agreement for each CEO, COO, EVP and any other employee who has an employment
agreement which defines such terms, will, if applicable, define such term as it
is defined in his or her employment agreement.
(v)“Good Reason” shall mean the relocation of Optionee’s principal workplace
over sixty (60) miles from the existing workplaces of the Company or any
Affiliate of the Company without the consent of Optionee (which consent shall
not be unreasonably withheld, delayed or conditioned); Please note award
agreement for each CEO, COO, EVP and any other employee who has an employment
agreement which defines such terms, will, if applicable, define such term as it
is defined in his or her employment agreement. and
(vi)“Retirement” shall have the meaning assigned to such term in the applicable
retirement policy of the Company or its Affiliates as in effect at such time.
6.Transfer of Option. Except as provided in Section 6.4 of the Plan, neither
this Option nor any Option Shares nor any rights hereunder to the underlying
Stock may be transferred except by will or the laws of descent and distribution,
and during the Optionee’s lifetime, only the Optionee may exercise this Option.
7.Incorporation of Plan Terms. Except as otherwise provided herein in Section 5
above, this Option is granted subject to all of the applicable terms and
provisions of the Plan, including but not limited to Section 8 of the Plan,
“Adjustment Provisions”, and the limitations on the Company’s obligation to
deliver Option Shares upon exercise set forth in Section 10 of the Plan,
“Settlement of Awards”. Capitalized terms used but not defined herein shall have
the meaning assigned under the Plan.
8.Miscellaneous. This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware, without regard to the conflict of laws
principles thereof, and shall be binding upon and inure to the benefit of any
successor or assign of the Company and any executor, administrator, trustee,
guardian, or other legal representative of the Optionee. This Agreement may be
executed in one or more counterparts all of which together shall constitute one
instrument.
9.Tax Consequences.
(a)The Company makes no representation or warranty as to the tax treatment of
this Option, including upon the exercise of this Option or upon the Optionee’s
sale or other disposition of the Option Shares. The Optionee should rely on
his/her own tax advisors for such advice. Notwithstanding the foregoing, the
Optionee and the Company hereby acknowledge that both the Optionee and the
Company may be subject to certain obligations for tax withholdings, social
security taxes and other applicable taxes associated with the vesting or
exercise of the Options or the issuance of the Option Shares to the Optionee
pursuant to this Agreement. The Optionee hereby affirmatively consents to the
transfer between his or her employee and the Company of any and all personal
information necessary for the Company and his employer to comply with its
obligations.
(b)All amounts earned and paid pursuant to this Agreement are intended to
be paid in compliance with, or on a basis exempt from, Section 409A of the
Code.  This Agreement, and all terms and conditions used herein, shall be
interpreted and construed consistent with that intent.  However, the Company
does not warrant all such payments will be exempt from, or paid in compliance
with, Section 409A.  The Optionee bears the entire risk of any adverse federal,
state or local tax consequences and penalty taxes which may result from payments
made on a basis contrary to the provisions of Section 409A or comparable
provisions of any applicable state or local income tax laws.
10.Certain Remedies.
(a)If at any time prior to the later of (y) the two (2) year period after
termination of the Optionee’s employment with the Company and its Affiliates,
and (z) the period that includes the date (after a termination of Optionee’s
employment with the Company and its Affiliates) on which all of the Option
Shares granted hereunder and capable of becoming vested Option Shares so become
vested Option Shares (the last day of such later period being the “Covenant
Termination Date”), any of the following occur:
(i)the Optionee unreasonably refuses to comply with lawful requests for
cooperation made by the Company, its board of directors, or its Affiliates;
(ii)the Optionee accepts employment or a consulting or advisory engagement with
any Competitive Enterprise (as defined in Section 10(c)) of the Company or its
Affiliates or the Optionee otherwise engages in competition with the Company or
its Affiliates;
(iii)the Optionee acts against the interests of the Company and its Affiliates,
including recruiting or employing, or encouraging or assisting the Optionee’s
new employer to recruit or employ an employee of the Company or any Affiliate
without the Company’s written consent;
(iv)the Optionee fails to protect and safeguard while in his/her possession or
control, or surrender to the Company upon termination of the Optionee’s
employment with the Company or any Affiliate or such earlier time or times as
the Company or its board of directors or any Affiliate may specify, all
documents, records, tapes, disks and other media of every kind and description
relating to the business, present or otherwise, of the Company and its
Affiliates and any copies, in whole or in part thereof, whether or not prepared
by the Optionee;

