Document:

Exhibit 10.15-TPX-2014.12.31.14 10K

As Adopted May 22, 2013

TEMPUR SEALY INTERNATIONAL, INC.
NON-EMPLOYEE DIRECTOR 
DEFERRED COMPENSATION PLAN

AMENDED AND RESTATED EFFECTIVE MAY 22, 2013
1.Purpose; Effective Date; Sub-Plan; Definitions.  
(a)    Purpose.  The Board of Directors (the “Board”) of Tempur Sealy International, Inc. (the “Company”) has approved compensating Directors (as defined below) in part in the form of deferred restricted stock units (“DSUs”).  The Board has further authorized Directors to make certain elections as to the time of payment under any such DSUs as well as the form of payment of any part of their compensation otherwise payable in cash (which alternative forms may include the grant of additional DSUs or payment in the form of shares of the Company’s common stock, $0.01 par value per share (“Common Stock”)).  The Board initially adopted this Non-Employee Director Deferred Compensation Plan to set out the terms and conditions of the elections available to Directors, and the terms of payment of any such DSUs.  Effective as of May 22, 2013, the Board has amended and restated this Non-Employee Director Deferred Compensation Plan (as amended and restated, the “Plan”) for the purpose of providing that shares issued under DSUs would be issued under the Company’s 2013 Equity Incentive Plan, as amended from time to time (the “2013 EIP”) and for certain other limited purposes.  The Non-Employee Director Deferred Compensation Plan as originally adopted effective May 4, 2010 is referred to as the “Original Plan”, and any awards granted prior to May 22, 2013 will continue to be governed by the Original Plan.
(b)    Effective Date.  The Plan was originally effective as of May 4, 2010.  As amended and restated, this Plan is effective as of May 22, 2013 (the “Effective Date”).
(c)    Relationship to 2013 Equity Incentive Plan. From the Effective Date, this Plan is maintained under the Company’s 2013 EIP, and any shares of Common Stock to be delivered pursuant to this Plan shall be issued under the 2013 EIP.
(d)    Definitions.  Capitalized terms used but not defined herein shall have the meaning assigned under the 2013 EIP.  As used in this Plan, the following terms shall have the following meanings:
(i)    “Award Agreement” shall mean an award agreement under the 2013 EIP in substantially the form attached hereto as Exhibit A, or such other form approved from time to time by the Committee.    
(ii)    “Board Year” shall mean the term of service for a member of the Board commencing upon election or re-election at the Company’s Annual Meeting of Stockholders or upon appointment of a Director during a calendar year, and ending at the next Annual Meeting of Stockholders.
(iii)    “Committee” shall mean the Compensation Committee of the Board.
(iv)    “Director” shall mean a non-employee member of the Board.
(v)    “Election Form” shall mean the election form in substantially the form attached hereto as Exhibit B, or such other form approved from time to time by the Committee.
(vi)    “Fees” shall mean all retainer and committee fees payable to a Director for service on the Board for any Board Year.
(vii)    “Participant” shall mean any Director.
(viii)    “Separation from Service” shall mean a Participant’s death, retirement or other termination of association with the Company; provided that such separation constitutes a separation from service for purposes of Section 409A of the Code.
2.Eligibility.  Only Directors shall be eligible to participate in this Plan.
3.Deferral Election.  Each DSU granted to a Director for service for an upcoming Board Year or, for a Director appointed during a calendar year, for the balance of the then current Board Year, including any DSU granted pursuant to a 

Director’s election under Section 4, is subject to vesting as set forth in the applicable Award Agreement.  All such DSUs which become vested shall be paid under the terms of this Plan and the 2013 EIP on the third (3rd) anniversary of the Grant Date applicable to each DSU, as specified in the applicable Award Agreement, unless a Director elects to defer payment until the later of:
(i)    the third (3rd) anniversary of the Grant Date; and
(ii)    the earlier of the Director’s Separation from Service, and a fixed date after the third (3rd) anniversary of the Grant Date, which must be May 1 of the year designated by the applicable Director.  
This election shall be made by submitting an Election Form to the Company in accordance with Section 5 hereof.  Election Forms shall not carry over from year to year but instead a new Election Form must be submitted by the applicable deferral deadline in Section 5 hereof.   
4.Equity Election. 
(a)    Fee Election.  With respect to Fees otherwise payable for services performed during a Board Year, a Participant may elect to receive all or a portion of his or her Fees otherwise payable in cash either:
(i)    in cash, to be paid as determined by the Board over the Board Year and subject to the Director’s continued service;
(ii)    in shares of Common Stock equal to the dollar value of the Fees to be paid in the form of Common Stock at any time divided by the closing price of the Company’s Common Stock on the New York Stock Exchange (the “NYSE”) on the date of payment, rounded to the nearest whole share, and payable as determined by the Board over the Board Year and subject to the Director’s continued service; or 
(iii)    as DSUs granted under an Award Agreement awarded at the beginning of the applicable Board Year (or portion thereof) equal to the dollar value of the Fees to be paid in the form of DSUs divided by the closing price of the Company’s Common Stock on the NYSE on the Grant Date under the Award Agreement, rounded to the nearest whole share, subject to the Director’s continued service.  
These elections shall be made by submitting an Election Form to the Company in accordance with Section 5.  Election Forms shall not carry over from year to year but instead a new Election Form must be submitted by the applicable deferral deadline in Section 5 hereof.
(b)    Treatment of DSUs.  If a Participant elects to take all or a portion of his or her Fees as DSUs pursuant to Section 4(a), the provisions of Section 3 (including any election as to the time of payment) shall apply to his or her respective DSUs.  
5.Election Form Deadlines.  
(a)General Rule.  Except as provided in Section 5(b) below, the deadline for any election under Sections 3 and 4 shall be the last day of the calendar year prior to the Board Year which starts in the following calendar year.
(b)Special Rule for Initial Elections.  
(i)Any Director who first becomes a Director after the Effective Date may make initial elections under Sections 3 and 4 with respect to (i) Fees payable for the Board Year in which he or she becomes a Director and (ii) Fees payable for a Board Year that begins on or after, but in the same calendar year, as the date he or she becomes a Director.  These elections may be made within thirty (30) days after becoming a Director.  However, no election under Section 3, and no election under Section 4 to convert Fees otherwise payable in cash to DSUs, shall be allowed under these timing rules if the Director has been eligible to participate in any other nonqualified deferred compensation plan of the Company or any entity treated as a single employer with the Company under Sections 414(b) or (c) of the Code other than as an employee, which other nonqualified deferred compensation plan is an account balance plan allowing the deferral of compensation at the election of the Director (each, an “Aggregated Plan”). An Aggregated Plan shall not be taken into account for purposes of this Section 5(b)(i) after the Director ceased to be eligible to defer compensation thereunder (other than through the accrual of earnings), provided either (i) all amounts due the Director under the Aggregated Plan have been paid to him or her, or (ii) he or she has not been eligible to defer compensation thereunder (other than through the accrual of earnings) for a period of at least twenty-four (24) months.
(ii)Elections made pursuant to the special rules of this Section 5(b) either (A) to change the time of payment of vested DSUs or (B) to convert any part of the Director’s Fees otherwise payable in cash into DSUs, may only apply to those Fees for the Director’s services attributable to the portion of the Board Year remaining after the Company’s receipt of the Director’s Election Form (including for this purposes the date the Company receives the Election Form, the 

“Post-Election Period”).  For a Board Year which begins prior to but ends subsequent to the Company’s receipt of a Director’s initial Election Form under this Section 5(b) the Fees payable with respect to the Post-Election Period will be an amount equal to (i) the total Fees payable to such Director for the applicable Board Year times (ii) a fraction, the numerator of which is the total number of days in the Post-Election Period and the denominator of which is the total number of days in the relevant Board Year after the Effective Date or after the Director is elected (including for purposes of this sentence the date the Director is elected with respect to such Board Year, and assuming that the applicable Board Year will end 365 days after the prior Annual Meeting of Stockholders).  The proration rule set forth in the preceding sentence does not apply to a Director’s election to convert any part of the Director’s Fees otherwise payable in cash into shares of Common Stock and instead any such election pursuant to the special rule of this Section 5(b) shall apply to all amounts of his or her Fees the Director has timely elected to convert into shares of Common Stock.
(c)    Election Forms Not Returned.  If no Election Form is timely submitted by a Director with respect to his or her compensation for any Board Year or part thereof, he or she shall be deemed to have elected (i) to receive payment for any DSUs granted for his or her services for such period which vest in accordance with the terms of the applicable Award Agreement on the third (3rd) anniversary of the applicable Grant Date and (ii) to receive in cash all of his or her Fees otherwise payable in cash for such period, to be paid as determined by the Board over the Board Year and subject to the Director’s continued service.
(d)    Elections Irrevocable.  Elections under Sections 3 and 4 and made pursuant to the general rule of Section 5(a) shall become irrevocable on the last day on which a valid election could be made pursuant to Section 5(a).  Elections under Sections 3 and 4 and made pursuant to the special rule of Section 5(b) shall become irrevocable on the Company’s receipt of the Director’s Election Form, duly completed.
6.Accounts. 
(a)Accounts.  The Company shall establish on its books an account (an “Account”) for each Participant, denominated in DSUs, each representing a conditional right to a share of Common Stock.  DSUs granted under an Award Agreement shall be credited to the Participant’s Account based on the number of shares of Common Stock specified in the Award Agreement.  For the avoidance of doubt, it is not intended that the Account would be maintained as a record of any shares of Common Stock the Director has elected to receive in lieu of Fees otherwise payable in cash.  
(b)Dividend Credits.  As of each date for payment of any dividend or other distribution on the Company’s Common Stock, each Participant’s Account shall be credited with a number of shares of Common Stock equal to (i) the total amount of any such dividend or distribution that would have been paid on the number of vested DSUs recorded in the balance of that Participant’s Account as of the record date for such dividend divided by (ii) the value of a share of Common Stock on the payment date for such dividend, based on the closing price of Company Common Stock on the NYSE on such payment date, rounded up or down to the nearest whole share.  Shares credited in lieu of dividends or distributions shall be subject to the same vesting provisions, and time of payment determinations, as the DSUs in respect of which such additional credits are made.
(c)Vesting of DSUs.  DSUs credited to a Participant’s Account shall remain subject to a Risk of Forfeiture in accordance with the terms and conditions of the applicable Award Agreement as well as the provisions of Section 10 below (including any provision for accelerated vesting on certain changes of control pursuant to Section 9 of the 2013 EIP).  Notwithstanding any provision of this Plan to the contrary, no Participant or other person shall have any right or claim under this Plan with respect to a DSU credited to the Participant’s Account but forfeited in accordance with the terms and conditions of the applicable Award Agreement. 
(d)Effect of Corporate Transaction on Stock Accounts.  If at any time subsequent to the Effective Date, the outstanding shares of Common Stock (or any other securities covered by this Plan by reason of the prior application of this Section) are adjusted, modified, increased, decreased, or exchanged for a different number or kind of shares, securities or other property (including cash), as a result of a merger or consolidation, reorganization, recapitalization, reclassification, or stock dividend, stock split, or reverse stock split, an appropriate and proportionate adjustment will be made in accordance with Section 8 of the 2013 EIP in the number DSUs credited to Accounts under this Plan.
(e)Statement of Account.  At the end of each Board Year, and at such other date or dates during a year as the Company may determine, the Company shall issue or shall cause to be issued to each Participant a statement setting forth the balance of the Participant’s Account under this Plan. 
7.Payment of Benefits.  
(a)In General.  Subject to the balance of Section 7, distributions of a Participant’s Account under this Plan shall be made in accordance with the time of distribution applicable to each DSU credited thereto, either in accordance with the elections of the Director timely made under Section 3 or under the default rule provided in Section 5(c) if applicable.
(b)Timing of Distribution to Satisfy Applicable Law.  The Committee or Board may delay any distribution from an Account if it reasonably anticipates that the making of the distribution will violate federal securities laws or other applicable laws until the earliest date that the Committee or Board reasonably anticipates that the making of such distribution will not cause such a violation.  If advisable to avoid exposing a Participant to a claim for recovery of short swing 

profits under Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), prior to the payment of the amount reflected in the Participant’s Account, such payment must be approved in advance by the Board or a committee comprised solely of “non-employee directors” as defined in Rule 16(b)-3(b)(3) under the Exchange Act.
(c)Form of Payments.  Distribution shall be made in the form of whole shares of Common Stock equal to the number of DSUs credited to the Participant’s Account as of the relevant date.  Each Participant or beneficiary agrees that prior to any distribution under this Plan, he or she will make such representations and execute such documents as are deemed by the Committee or Board to be necessary to comply with applicable laws. 
(d)Delays or Acceleration in Payments.  The Company may elect to accelerate the payment of any Account, in respect of vested DSUs, in the circumstances allowed by, and subject to the conditions required by Treas. Reg. §1.409A-3(j)(4), including but not limited to in connection with the issuance of domestic relations orders, for payment of employment taxes or upon income inclusion under Section 409A of the Code, as an offset for indebtedness or in settlement of bona fide disputes as to a right to a payment.  
(e)Designation of Beneficiaries; Death.  Each Participant shall have the right, at any time, to designate any person or persons as the Participant’s beneficiary or beneficiaries (both primary as well as secondary) to whom shares in respect of DSUs under this Plan shall be delivered in the event of the Participant’s death prior to complete distribution of the benefits due under this Plan.  Each beneficiary designation shall be in written form prescribed by the Company and will be effective only if filed with the Company during the Participant’s lifetime.  Such designation may be changed by the Participant at any time without the consent of a beneficiary.  If no designated beneficiary survives the Participant, the balance of the Participant’s shares in respect of vested DSUs shall be delivered to the Participant’s surviving spouse or, if no spouse survives, to the Participant’s estate.  Upon the death of a Participant, any shares in respect of DSUs shall be delivered, within forty-five (45) days after the Participant’s death, in a single distribution.
8.Administration. 
(a)Committee Duties.  This Plan shall be administered by the Committee, which shall have all of the authority expressly granted to the Committee and the Company under this Plan; provided, however, that at any time and on any one or more occasions the Board may itself exercise any of the powers and responsibilities assigned to the Committee under this Plan and when so acting shall have the benefit of all of the provisions of this Plan pertaining to the Committee’s exercise of its authority hereunder.  The Committee shall have responsibility for the general administration of this Plan and for carrying out its intent and provisions.  The Committee shall have plenary authority in its discretion to interpret this Plan; to prescribe, amend and rescind rules and regulations relating to it; to determine the terms of the Election Forms and Award Agreements executed and delivered under this Plan, including such terms and provisions as shall be requisite in the judgment of the Committee to conform to any change in any law or regulation applicable thereto; and have such powers and duties as may be necessary to discharge its responsibilities.  The Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel, who may be counsel to the Company. 
(b)Binding Effect of Decisions.  The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of this Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in this Plan.
9.Amendment and Termination of this Plan. 
(a)Amendment.  The Committee may at any time amend this Plan in whole or in part subject to any restrictions on modifications or amendments as provided in the 2013 EIP; provided, however, that no amendment shall affect the terms of any previously deferred DSUs or the terms of any irrevocable Election Form or Award Agreement of any Participant. 
(b)Termination.  The Committee or Board may at any time terminate this Plan, provided the termination does not occur proximate to a downturn in the financial health of the Company and there are then being terminated nonqualified deferred compensation plans which would be Aggregated Plans if the same non-employee individual were eligible to participate in this Plan and all such plans. In the event of a termination of this Plan under this Section 9(b), this Plan shall continue to operate for a period selected by the Board or Committee of at least twelve (12) months from the date the Board or Committee takes irrevocable action to terminate this Plan and this Plan shall continue to pay benefits otherwise payable under the terms of this Plan absent termination of this Plan. On a date selected by the Board or Committee that is more than twelve (12) months from the date the Board or Committee took irrevocable action to terminate this Plan, this Plan shall cease to operate and the Company shall determine the balance of each Participant’s Account as of the close of business on such date and the Company shall pay out such Account balances to the Participants in a single distribution as soon as practicable after such date, but in no event shall such distribution be made later than twenty-four (24) months after the date the Board or Committee took action to terminate this Plan.  In the event of termination of this Plan under this Section 9(b), the Company shall not establish another nonqualified deferred compensation plan providing elective deferrals on the part of Directors if the same non-employee individual were eligible to participate in this Plan and such plan within three (3) years of the Board or Committee taking irrevocable action to terminate this Plan.
(c)    Termination on Change in Control.   The Committee or Board may also terminate this Plan by irrevocable action at any time within thirty (30) days prior to or within twelve (12) months following a “change of control” (as defined for purposes of Section 409A of the Code), provided there are then being terminated all Aggregated Plans as to any 

Participant affected by the change of control.  In the event of a termination of this Plan under this Section 9(c), on a date selected by the Board or Committee that is no more than twelve (12) months from the date the Board or Committee took action to terminate this Plan, this Plan shall cease to operate, the Company shall determine the balance of each Participant’s Account as of the close of business on such date and the Company shall pay out such Account balances to the Participants in a single distribution as soon as practicable after such date, but in no event later than twelve (12) months after the date the Board or Committee took action to terminate this Plan. 
10.Certain Remedies.
(a)If at any time within two (2) years after termination of a Participant’s association with the Company and its Affiliates any of the following occur:
(i)the Participant unreasonably refuses to comply with lawful requests for cooperation made by the Company, its Board, or its Affiliates;
(ii)the Participant 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 Participant otherwise engages in competition with the Company or its Affiliates;
(iii)the Participant acts against the interests of the Company and its Affiliates, including recruiting or employing, or encouraging or assisting the Participant’s new employer to recruit or employ an employee of the Company or any Affiliate without the Company’s written consent;
(iv)the Participant fails to protect and safeguard while in his or her possession or control, or surrender to the Company upon termination of the Participant’s association with the Company or any Affiliate or such earlier time or times as the Company or its Board 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 Participant;
(v)the Participant solicits or encourages any person or enterprise with which the Participant 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; or
(vi)the Participant breaches any confidentiality obligations the Participant has to the Company or an Affiliate, the Participant fails to comply with the policies and procedures of the Company or its Affiliates for protecting confidential information, the Participant uses confidential information of the Company or its Affiliates for his or her own benefit or gain, or the Participant discloses or otherwise misuses confidential information or materials of the Company or its Affiliates (except as required by applicable law); then
(1)All of the DSUs credited to the Participant’s Account shall terminate and be cancelled effective as of the date on which the Participant entered into such activity, unless terminated or cancelled sooner by operation of another term or condition of this Plan or the 2013 EIP;
(2)any Stock acquired and held by the Participant pursuant to this Plan during the Applicable Period (as defined below) may be repurchased by the Company at a purchase price of $0.01 per share; and
(3)any gain realized by the Participant from the sale of Stock acquired pursuant to this Plan during the Applicable Period shall be paid by the Participant to the Company.
(b)The term “Applicable Period” shall mean the period commencing on the later of the date of an Award Agreement or the date which is one year prior to the Participant’s termination of association with the Company or any Affiliate and ending two years from the Participant’s termination of association with the Company or any Affiliate.
(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 hereto, which may be amended by the Company from time to time upon notice to the Participant.  At any time the Participant 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 Participant 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. The Company may deduct from any amounts the Company or any Affiliate owes the Participant from time to time, any amounts the Participant 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 Participant 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 Participant owes the Company, calculated as set forth above, the Participant 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 this Plan 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.Compliance with Laws.  
(a)Government Regulations.  This Plan, and the election of securities in lieu of Fees and the deferral of DSUs thereunder, and the obligation of the Company to issue, sell and deliver shares, as applicable, under the 2013 EIP, shall be subject to all applicable laws, rules and regulations.
(b)Compliance with Section 409A of the Code.  To the extent applicable, it is intended that this Plan comply with the provisions of Section 409A of the Code.  This Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Plan to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Board without the consent of the Participants in this Plan).  Notwithstanding the foregoing, no particular tax result for a Participant with respect to any income recognized by the Participant in connection with this Plan is guaranteed under this Plan, and the Participant shall be responsible for any taxes imposed on the Participant in connection with this Plan.
14.Miscellaneous. 
(a)No Interest in Assets.  The Accounts shall be established solely for the purpose of determining the number of DSUs owed to Participants or beneficiaries under this Plan.  Participants and their beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Company.  No assets of the Company shall be held under any trust for the benefit of the Participants, their beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan.  The Company’s obligation under this Plan shall be that of an unfunded and unsecured promise to deliver shares in respect of DSUs in the future, and the rights of Participants and beneficiaries shall be no greater than those of unsecured general creditors of the Company.  Nothing in this Plan shall be deemed to give any member of the Board any right to participate in this Plan, except in accordance with the provisions of this Plan.
(b)Non-assignability.  Neither a Participant nor any other person shall have the right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the shares in respect of any DSUs, if any, deliverable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be non-assignable and nontransferable.  No part of the shares deliverable in respect of any DSUs shall, prior to actual delivery, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency. 
(c)Governing Law.  The provisions of this Plan shall be construed and interpreted according to the laws of the State of Delaware, without regard to the conflicts of law principles thereof. 
(d)Validity.  In case any provision of this Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provisions had never been inserted herein. 
(e)Notice.  Any notice or filing required or permitted to be given to the Company or the Committee under this Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Secretary of the Company.  Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 
(f)Successors.  The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns. The term “successors” as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity. 
* * *Exhibit A

TEMPUR SEALY INTERNATIONAL, INC.

2013 EQUITY INCENTIVE PLAN
AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR 
DEFERRED COMPENSATION PLAN

Acknowledgement and Award Agreement
[Insert Board Member]

This Acknowledgement and Award Agreement (the “Agreement”), dated as of [_______ __, 20__], is 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 “Recipient”).  
1.    Award of Deferred Stock Units.  Pursuant and subject to the Company’s  2013 Equity Incentive Plan, as the same may be amended from time to time, (the “2013 EIP”), the Company grants the Recipient an award (the “Award”) for [Insert total of Mandatory DSUs and/or Elective DSUs, if any] deferred stock units  (“DSUs”) of the common stock, par value $0.01 per share, of the Company (the “Stock”) as compensation for the Recipient’s service as a member of the board of directors of the Company (the “Board”).  This Award is granted as of [_______ __, 20__] (the “Grant Date”).
2.    Rights of Deferred Stock Units.  The DSUs granted in this Agreement shall be credited to the Recipient’s account under the Company’s Amended and Restated Non-Employee Director Deferred Compensation Plan (as the same may be amended from time to time, the “Deferred Compensation Plan”).  All of the Recipient’s rights in or as a consequence of this grant of DSUs, to the extent the DSUs vest as determined in accordance with Section 3 below, shall thereafter be determined under the Deferred Compensation Plan.  As provided in the Deferred Compensation Plan, the Recipient shall have no rights to receive shares of Common Stock in or as a consequence of DSUs which do not vest as determined accordance with Section 3 below, except as provided in Section 4 below.
3.    Vesting Period and Rights; Delivery Date; and Filings.  The Award will vest in [four] installments as follows:
	
			
	Number of Shares
in Each Installment
	Percentage 
of the Award
	Vesting Date

	[______]
	[25]%
	________ __, 20__

	[______]
	[25]%
	________ __, 20__

	[______]
	[25]%
	________ __, 20__

	[______]
	[25]%
	________ __, 20__

Subject to the provisions of Section 4 below, the vesting is subject to the Recipient’s continued service on the Board of the Company on the applicable vesting date as set forth above (the “Vesting Date”).
The Recipient is responsible for any filings required under Section 16 of the Securities Exchange Act of 1934 and the rules thereunder.
4.    Termination of Service.  If the Recipient’s membership with the Board of the Company ends for any reason, the Recipient forfeits all rights and interest in any unvested DSUs; provided, however, if the Recipient dies or the Recipient’s membership with the Board ends due to the Recipient’s long-term disability (within the meaning of Section 409A of the Code), all of the DSUs that have not become vested pursuant to Section 3 as of the date of death or disability shall immediately vest.  
5.    Acceleration in Certain Cases.  In lieu of the Change of Control provisions of Section 9 (a) and (b) of the 2013 EIP and notwithstanding anything herein to the contrary, if a Change of Control occurs this Agreement shall remain in full force and effect in accordance with its terms subject to the following.  In the event of such Change of Control, any Risk of Forfeiture (as defined in the 2013 EIP) applicable to the DSUs shall lapse with respect to 50% of the DSUs still subject to such Risk of Forfeiture immediately prior to the Change of Control.  For the purposes of this Agreement, “Change of Control” shall have the meaning set forth in the 2013 EIP, 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.
6.    Incorporation of Plan Terms; Acknowledgements.  Except as provided in Section 5, this Award is granted subject to all of the applicable terms and provisions of the 2013 EIP and the Deferred Compensation Plan.  Without limiting the generality of the foregoing, the Recipient acknowledges that under the terms of the 2013 EIP and Deferred Compensation Plan:
(a)    The Company may recover any payment under the Deferred Compensation Plan if within two years of the Recipient’s termination of service with the Company he or she fails comply with certain covenants (including but not limited, competing with the Company and its Affiliates).  By executing this Agreement, the Recipient consents to a deduction from any amounts the Company or any Affiliate owes the Recipient from time to time, to the extent of the amounts the Recipient owes the Company under said Sections 10 and 11 of the Deferred Compensation Plan (provided that the set-off right 

will not be applied against wages, salary or other amounts payable to the Recipient to the extent that the exercise of such set-off right would violate any applicable law) and agrees that if the Company does not recover by means of set-off the full amount the Recipient owes the Company, calculated as set forth above, the Recipient will pay immediately the unpaid balance to the Company upon the Company’s demand.
(b)    The Company is not liable for the non-issuance or non-transfer, nor for any delay in the issuance or transfer of any shares of Stock due to the Recipient with respect to vested DSUs which results from the inability of the Company to obtain, from each regulatory body having jurisdiction, all requisite authority to issue or transfer shares of Stock of the Company if counsel for the Company deems such authority necessary for the lawful issuance or transfer of any such shares. Acceptance of this Award constitutes the Recipient’s agreement that the shares of Stock subsequently acquired hereunder, if any, will not be sold or otherwise disposed of by the Recipient in violation of any applicable securities laws or regulations.
(c)    The DSUs are subject to this Agreement and Recipient’s acceptance hereof shall constitute the Recipient’s agreement to any administrative regulations of the Compensation Committee of the Company’s Board (the “Committee”).  In the event of any inconsistency between this Agreement and the provisions of the 2013 EIP or Deferred Compensation Plan, the provisions of such plans shall prevail. 
(d)    All decisions of the Committee upon any questions arising under the 2013 EIP or Deferred Compensation Plan or under these terms and conditions are conclusive and binding.
(e)    During the Recipient’s lifetime, no rights under the Deferred Compensation Plan related to the Award, the DSUs or any underlying Stock payable in satisfaction of vested DSUs, shall be transferable except by will or the laws of descent and distribution.
(f)    The Company makes no representation or warranty as to the tax treatment of this Award, including upon the issuance of the Stock or upon the Recipient’s sale or other disposition of the Stock.  The Recipient should rely on his own tax advisors for such advice.
(g)    All Stock earned and delivered pursuant to this Agreement and the Deferred Compensation Plan 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 of the Code. The Recipient 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.
7.    Miscellaneous.  Capitalized terms used but not defined herein shall have the meaning assigned under the 2013 EIP and the Deferred Compensation Plan.  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 Recipient.  This Agreement may be executed in one or more counterparts all of which together shall constitute one instrument.
[Remainder of page intentionally left blank]
In Witness Whereof, the parties have executed this Agreement as of the date first above written.

	
		
	TEMPUR SEALY INTERNATIONAL, INC. 

	By:
	_______________________________

	Name: 
	_______________________________

	 
	 

	RECIPIENT

	_________________________________________

	Name:
	 

	Recipient’s Address: 

	_________________________________________

	_________________________________________

	_________________________________________

	_________________________________________

	 

Exhibit B
TEMPUR SEALY INTERNATIONAL, INC.
AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR DEFERRED COMPENSATION PLAN
ELECTION FORM
Director Information
Director Name:        
  Last    First    Initial

Director Address:        
 Street

        
         City                                                            State                Zip
    
Director SSN:     ___________________________________

Background and Purpose

The Board of Directors (the “Board”) upon recommendation of the Compensation Committee of Tempur Sealy International, Inc. (the “Company”), has approved payment of part of the compensation for the service of non-employee directors of the Board in the form of deferred restricted stock units (“Mandatory DSUs”). Mandatory DSUs are subject to the terms of the Company’s Amended and Restated Non-Employee Director Deferred Compensation Plan (as the same may be amended from time to time, the “Deferred Compensation Plan”) and the Company’s 2013 Equity Incentive Plan, as amended from time to time (the “2013 EIP”).  Mandatory DSUs vest in accordance with the terms of an Award Agreement issued under the 2013 EIP and under and subject to the terms of the Deferred Compensation Plan and are payable, if vested, three (3) years after the date of grant unless the director elects a later date of payment under the Deferred Compensation Plan.  The Board has also approved the issuance of shares of the Company’s Common Stock, or the grant of additional deferred stock units (“DSUs”) subject to the terms of the Deferred Compensation Plan and the 2013 EIP (the “Elective DSUs”), at the election of the non-employee director and in lieu of some or all of the cash compensation otherwise approved by the Board as compensation for the non-employee director’s service.  

The purpose of this Election Form is to solicit the foregoing elections, as follows:

		
	•
	A “Deferral Election,” enabling a non-employee director to elect to defer payment of any Mandatory DSUs and any Elective DSUs to the later of:

(i)    the third (3rd) anniversary of the Grant Date; and

(ii)    the earlier of his or her Separation of Service (as defined in the Deferred Compensation Plan) and a fixed date after the third (3rd) anniversary of the Grant Date, which must be May 1 of the year designed by the Director; and/or

		
	•
	An “Equity Election,” enabling a non-employee director to elect to receive some or all of his or her compensation otherwise payable in cash in the form of either shares of Common Stock, or Elective DSUs.

Capitalized terms used but not defined herein shall have the meaning assigned such terms under the 2013 EIP and Deferred Compensation Plan.

Deferral Election

 By checking the box, I hereby elect to defer any payment in respect of Mandatory and Elective DSUs granted to me during the [20XX-20XX] Board Year, until the later of 

(i)    the third (3rd) anniversary of the Grant Date specified in the Award Agreement pertaining to those DSUs; or

(ii)    the earlier of my Separation of Service and the following fixed date: May 1, 20__. Insert a May 1 that falls after the third (3rd) anniversary of the Grant Date.

I understand that if I do not make the deferral election set forth above, payment of Mandatory and Elective DSUs will be made on the third (3rd) anniversary of the applicable Grant Date.  I further understand these DSUs will vest as determined under the applicable Award Agreement and my receipt of vested DSUs is subject to my continued service on the Board during the Board Year and the other terms and conditions of the Deferred Compensation Plan.  I understand if my service on the Board ends during the [20XX-20XX] Board Year, I will forfeit any unvested DSUs, except as provided in Section 4 of the applicable Award Agreement. 

Equity Election 

I hereby elect to take my annual cash fees (including both Board and committee fees, as applicable) that would otherwise be payable to me for services rendered during the [20XX-20XX] Board Year:

____% in cash payable as determined by the Board in the action approving such compensation; and

____% in shares of common stock of the Company, in a number equal to the percentage of the cash otherwise payable that I have indicated divided by the closing price of the Company’s common stock on the NYSE on the date or dates as such cash would otherwise be payable, rounded down to the nearest whole share, plus a cash payment in the amount of any fractional share of Common Stock then otherwise distributable, issuable as determined by the Board in the action approving such compensation; and

____% in Elective DSUs, in a number equal to the percentage of the cash otherwise payable that I have indicated divided by the closing price of the Company’s common stock on the NYSE on the Grant Date under the applicable Award Agreement (which will be a date on or abut the beginning of the applicable Board Year). 

I understand receipt of either cash fees or Common Stock is subject to my continued service on the Board during the Board Year, and that any Elective DSUs will vest, if ever, as determined under the applicable Award Agreement.  I understand my receipt of vested DSUs is subject to my continued service on the Board during the Board Year and the other terms and conditions of the Deferred Compensation Plan.  I understand if my service on the Board ends during the [20XX-20XX] Board Year, I will forfeit any unearned or unvested cash, Common Stock, or DSUs, except as provided in Section 4 of the applicable DSU Award Agreement.

Acknowledgement and Authorization

I understand that any elections on this Form will apply only to compensation payable for services as a non-employee director to be rendered in the portion of 2013 following the effective date of the Deferred Compensation Plan (or my submission of this 

election, if later) and subject to the adoption of the Deferred Compensation Plan by the Board.  I further understand that all elections on this Form are irrevocable.  I hereby certify that the above participant information is true, accurate and complete. NTD: Paragraph to include for the initial election.

I understand that any elections on this Form will apply only to compensation payable for services as a non-employee director to be rendered in the portion of [insert specific Board Year] following my submission of this election.  I further understand that all elections on this Form are irrevocable.  I hereby certify that the above participant information is true, accurate and complete. NTD: Paragraph to include for new directors.

I understand that any elections on this Form will apply only to compensation payable for services as a non-employee director to be rendered in the [insert specific Board Year] Board Year.  I further understand that all elections on this Form will become irrevocable on the December 31 preceding that Board Year.  I hereby certify that the above participant information is true, accurate and complete. NTD: Paragraph to include for subsequent elections.

Director            Date    

Accepted:

	
		
	TEMPUR SEALY INTERNATIONAL, INC. 

	By:
	_______________________________

	Name: 
	_______________________________

Date:    
Appendix A
Competitive Enterprises of the Company and its Affiliates
	
	
	Ace

	AH Beard

	Auping

	Ashley Sleep

	Boyd

	Carpe Diem

	Carpenter

	Carolina Mattress

	Cauval Group

	Chaide & Chaide

	Classic Sleep Products

	Comforpedic

	Comfort Solutions

	COFEL group

	De Rucci

	Diamona

	Doremo Octaspring

	Dorelan

	Dunlopillo

	Duxiana

	Eastborne

	Eminflex

	Englander

	Flex Group of Companies

	Foamex

	
	
	France Bed

	Future Foam

	Harrisons

	Hastens

	Hilding Anders Group

	Hypnos

	IBC

	KayMed

	King Koil

	Kingsdown

	Lady Americana

	Land and Sky

	Leggett & Platt

	Lo Monaco

	Magniflex

	Metzler

	Myers

	Optimo

	Ortobom

	Natura

	Natures Rest

	Park Place

	Permaflex

	Pikolin Group

	Recticel Group

	Relyon

	Restonic

	Rosen

	Rowe

	Sapsa Bedding

	Select Comfort

	Serta and any direct or indirect parent company

	Silentnight

	Simmons Company/Beautyrest and any direct or indirect parent company

	Sleepmaker

	Spring Air

	Sterling

	Stobel

	Swiss Comfort

	Swiss Sense

	TherapedicExhibit 10.33-TPX-2014.12.31.14 10K

EMPLOYMENT AND NON-COMPETITION AGREEMENT
(Jay Spenchian) 

 
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (the “Agreement”) is executed as of this  18  day of November, 2014, and is effective as of December 1, 2014 (the “Date of Hire”), by and between Tempur Sealy International, Inc., a Delaware corporation (the “Company”), and Jay Spenchian, an individual (“Employee”).
 
    In consideration of the premises and the mutual agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is 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, and Employee accepts employment by the Company, for the period commencing on the Date of Hire and ending on the first anniversary of the Date of Hire (the “Initial Term”), subject to earlier termination as hereinafter set forth in Article III.  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 ninety (90) days prior to the expiration of the Initial Term or the then current Renewal Term, either party provides the other 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 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.

The expiration of the Agreement at the end of the Initial Term or any Renewal Term by reason of the Company giving notice of nonrenewal pursuant to this Section 1.1, other than if the Company specifies that the reason for the non-renewal, and related termination of employment, otherwise qualifies as:

		
	•
	a “For Cause” termination pursuant to Section 3.1(c) or 

		
	•
	a “Death or Disability” termination pursuant to Section 3.1(d) 

shall be deemed a termination by the Company “without Cause” pursuant to Section 3.1(a) of this Agreement, and Employee shall be eligible to receive the benefits set forth in Section 3.2(a).  

 
1.2  Position and Duties.  Employee shall be employed in the position of Executive Vice President, Chief Marketing Officer or such other executive position as may be assigned from time to time by the Company’s Chief Executive Officer; provided that any executive position that does not also include continuing in the role of Chief Marketing Officer will require the consent of the Employee.  In such capacity, Employee shall be subject to the authority of, and shall report to, the Company’s Chief Operating Officer.  Employee’s duties and responsibilities shall include those customarily attendant to Employee’s position and such other duties and responsibilities as may be assigned from time to time by the Chief Operations Officer.  Employee shall devote Employee’s entire business time, loyalty, attention and energies exclusively to the business interests of the Company while employed by the Company, and shall perform his duties and responsibilities diligently and to the best of his ability.
 
1.3  Other Documents.  On or prior to the Date of Hire the Employee will execute and deliver to the Company the following:  Relocation Repayment Agreement and Code of Business Conduct and Ethics and Policy on Insider Trading and Confidentiality acknowledgements, each in the form previously furnished by the Company.

ARTICLE II

COMPENSATION AND OTHER BENEFITS

2.1  Base Salary.  The Company shall pay Employee an initial annual salary of $440,000.00 (“Base Salary”), payable in accordance with the normal payroll practices of the Company.  The Employee’s Base Salary will be reviewed and be subject to adjustment from time to time by the Board of Directors or its Compensation Committee at their discretion in accordance with the Company’s annual review policy.  Based on the Company’s current policy, the Company expects Employee’s first annual review would be during the first quarter of 2016.
 
2.2  Performance Bonus.  Employee will be eligible to earn an annual performance-based bonus based on performance criteria approved by the Company’s Board of Directors or its Compensation Committee for each full or pro rata portion of any fiscal year during which Employee is employed by the Company commencing with 2015 (each, a “Bonus Year”), the terms and conditions of which as well as Employee’s entitlement thereto being 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 achievement of Company and individual performance criteria established by the Company’s Board of Directors or its Compensation Committee, but the performance criteria will be set to target a Performance Bonus equal to a designated percentage of Base Salary as of December 31st of the applicable Bonus Year if the performance criteria are met (the “Target Bonus”).  The performance criteria for Employee’s 2015 Performance Bonus will be determined in accordance with the Company’s Annual Incentive Bonus Plan For Senior Executives, and the performance criteria will be set to target a Performance Bonus equal to 65% of Employee’s Base Salary.  Unless otherwise provided under Section 3.2, Employee shall not be eligible to receive payment of a Performance Bonus unless Employee was employed by the Company on December 31st of the applicable Bonus Year.
 
2.3  Grant of Equity           

(a)           Pursuant to the Tempur Sealy International, Inc. 2013 Equity Incentive Plan, as amended, effective as of the Date of Hire (for purposes of this paragraph, the “Grant Date”) the Employee shall be granted an award (the “Award”) of restricted stock units (the “RSUs”) each such RSU representing the right to a share of the common stock, par value $0.01 per share, of the Company (the “Stock”) having a grant date fair value equal to six hundred thousand dollars ($600,000) on the date of grant, rounded up or down to the nearest whole share.  Such Award shall be made pursuant to and subject to the terms and conditions of a Restricted Stock Unit Award Agreement between the Company and Employee (“Award Agreement”) in the form attached hereto as Exhibit A.  Subject to the provisions of the Award Agreement, this Award shall vest in full on the third anniversary of the Grant Date. 

(b)           The Company expects that Employee will be considered for an additional equity award in the first quarter of 2015 in accordance with the Company’s normal executive compensation practices, and annually thereafter, but the timing, amount and terms of any future grants will be subject to the discretion of the Board of Directors or the Compensation Committee.

2.4  Hiring Bonus. As additional consideration for Employee’s agreement to accept employment with the Company, the Company will pay to Employee a one-time bonus of $636,765.  This bonus is payable ninety (90) days after the Date of Hire, provided that, as of the date payment would otherwise be made, the Employee is considered an employee of the Company in good standing; and provided further that in the event that, within twelve months of the Date of Hire, Employee is terminated for Cause pursuant to paragraph 3.1(c) below, or resigns his employment with the Company other than for Good Reason, Employee shall repay to the Company the entire amount of the bonus described above within thirty (30) days of the termination of Employee's employment.

2.5  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 welfare benefit plans that are generally applicable to all executive employees of the Company (the “Plans”), in accordance with the terms and conditions thereof.  A brief description of the Company’s current benefits is contained in Exhibit B hereto.

2.6  Automobile Allowance.  The Company shall pay to Employee an automobile allowance of $600.00 per month.

2.7  Vacation.  Employee shall be entitled to three weeks (fifteen (15) days) vacation days in the calendar year after the Date of Hire and three weeks (fifteen days) at Employee’s one-year anniversary and each year thereafter, subject to and to be taken in accordance with the Company’s general vacation policies for similarly situated executive employees.

2.8  Relocation Benefits.  The Company will provide Employee with relocation assistance in accordance with the policy and other provisions set forth in Exhibit C.

2.9  Expenses.  The Company shall reimburse Employee for all authorized and approved expenses 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.

2.10  Withholdings.  All payments to be made by the Company hereunder will be subject to any withholding requirements.

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 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.  “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), or (ii) the Company’s 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 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 or any other written agreement between Employee and the Company which is not cured within thirty (30) days after receipt by the Employee from the Company of written notice of such breach, (iii) any material violation of any written policy of the Company which is not cured within thirty (30) days after receipt by Employee from the Company of written notice of such violation, (iv) Employee’s willful misconduct which is 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), 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 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 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 the Employee.  The 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(d) 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) and 3.1(b) Termination.  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, following execution of a release and waiver in form satisfactory to the Company in the case of clauses (ii), (iii) and (v) below, (i) any unpaid Base Salary and the value of any accrued but unused vacation, (ii) a pro-rata portion of any Performance Bonus that would be payable with respect to the Bonus Year in which the termination occurs (based on the number of days of the Bonus Year prior to the effective date of termination and the amount of the Target Bonus set by the Board of Directors or Compensation Committee for the Employee for such Bonus Year) and whatever rights to equity awards Employee may have pursuant to any equity award agreements with the Company, (iii) payment of Base Salary for twelve (12) months (the “Severance Period”), payable in accordance with the normal practices of the Company, (iv) reimbursement of expenses to which Employee is entitled under Section 2.9 hereof, and (v) continuation of the welfare plans of the Company as detailed in Section 2.5 hereof for the duration of the Severance Period.

(b)  Section 3.1(c) and 3.1(d) Terminations or Voluntary Resignation.  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, following execution of a release and waiver in form satisfactory to the Company in the case of clause (iii) below, (i) any unpaid Base Salary, (ii) in the case of Section 3.1(d) hereof, the value of any accrued but unused vacation, (iii) in the case of Section 3.1(d) hereof, a pro-rata portion (based on the number of days of the Bonus Year prior to the effective date of termination) of any Performance Bonus that would be payable with respect to the Bonus Year in which the termination occurs, and whatever rights as to equity awards as Employee may have pursuant to the any equity award agreement with the Company and (iv) reimbursement of expenses to which Employee is entitled under Section 2.9 hereof.
  

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 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 the Employee relating to the Company’s business or the business of any subsidiary or affiliate of the Company during the term of the 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, the 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 nominees 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.

(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 one 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 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 Restricted Stock Unit Award Agreement attached hereto as Exhibit A) 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.

4.3  Non-solicitation.  For a two 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 months prior to leaving his employment with the Company or any of its subsidiaries to leave their employment with the Company.

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 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, the 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 the Employee releases the Company from any claimed liability or damage caused to the 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 seek 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.  Said arbitration shall be conducted in Lexington, Kentucky.  The parties further agree that the arbitrator may resolve issues of contract interpretation as well as law and award damages, if any, to the extent provided by the 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 under the Federal Rules of Civil Procedure 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 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 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.  The arbitrator also shall make a determination regarding which party’s legal position in any such controversy or claim is the more substantially correct (the “Prevailing Party”) and the arbitrator shall require the other party to pay the legal and other professional fees and costs incurred by the Prevailing Party 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 prior 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: Chief Executive Officer
With a copy to Executive Vice President and General Counsel

(b) If to Employee:  

Jay Spenchian
790 Pinetree Rd.
Winter Park, FL  32789

6.2  Entire Agreement.  This Agreement, together with the exhibits hereto, 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  Miscellaneous.  This Agreement may be altered, amended or modified only in a 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 the Employee hereby consent to the exclusive jurisdiction of the Commonwealth of Kentucky for this purpose.  The parties 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 responsible for the drafting thereof.

6.8.  Effective Date.  The terms and conditions of this Agreement shall be effective as of the Date of Hire.  In the event of the failure of Employee to commence his employment with the Company (or at such other date as the Employee and the Company may mutually agree), this Agreement shall be null and void and of no force or effect.

6.9.  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 the 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, the 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 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 calendar month immediately following the month in which Employee’s “separation from service” occurs or, if earlier, upon the 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 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.

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

[Remainder of Page Intentionally Left Blank]

  

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

COMPANY:

TEMPUR SEALY INTERNATIONAL, INC.

By:    /s/ Brad Patrick                                                   
Title: EVP/Chief Human Resources Officer    

EMPLOYEE:

  /s/ Jay Spenchian                                                         
Jay Spenchian

WITNESSED BY:

  /s/ Rachel Wheeler                                              

Date:     11/18/14                                                   

Exhibits:

Exhibit A                      Form of Restricted Stock Unit Award Agreement
Exhibit B                      2015 U.S. Benefits Guide
Exhibit C                      Executive Relocation Program Guide

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