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(v)the Optionee solicits or encourages any person or enterprise with which the
Optionee has had business-related contact, who has been a customer of the
Company or any of its Affiliates, to terminate its relationship with any of
them;
(vi)the Optionee takes any action or makes any statement, written or oral, that
disparages the business, products, services or management of Company or its
Affiliates, or any of their respective directors, officers, agents, or
employees, or the Optionee takes any action that is intended to, or that does in
fact, damage the business or reputation of the Company or its Affiliates, or the
personal or business reputations of any of their respective directors, officers,
agents, or employees, or that interferes with, impairs or disrupts the normal
operations of the Company or its Affiliates; or
(vii)the Optionee breaches any confidentiality obligations the Optionee has to
the Company or an Affiliate, the Optionee fails to comply with the policies and
procedures of the Company or its Affiliates for protecting confidential
information, the Optionee uses confidential information of the Company or its
Affiliates for his/her own benefit or gain, or the Optionee discloses or
otherwise misuses confidential information or materials of the Company or its
Affiliates (except as required by applicable law); then
(1)this Option shall terminate and be cancelled effective as of the date on
which the Optionee entered into such activity, unless terminated or cancelled
sooner by operation of another term or condition of this Agreement or the Plan;
(2)any stock acquired and held by the Optionee pursuant to the exercise of this
Option during the Applicable Period (as defined in Section 10(b) below) may be
repurchased by the Company at a purchase price equal to the Exercise Price per
share; and
(3)any gain realized by the Optionee from the sale of stock acquired through the
exercise of this Option during the Applicable Period shall be paid by the
Optionee to the Company.
(b)The term “Applicable Period” shall mean the period commencing on the later of
the date of this Agreement or the date which is one (1) year prior to the
Optionee’s termination of employment with the Company or any Affiliate and
ending on the Covenant Termination Date.
(c)The term “Competitive Enterprise” shall mean a business enterprise that
engages in, or owns or controls a significant interest in, any entity that
engages in, the manufacture, sale or distribution of mattresses or pillows or
other bedding products or other products competitive with the Company’s
products. Competitive Enterprise shall include, but not be limited to, the
entities set forth on Appendix A Please note award agreement for each CEO, COO,
EVP and any other employee who has an employment agreement which defines this
term, will, if applicable, define such term as it is defined in his or her
employment agreement. hereto, which may be amended by the Company from time to
time upon notice to the Optionee. At any time the Optionee may request in
writing that the Company make a determination whether a particular enterprise is
a Competitive Enterprise. Such determination will be made within fourteen (14)
days after the receipt of sufficient information from the Optionee about the
enterprise, and the determination will be valid for a period of ninety (90) days
from the date of determination.
11.Right of Set Off. By executing this Agreement, the Optionee consents to a
deduction from any amounts the Company or any Affiliate owes the Optionee from
time to time, to the extent of the amounts the Optionee owes the Company under
Section 10 above, provided that this set-off right may not be applied against
wages, salary or other amounts payable to the Optionee to the extent that the
exercise of such set-off right would violate any applicable law. If the Company
does not recover by means of set-off the full amount the Optionee owes the
Company, calculated as set forth above, the Optionee agrees to pay immediately
the unpaid balance to the Company upon the Company’s demand.
12.Nature of Remedies.
(a)The remedies set forth in Sections 10 and 11 above are in addition to any
remedies available to the Company and its Affiliates in any non-competition,
employment, confidentiality or other agreement, and all such rights are
cumulative. The exercise of any rights hereunder or under any such other
agreement shall not constitute an election of remedies.
(b)The Company shall be entitled to place a legend on any certificate evidencing
any stock acquired upon exercise of this Option referring to the repurchase
right set forth in Section 10(a) above. The Company shall also be entitled to
issue stop transfer instructions to the Company’s stock transfer agent in the
event the Company believes that any event referred to in Section 10(a) has
occurred or is reasonably likely to occur.
13.No Right to Employment. This Agreement does not give the Optionee any right
to continue to be employed by the Company or any of its Affiliates, or limit, in
any way, the right of the Company or any of its Affiliates to terminate the
Optionee’s employment, at any time, for any reason not specifically prohibited
by law.

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In Witness Whereof, the parties have executed this Stock Option Agreement as of
the date first above written.
TEMPUR SEALY INTERNATIONAL, INC.
By:                
Title:        Signature of Optionee
    
[Name of Optionee]
Optionee’s Address: