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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Tempur Sealy International Inc | NYSE:TPX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.04 | -0.08% | 50.38 | 51.97 | 50.29 | 51.50 | 1,444,079 | 22:30:00 |
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to § 240.14a-12
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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elect eight Directors to each serve for a one-year term and until the Director's successor has been duly elected and qualified;
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ratify the appointment of Ernst & Young LLP as the Company's independent auditors for the year ending
December 31, 2019
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hold an advisory vote to approve the compensation of our Named Executive Officers; and
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transact such other business as may properly come before the meeting or any adjournment thereof.
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PROXY STATEMENT
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VOTE BY INTERNET
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VOTE BY TELEPHONE
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VOTE BY MAIL
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http://www.proxyvote.com
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1-800-690-6903
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24 hours a day/7 days a week until 11:59 p.m. Eastern Time on May 8, 2019 for shares held directly and by 11:59 p.m. Eastern Time on May 6, 2019 for shares held in a Plan.
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Toll-free 24 hours a day/7 days a week until 11:59 p.m. Eastern Time on May 8, 2019 for shares held directly and by 11:59 p.m. Eastern Time on May 6, 2019 for shares held in a Plan.
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Sign and date the proxy card and return it in the enclosed postage-paid envelope.
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Use the Internet to vote your proxy. Have your proxy card in hand when you access the website.
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Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
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Are present and vote in person at the Annual Meeting; or
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Have properly submitted a proxy card, via the Internet, telephone or by mail.
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Election of eight (8) Directors to each serve for a one-year term and until the Director's successor has been duly elected and qualified (Proposal One).
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Ratification of the appointment of the firm of Ernst & Young LLP as Tempur Sealy International's independent auditors for the year ending
December 31, 2019
(Proposal Two).
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Advisory vote to approve the compensation of our Named Executive Officers (Proposal Three).
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Each Director shall be elected by the affirmative vote of a majority of the votes cast at the Annual Meeting. The term "majority of the votes cast" means that the number of shares voted "for" a Director must exceed the number of shares voted "against" that Director, and for purposes of this calculation, abstentions, "broker non-votes" and "withheld votes" will not count as votes cast.
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Ratification of the appointment of Ernst & Young LLP as independent auditors for the year ending
December 31, 2019
requires the affirmative vote of the majority of shares present or represented by proxy and entitled to vote at the Annual Meeting.
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Approval of the advisory vote on the compensation of our Named Executive Officers requires the affirmative vote of the majority of shares present or represented by proxy and entitled to vote at the Annual Meeting.
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For proposals other than the election of Directors, abstentions are counted as votes present and entitled to vote and have the same effect as votes "against" the proposal.
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Broker non-votes, if any, will be handled as described below.
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Proposal One: "FOR" the election of eight (8) Directors to each serve for a one-year term and until the Director's successor has been duly elected and qualified.
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Proposal Two: "FOR" the ratification of the appointment of the firm of Ernst & Young LLP as Tempur Sealy International's independent auditors for the year ending
December 31, 2019
.
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Proposal Three: "FOR" the advisory vote to approve the compensation of our Named Executive Officers.
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Seventh Amended and Restated By-Laws ("By-Laws")
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Core Values
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Corporate Governance Guidelines
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Code of Business Conduct and Ethics for Employees, Executive Officers, and Directors
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Policy on Complaints on Accounting, Internal Accounting Controls and Auditing Matters
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Amended and Restated Certificate of Incorporation, as amended ("Certificate of Incorporation")
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Audit Committee Charter
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Compensation Committee Charter
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Nominating and Corporate Governance Committee Charter
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Lead Director Charter
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Related Party Transactions Policy
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Governance Hotline Information
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Conflict Minerals Policy
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Clawback Policy
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Contact the Lead Director (by email)
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presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent Directors;
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has the authority to call meetings of the independent Directors;
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serves as the principal liaison between the Chairman and the independent Directors;
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consults with the Chairman regarding all information sent to the Board, including the quality, quantity, appropriateness and timeliness of such information;
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consults with the Chairman regarding meeting agendas for the Board;
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consults with the Chairman regarding the frequency of Board meetings and meeting schedules, assuring there is sufficient time for discussion of all agenda items;
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recommends to the Nominating and Corporate Governance Committee and to the Chairman selections for the membership and chairman position for each Board committee;
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interviews, along with the chair of the Nominating and Corporate Governance Committee, all Director candidates and makes recommendations to the Nominating and Corporate Governance Committee; and
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is invited to attend meetings of all other committees of the Board (other than meetings of committees on which he or she is already a member).
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Name of Director
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Audit Committee
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Compensation Committee
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Nominating and Corporate Governance Committee
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Evelyn S. Dilsaver
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Chair
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√
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Cathy R. Gates
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√
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John A. Heil
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√
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Chair
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Jon L. Luther
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Chair
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√
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Richard W. Neu
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√
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√
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Arik W. Ruchim
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√
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√
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reviewing the scope of internal and independent audits;
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reviewing the Company's quarterly and annual financial statements and related SEC filings;
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reviewing the adequacy of management's implementation of internal controls;
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reviewing the Company's accounting policies and procedures and significant changes in accounting policies;
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reviewing the Company's business conduct, legal and regulatory requirements and ethics policies and practices;
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reviewing the Company's policies with respect to risk assessment and risk management;
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reviewing information to be disclosed and types of presentations to be made in connection with the Company's earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies;
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preparing an annual evaluation of the committee's performance and reporting to the Board on the results of this self-evaluation;
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reporting regularly to the Board on the committee's activities; and
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appointing the independent public accountants and reviewing their independence and performance and the reasonableness of their fees.
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reviewing and approving on an annual basis the corporate goals and objectives with respect to compensation for the CEO, evaluating at least once a year the CEO's performance in light of these established goals and objectives and, based upon these evaluations, determining and approving the CEO's annual compensation, including salary, bonus, incentive, equity compensation, perquisites and other personal benefits;
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reviewing and approving on an annual basis, with the input of the CEO, the corporate goals and objectives with respect to the Company's compensation structure for all executive officers (other than the CEO), including perquisites and other personal benefits, and evaluating at least once a year the executive officers' performance in light of these established goals and objectives and, based upon these evaluations, determining and approving the annual compensation for these executive officers, including salary, bonus, incentive, equity compensation, perquisites and other personal benefits;
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reviewing on an annual basis the Company's compensation policies, including salaries and annual incentive bonus plans, with respect to the compensation of employees whose compensation is not otherwise set by the Compensation Committee;
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reviewing the Company's incentive compensation and stock-based plans and approving changes in such plans as needed, subject to any approval of the Board required by applicable law or the terms of such plans, and having and exercising all the authority of the Board with respect to the administration of such plans;
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reviewing on an annual basis the Company's compensation structure for its Directors and making recommendations to the Board regarding the compensation of Directors;
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reviewing at least annually the Company's compensation programs with respect to overall risk assessment and risk management, particularly with respect to whether such compensation programs encourage unnecessary or excessive risk taking by the Company;
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reviewing and discussing with management the "Compensation Discussion and Analysis," and based on such review and discussions, making recommendations to the Board regarding inclusion of that section in the Company's proxy statement for any annual meeting of stockholders;
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preparing and publishing an annual executive compensation report in the Company's proxy statement;
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reviewing and recommending to the Board for approval the frequency with which the Company will conduct Say-on-Pay Votes and reviewing and approving the proposals regarding Say-on-Pay Vote and the frequency of the Say-on-Pay Vote to be included in the Company's proxy statement for any annual meeting of stockholders;
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reviewing and approving employment agreements, severance arrangements and change in control agreements and provisions when, and if, appropriate, as well as any special supplemental benefits;
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conducting an annual evaluation of the committee's performance and reporting to the Board on the results of this self-evaluation; and
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reporting regularly to the Board on the committee's activities.
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identifying individuals qualified to become members of the Board;
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recommending to the Board Director nominees to be presented at the Annual Meeting of Stockholders and to fill vacancies on the Board;
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developing appropriate criteria for identifying properly qualified director candidates;
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annually reviewing the composition of the Board and the skill sets and tenure of existing Directors and discussing longer-term transition issues;
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annually reviewing and recommending to the Board members for each standing committee of the Board;
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monitoring and participating in the Company's overall stockholder communications effort so that all of the communications elements are unified and consistent; members of the Committee, individually or collectively, may attend, with management, meetings with stockholders of the Company when requested by the Board or management;
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establishing procedures to assist the Board in developing and evaluating potential candidates for executive positions, including the CEO;
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reviewing various corporate governance-related policies, including the Code of Business Conduct and Ethics, the Related Party Transactions Policy, and the Policy on Insider Trading and Confidentiality and recommending changes, if any, to the Board;
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reviewing and evaluating related party transactions;
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developing, annually reviewing and recommending to the Board corporate governance guidelines for the Company;
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establishing procedures to exercise oversight of the Company's adherence to such guidelines and the evaluation of the Board and Company management;
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reviewing at least annually the reports on the Company prepared by the major proxy advisory firms and provide a report to the Board;
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developing and overseeing, when necessary, a Company orientation program for new Directors and a continuing education program for current Directors and periodically reviewing these programs and updating them as necessary;
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making recommendations to the Board in connection with any Director resignation tendered pursuant to the Company's Amended and Restated By-Laws;
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preparing an annual evaluation of the committee's performance and reporting to the Board on the results of this self-evaluation; and
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reporting regularly to the Board on the committee's activities.
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Name
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Age
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Position
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Scott L. Thompson
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60
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Chairman of the Board, President and Chief Executive Officer
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Bhaskar Rao
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53
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Executive Vice President and Chief Financial Officer
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Richard W. Anderson
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59
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Executive Vice President and President, North America
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David Montgomery
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58
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Executive Vice President, Global Business Strategy and Development
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Scott Vollet
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55
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Executive Vice President, Global Operations
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H. Clifford Buster, III
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49
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Executive Vice President, Direct to Consumer, North America
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•
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each person known to beneficially own more than 5% of Tempur Sealy International's outstanding common stock;
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each of Tempur Sealy International's Directors and Named Executive Officers (as defined below in "Executive Compensation and Related Information"); and
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all of Tempur Sealy International's Directors and executive officers as a group.
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Shares Beneficially Owned
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Number of
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Percentage
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Name of Beneficial Owner:
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Shares
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of Class
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5% Stockholders:
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H Partners Management, LLC
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8,000,000
(1)
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14.72
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Manulife Financial Corporation
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5,568,729
(2)
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10.22
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Route One Investment Company, L.P.
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5,092,739
(3)
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9.30
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The Vanguard Group
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4,175,885
(4)
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7.66
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BlackRock, Inc.
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4,024,979
(5)
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7.40
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Dynamo Internacional Gestão de Recursos Ltda.
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2,723,121
(6)
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5.00
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Named Executive Officers and Directors:
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Scott L. Thompson
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897,140
(7)(8)
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1.62
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Bhaskar Rao
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48,297
(8)
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*
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Richard W. Anderson
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138,500
(8)
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*
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David Montgomery
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455,930
(8)
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*
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Scott Vollet
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50,208
(9)
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*
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Evelyn S. Dilsaver
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39,651
(8)
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*
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Cathy R. Gates
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2,108
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*
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John A. Heil
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36,400
(8)
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*
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Jon L. Luther
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20,304
(8)
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*
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Richard W. Neu
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44,872
(8)
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*
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Arik W. Ruchim
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see Note
(1)
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see Note
(1)
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Robert B. Trussell, Jr.
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25,050
(8)(9)
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*
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All Executive Officers and Directors as a group (13 persons):
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1,790,566
(8)
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3.23
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•
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Scott L. Thompson, Chairman, President and Chief Executive Officer ("CEO");
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Bhaskar Rao, Executive Vice President and Chief Financial Officer ("CFO");
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Richard W. Anderson, Executive Vice President and President, North America;
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David Montgomery, Executive Vice President, Global Business Strategy and Development; and
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•
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Scott J. Vollet, Executive Vice President, Global Operations
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Compensation Element
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Stockholder Feedback
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Our Response
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Annual Base Salary
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● Pay for performance
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● Executives did not receive any increases in annual base salary for 2019. Our CEO has not received an increase in annual base salary since he was hired in 2015.
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Annual Incentive Plan (AIP) Awards
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● Use stock price or free cash flow as a metric instead of using financial metrics such adjusted EBITDA
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● We have more control over how we generate earnings than our stock price, so we believe earnings is a better metric, and our long-term incentive values are based on stock price.
● We believe that a focus on a single metric is the best motivational tool for our business.
● Focus on the generation of free cash flow is critical to our long term capital allocation and revenue growth strategies. We do not believe that it serves as an effective metric for our annual incentive plan as it could, at times, be in conflict with our long term business initiatives.
● We did not pay annual bonuses in 2018 because adjusted EBITDA was below our expectations.
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Annual Long Term Incentive Awards (Stock Options & RSUs)
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● Discuss the performance incentive and how decisions are made to allocate between stock options and RSUs
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● LTIP grants, particularly RSUs, provide significant long-term retention incentives. This mitigates turnover among the management team. A cohesive and stable management team is viewed by us as having substantial value to shareholders.
● We have a rigid employee performance evaluation policy, which is reflected in the significant reduction of overall corporate headcount and turnover of several key executive positions in the past four years.
● We first decide on the dollar value of issuance, and then decide on the allocation between RSUs and stock options based on expense, dilution and other circumstances.
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Special Long-Term Incentive Awards (Aspirational PRSUs)
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● Discuss the plan design
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● Over 165 employees participate in the plan
● Extraordinarily difficult performance metrics to achieve any payout
● Performance at minimum payout level would result in substantial shareholder value accretion
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What We Do
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What We Don't Do
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Emphasize incentive-based compensation to align pay with performance
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Permit stock option repricing without stockholder approval
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Place primary emphasis on equity-based compensation to align executive and stockholder interests
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Provide uncapped incentive award opportunities
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Tie performance-based incentives to metrics that drive the leadership team and other employees to accomplish our most important business goals
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Permit stock hedging or stock pledging activities
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Subject executives to significant stock ownership guidelines and holding requirements, which were amended in 2016 to increase the ownership requirement for the CEO and members of the Board of Directors
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Provide for multi-year pay guarantees within employment agreements
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Maintain a Clawback Policy allowing for the recovery of excess compensation resulting from a material financial restatement and fraud, willful misconduct or gross negligence
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●
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Maintain single trigger vesting provisions in the event of a change of control for cash severance or equity award vesting acceleration
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Use tally sheets and other analytical tools to assess executive compensation
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Provide excessive perquisites or benefits to our NEOs
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Engage an independent compensation consultant to advise the Compensation Committee
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Terminate non-performing officers
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(1)
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This grant of PRSUs runs through 2018 with a reduced award opportunity and is tied to an aspirational performance goal of achieving more than $650 million in adjusted EBITDA for 2018, which was not met. Because the performance requirement for vesting was so challenging, at the time of grant these shares were not expected to vest; therefore, no value attributable to these PRSUs is included in the Annualized Target. The Company did not meet the performance target for 2017 or 2018 and accordingly this grant is not included as Realizable Compensation.
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(2)
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For the annualized value, the grant date value is annualized over the 5-year vesting period. For the 2018 total realizable compensation, the value is calculated by multiplying one-fifth of the grant, or 10,274 shares, by $41.40, the closing price of the common stock on December 31, 2018.
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(3)
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For the annualized value, the grant date value is annualized over the 4-year vesting period. For the 2018 total realizable compensation calculation, no value is shown because the exercise price of $69.50 exceeds the closing price of the common stock on December 31, 2018.
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(4)
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Because the performance requirement for vesting is so challenging, at the time of grant these shares were not expected to vest; therefore, no value attributable to these PRSUs is included in Annualized Target or Realizable Compensation.
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(5)
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In January 2018, the Company granted regular annual restricted stock units (
"
RSUs
"
) for 112,090 shares, vesting over 4 years. For the 2018 total realizable compensation, the value is calculated by multiplying the 112,090 shares by $41.40, the closing price of the common stock on December 31, 2018.
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(6)
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In January of 2018, the Company granted regular annual stock options to acquire 125,411 shares, vesting over four years, at an exercise price of $62.45. For the 2018 total realizable compensation calculation, no value is shown because the exercise price of $62.45 exceeds the closing price of the common stock on December 31, 2018.
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•
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during 2018, F.W. Cook provided no services to and received no fees from the Company other than in connection with engagement by the Compensation Committee (the "Engagement");
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the amount of fees paid or payable by the Company to F.W. Cook in respect of the Engagement represented (or are reasonably certain to represent) less than 1% of F.W. Cook's total revenue for the 12 month period ended December 31, 2018;
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•
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F.W. Cook has adopted and put in place adequate policies and procedures designed to prevent conflicts of interest, which policies and procedures were provided to the Company;
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there are no business or personal relationships between F.W. Cook and any member of the Compensation Committee other than in respect of (i) the Engagement, or (ii) work performed by F.W. Cook for any other company, board of directors or compensation committee for whom such Committee member also serves as an independent director;
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•
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F.W. Cook owns no stock of the Company; and
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•
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there are no business or personal relationships between F.W. Cook and any executive officer of the Company other than in respect of the Engagement.
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Brunswick Corporation (BC)
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Herman Miller, Inc. (MLHR)
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Sleep Number Corporation (SNBR)
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Carter's, Inc. (CRI)
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HNI Corporation (HNI)
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Steelcase Inc. (SCS)
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Columbia Sportswear Company (COLM)
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La-Z-Boy Incorporated (LZB)
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Tupperware Brands Corporation (TUP)
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Deckers Outdoor Corporation (DECK)
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Leggett & Platt, Incorporated (LEG)
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Under Armour, Inc. (UA)
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Gildan Activewear Inc. (GIL)
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lululemon athletica inc. (LULU)
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Williams-Sonoma, Inc. (WSM)
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Hanesbrands Inc. (HBI)
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Polaris Industries Inc. (PII)
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Wolverine World Wide, Inc. (WWW)
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Hasbro, Inc. (HAS)
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RH (RH)
|
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Pay Element
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Purpose
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Description
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Link to Performance
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Annual Base Salary
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To attract and retain leadership talent and to provide a competitive base of compensation that recognizes the executive’s skills, experience and responsibilities in the position.
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Fixed, non-variable cash compensation.
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Base salary levels are based on a number of factors including each executive's time and sustained performance in a role, internal equity considerations, and succession planning considerations among other factors.
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Annual Incentive Plan (AIP) Awards
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To provide executives with a clear financial incentive to achieve critical short-term financial and operating targets or strategic initiatives.
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Variable annual cash incentive with payout based on Company performance over the fiscal year.
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Annual incentive opportunity is targeted at a competitive level, generally near the market median for each executive. The actual incentive award payout is based on the achievement of the performance criteria and can range from 0% to 200% of target payout. 100% of the FY 2018 AIP payout opportunity was based on the Company's adjusted EBITDA for 2018. Using a Company-wide performance goal based on adjusted EBITDA promotes collaboration and focuses the entire Company on a goal that strongly correlates with stockholder value creation.
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Annual Long-Term Incentive Awards
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To align a significant portion of executive compensation to the Company's long-term operational performance as well as share price appreciation and total stockholder return. This component serves to motivate and retain executive talent.
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Annual grants of stock options, PRSUs, and/or restricted stock units "RSUs".
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The Company has granted annual Long-Term Incentive Plan ("LTIP") awards in the form of stock options, PRSUs and RSUs. Stock options have value only if and to the extent our share price increases from the date of grant to the time of exercise.
PRSUs are granted to reward participants for the successful achievement of annual or multi-year performance objectives, using a currency (common stock) that is strongly aligned with stockholder interests.
RSUs are granted primarily to enhance retention and reinforce an ownership mentality through enhanced equity stakes.
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Special Long-Term Incentive Awards
|
To provide executives with an above market incentive only if significant shareholder value is created or to motivate executives to make significant personal investments in the Company to further executive alignment with other shareholders.
|
Aspirational performance equity awards and matching awards.
|
Aspirational awards are earned only if there is significant, above-market improvement in performance over a defined period of time.
Matching awards are granted primarily to enhance retention and encourage significant ownership of the Company's common stock by the executive. Since inception of the matching awards, the Company's current executive officers have invested approximately $11.5 million in the Company's common stock.
|
(1)
|
Mr. Rao was promoted to CFO during 2017. Amount shown for 2017 represents his annualized salary at the end of 2017.
|
(2)
|
Mr. Vollet served as Senior Vice President, Global Operations during 2017 prior to being promoted to Executive Vice President, Global Operations in 2018. Amount shown for 2017 represents his salary for his prior role.
|
Named Executive Officer
|
Target Award as a % of
Salary
|
Target Award ($)
|
Maximum Award as a %
of Salary
|
Scott L. Thompson
|
125%
|
$1,375,000
|
250%
|
Bhaskar Rao
|
70%
|
$ 310,100
|
140%
|
Richard W. Anderson
|
70%
|
$ 317,800
|
140%
|
David Montgomery
|
70%
|
£ 215,274
|
140%
|
Scott J. Vollet
|
70%
|
$ 306,600
|
140%
|
Named Executive Officer
|
2018 Target
|
Percentage of Overall Incentive Target
|
2018 Actual Payout
|
Scott L. Thompson
|
$1,375,000
|
—
|
—
|
Bhaskar Rao
|
$ 310,100
|
—
|
—
|
Richard W. Anderson
|
$ 317,800
|
—
|
—
|
David Montgomery
|
£ 215,274
|
—
|
—
|
Scott J. Vollet
|
$ 306,600
|
—
|
—
|
Named Executive Officer
|
2018 LTIP RSUs Grant Date Fair Value ($)
(1)
|
# of RSUs
|
2018 LTIP Options Grant Date Fair Value ($)
(2)
|
# of Options
|
|||
Scott L. Thompson
|
7,000,021
|
|
112,090
|
|
3,000,001
|
|
125,411
|
Bhaskar Rao
|
974,969
|
|
15,612
|
|
450,008
|
|
18,812
|
Richard W. Anderson
|
974,969
|
|
15,612
|
|
450,008
|
|
18,812
|
David Montgomery
|
1,099,994
|
|
17,614
|
|
450,008
|
|
18,812
|
Scott J. Vollet
|
974,969
|
|
15,612
|
|
450,008
|
|
18,812
|
(1)
|
The RSU grant date fair value is based on $62.45, the closing price of the Company's common stock on January 5, 2018, the grant date.
|
(2)
|
The Option grant date fair value is based on the Black Scholes value of the Company's stock as of January 5, 2018, the grant date.
|
|
Submitted by,
|
|
|
|
COMPENSATION COMMITTEE
|
|
Jon L. Luther (Chair)
|
|
Richard W. Neu
|
|
Arik W. Ruchim
|
Name and Principal Position
|
Year
|
Salary ($)
|
Bonus ($)
(1)
|
Stock Awards
($) (2) |
Option Awards ($)
(2)
|
Non-Equity
Incentive Plan Compensation ($) (3) |
Change in
Pension Value and Non- Qualified Deferred Compensation Earnings ($) |
All Other
Compensation ($) (4) |
Total ($)
|
||||||||
Scott L. Thompson
Chairman, President and Chief Executive Officer |
2018
|
1,100,000
|
|
—
|
|
7,000,021
|
|
3,000,001
|
|
—
|
|
—
|
|
196,326
|
|
11,296,348
|
|
|
2017
|
1,100,000
|
|
—
|
|
7,000,000
|
|
8,423,616
|
|
1,375,000
|
|
—
|
|
122,780
|
|
18,021,396
|
|
|
2016
|
1,100,000
|
|
—
|
|
3,181,573
|
|
—
|
|
1,934,625
|
|
—
|
|
20,976
|
|
6,237,174
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Bhaskar Rao
EVP and Chief Financial Officer |
2018
|
443,000
|
|
—
|
|
974,969
|
|
450,008
|
|
—
|
|
—
|
|
29,373
|
|
1,897,350
|
|
|
2017
|
430,000
|
|
—
|
|
975,000
|
|
601,680
|
|
192,281
|
|
—
|
|
23,735
|
|
2,222,696
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Richard W. Anderson
EVP and President, North America |
2018
|
454,000
|
|
—
|
|
974,969
|
|
450,008
|
|
—
|
|
—
|
|
31,406
|
|
1,910,383
|
|
|
2017
|
441,000
|
|
—
|
|
975,000
|
|
1,173,285
|
|
308,700
|
|
—
|
|
20,504
|
|
2,918,489
|
|
|
2016
|
441,000
|
|
500,000
|
|
2,076,402
|
|
—
|
|
434,341
|
|
—
|
|
23,960
|
|
3,475,703
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
David Montgomery
(5)
EVP, Global Business Strategy and Development |
2018
|
392,014
|
|
—
|
|
1,099,994
|
|
450,008
|
|
—
|
|
—
|
|
87,701
|
|
2,029,717
|
|
|
2017
|
367,248
|
|
—
|
|
1,100,000
|
|
1,323,705
|
|
257,074
|
|
—
|
|
76,705
|
|
3,124,732
|
|
|
2016
|
365,756
|
|
500,000
|
|
1,100,000
|
|
—
|
|
360,233
|
|
—
|
|
76,705
|
|
2,402,694
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Scott J. Vollet
EVP, Global Operations |
2018
|
438,000
|
|
—
|
|
974,969
|
|
450,008
|
|
—
|
|
—
|
|
23,985
|
|
1,886,962
|
|
|
2017
|
324,500
|
|
—
|
|
500,000
|
|
601,680
|
|
162,225
|
|
—
|
|
19,598
|
|
1,608,003
|
|
(1)
|
In 2016, the Company paid retention bonuses in connection with the termination of our previous CEO and the commencement of the search for a new CEO. The retention bonuses were approved by the Board of Directors in May 2015 for NEOs and other senior executives, and the retention bonuses were contingent upon certain performance criteria, which were met.
|
(2)
|
No option awards were granted in 2016. For stock awards, the value set forth is the grant date fair value, in accordance with FASB ASC 718. See Note 12 "Stock-based Compensation" to the Company's Consolidated Financial Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for a complete description of the valuation. Stock awards include RSU and matching PRSU grants, both of which are described in the Compensation Discussion and Analysis section and in the Grants of Plan-Based Awards table elsewhere in this Proxy Statement. The grant date fair values of these grants represent the value at the grant date based upon the probable outcome of the performance conditions set forth in the awards. With respect to the RSUs granted on January 5, 2017 and February 11, 2016, with performance periods that ended December 31, 2017 and December 31, 2016, respectively, the maximum potential value of the awards is 100% of target, based on achievement of a target based on positive profit as defined in the respective award agreements, and these performance tests were met. RSUs granted on January 5, 2018 did not have performance conditions. With respect to the matching PRSUs granted in 2016 with a performance period that ended December 31, 2016, the maximum potential value of the matching PRSU is 100% of target, based on achievement of a target based on positive profit as defined in the applicable award agreements, and this performance test was met.
|
Named Executive Officer
|
Number of Shares at Target
|
If Earned, Value based on Closing Price of Stock at Grant Date ($)
|
Scott L. Thompson
|
620,000
|
36,927,200
|
Bhaskar Rao
|
100,000
|
6,215,500
|
Richard W. Anderson
|
135,000
|
8,040,600
|
David Montgomery
|
135,000
|
8,040,600
|
Scott J. Vollet
|
100,000
|
5,720,500
|
(3)
|
Non-Equity Incentive Plan Compensation payouts are reported in the year they are earned although paid in the following year.
|
(4)
|
Represents amounts paid in
2018
on behalf of each of our NEOs for the following:
|
Named Executive Officer
|
|
Life and Disabilities
Insurance Premiums ($)
|
|
Contributions to
Qualified Defined Contribution Plans ($)
|
|
Car Allowance($)
|
|
Tax Preparation, Legal and Financial Planning Fees($)
|
|
Relocation($)
|
|
Severance Payments($)
|
|
Use of Corporate Aircraft
($)
(a)
|
|
Income Tax Gross-Up ($)
(b)
|
Scott L. Thompson
|
|
2,985
|
|
11,000
|
|
—
|
|
10,000
|
|
—
|
|
—
|
|
165,289
|
|
7,052
|
Bhaskar Rao
|
|
2,985
|
|
11,000
|
|
—
|
|
10,000
|
|
—
|
|
—
|
|
5,388
|
|
—
|
Richard W. Anderson
|
|
2,985
|
|
11,000
|
|
—
|
|
10,000
|
|
—
|
|
—
|
|
7,421
|
|
—
|
David Montgomery
|
|
20,741
|
|
47,839
|
|
19,121
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Scott J. Vollet
|
|
2,985
|
|
11,000
|
|
—
|
|
10,000
|
|
—
|
|
—
|
|
—
|
|
—
|
(a)
|
Corporate aircraft use is governed by a Corporate Aircraft Policy adopted by the Compensation Committee in connection with the Company's decision to allow members of the Board and executive team to use company-owned, chartered or leased aircraft. Pursuant to SEC rules, certain uses of corporate aircraft, including commuting from an executive's personal residence to its headquarters in a different city, is considered "personal" and thus must be disclosed as a perquisite. For 2018, $122,960 of Mr. Thompson's use of Company aircraft was comprised of commuting flights.
|
(b)
|
The Company does not provide for United States Federal, State or local income tax gross-ups relating to imputed income to employees except in limited circumstances. The Company does provide for such gross-ups in certain circumstances under its Corporate Aircraft Policy. The total amount of such gross-ups during 2018 was $7,052.
|
(5)
|
Mr. Montgomery's salary and Non-Equity Incentive Plan Compensation are paid in British Pounds (£) and are converted to United States Dollars ($) using the spot rate on the last business day of each year. The variation in Mr. Montgomery's salary year-to-year is due to variation in the conversion rate.
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(2)
|
All Other Stock Awards:
Number of Shares of Stock or Units (#) |
All Other Stock Awards: Number of Shares of Stock of Units (#)
|
All Other Option Awards:
Number of Securities Underlying Options (#) |
Exercise or
Base Price of Option Awards ($/Sh) |
Grant Date
Fair Value of Stock and Option Awards ($) (3) |
|||||||||||
Name/Type of Award
|
Grant Date
|
Threshold ($)
|
Target ($)
|
Maximum ($)
|
|
Threshold (#)
|
Target (#)
|
Maximum (#)
|
||||||||||||
Scott L. Thompson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Annual Incentive Bonus
|
|
—
|
$
|
1,375,000
|
|
$
|
2,750,000
|
|
|
|
|
|
|
|
|
|
|
|||
Stock Award (RSU)
(4)
|
1/5/2018
|
|
|
|
|
—
|
112,090
|
|
112,090
|
|
|
|
|
|
7,000,021
|
|
||||
Stock Award (Stock Option)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
125,411
|
|
125,411
|
|
|
|
|
|
3,000,001
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Bhaskar Rao
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Annual Incentive Bonus
|
|
—
|
310,100
|
|
620,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (RSU)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
15,612
|
|
15,612
|
|
|
|
|
|
974,969
|
|
||
Stock Award (Stock Option)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
18,812
|
|
18,812
|
|
|
|
|
|
450,008
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Richard W. Anderson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Annual Incentive Bonus
|
|
—
|
317,800
|
|
635,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (RSU)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
15,612
|
|
15,612
|
|
|
|
|
|
974,969
|
|
||
Stock Award (Stock Option)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
18,812
|
|
18,812
|
|
|
|
|
|
450,008
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
David Montgomery
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Annual Incentive Bonus
|
|
—
|
274,410
|
|
548,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (RSU)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
17,614
|
|
17,614
|
|
|
|
|
|
1,099,994
|
|
||
Stock Award (Stock Option)
(4)
|
1/5/2018
|
|
|
|
|
—
|
18,812
|
|
18,812
|
|
|
|
|
|
450,008
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Scott J. Vollet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Annual Incentive Bonus
|
|
—
|
306,600
|
|
613,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Stock Award (RSU)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
15,612
|
|
15,612
|
|
|
|
|
|
974,969
|
|
||
Stock Award (Stock Option)
(4)
|
1/5/2018
|
|
|
|
|
|
|
—
|
18,812
|
|
18,812
|
|
|
|
|
|
450,008
|
|
(1)
|
These columns show the 2018 annual award opportunities under the Company's annual incentive bonus program for 2018. They reflect the estimated amounts paid out under the program, based on a Threshold, Target and Maximum attainment and are discussed in the Compensation Discussion and Analysis section under "2018 Compensation Actions - 2018 Annual Incentive Program." The 2018 Company-wide Adjusted EBITDA results were under minimum attainment and therefore no payouts were made under 2018 AIP.
|
(2)
|
These columns show the 2018 equity incentive awards, which include awards of RSUs and Non-Qualified Stock Options. The terms of these awards are described more fully in Note (4), below.
|
(3)
|
This column shows the grant date fair value of RSUs and the Black Scholes value of the Non-Qualified Stock Options, computed in accordance with FASB ASC 718. See Note 12 "Stock-based Compensation" to the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for a complete description of the valuations. For the RSUs, the grant date fair value displayed represents the value of the shares based on the closing price of the Company's common stock, par value $0.01 per share (the “Stock”) on the NYSE on the grant date. The award amounts do not reflect the risk that the awards may be forfeited in certain circumstances, or in the case of the RSU award, that there is no payout if the required performance measures are not met.
|
(4)
|
On January 5, 2018, the Board approved the grant of RSUs that will vest over the first four anniversaries of the grant dates. On January 5, 2018, the Board also approved the grant of Non-Qualified Stock Options to purchase from the Company all or any part of the total option shares (the "Option Award") of the Stock, at a price of $62.45 per share (the "Exercise Price"). The Option is not treated as an "incentive stock option" within the meaning of Section 422 of the Code.
|
(5)
|
Mr. Montgomery's salary is paid in British Pounds (£). The Annual Incentive Bonus threshold, target and maximum opportunities were converted into United States Dollars($) based on the December 31, 2018 exchange spot rate of 1.2747.
|
|
Option Awards
|
|
Stock Awards
(1)
|
||||||||||||||||
Name
|
Number of Securities Underlying Options
|
|
Option Exercise Price
|
Option
Expiration Date |
|
Number of Shares or Units of Stock that Have Not Yet Vested
|
|
Market Value of Shares or Units of Stock that Have Not Yet Vested
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
||||||||
|
(#) Exercisable
|
(#) Unexercisable
|
|
($)
|
|
|
(#)
|
|
($)
|
(#)
|
|
($)
|
|||||||
Scott L. Thompson
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
310,000
|
|
—
|
|
(2)
|
71.75
|
|
9/3/2025
|
|
|
|
|
|
|
|
|
|||
|
84,869
|
|
254,607
|
|
(3)
|
69.50
|
|
1/4/2027
|
|
|
|
|
|
|
|
||||
|
—
|
|
125,411
|
|
(4)
|
62.45
|
|
1/4/2028
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
112,090
|
|
(5)
|
4,640,526
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
21,000
|
|
(6)
|
869,400
|
|
|||||
|
|
|
|
|
|
|
|
|
|
9,822
|
|
(6)
|
406,631
|
|
|||||
|
|
|
|
|
|
|
|
|
|
75,539
|
|
(7)
|
3,127,315
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Bhaskar Rao
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
1,456
|
|
—
|
|
(8)
|
28.39
|
|
2/22/2020
|
|
|
|
|
|
|
|
||||
|
1,865
|
|
—
|
|
(9)
|
46.68
|
|
2/21/2021
|
|
|
|
|
|
|
|
||||
|
1,089
|
|
—
|
|
(10)
|
71.50
|
|
2/8/2022
|
|
|
|
|
|
|
|
||||
|
5,142
|
|
—
|
|
(11)
|
37.05
|
|
2/21/2023
|
|
|
|
|
|
|
|
||||
|
1,766
|
|
—
|
|
(12)
|
51.87
|
|
2/27/2024
|
|
|
|
|
|
|
|
||||
|
2,886
|
|
—
|
|
(13)
|
57.51
|
|
2/26/2025
|
|
|
|
|
|
|
|
||||
|
6,062
|
|
18,186
|
|
(3)
|
69.50
|
|
1/4/2027
|
|
|
|
|
|
|
|
||||
|
—
|
|
18,812
|
|
(4)
|
62.45
|
|
1/4/2028
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
1,770
|
|
(14)
|
73,278
|
|
|
|
|
|||||
|
|
|
|
|
|
|
15,612
|
|
(5)
|
646,337
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
5,070
|
|
(6)
|
209,898
|
|
|||||
|
|
|
|
|
|
|
|
|
|
2,158
|
|
(7)
|
89,341
|
|
|||||
|
|
|
|
|
|
|
|
|
|
11,969
|
|
(15)
|
495,517
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Richard W. Anderson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
6,082
|
|
—
|
|
(9)
|
46.68
|
|
2/21/2021
|
|
|
|
|
|
|
|
|
|
||
|
4,838
|
|
—
|
|
(10)
|
71.50
|
|
2/8/2022
|
|
|
|
|
|
|
|
|
|
||
|
8,777
|
|
—
|
|
(12)
|
51.87
|
|
2/27/2024
|
|
|
|
|
|
|
|
|
|
||
|
16,458
|
|
—
|
|
(13)
|
57.51
|
|
2/26/2025
|
|
|
|
|
|
|
|
||||
|
11,821
|
|
35,463
|
|
(3)
|
69.50
|
|
1/4/2027
|
|
|
|
|
|
|
|
||||
|
—
|
|
18,812
|
|
(4)
|
62.45
|
|
1/4/2028
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
15,612
|
|
(5)
|
646,337
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
9,130
|
|
(14)
|
377,982
|
|
|||||
|
|
|
|
|
|
|
|
|
|
10,458
|
|
(6)
|
432,961
|
|
|||||
|
|
|
|
|
|
|
|
|
|
10,521
|
|
(7)
|
435,569
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
(1)
|
||||||||||||||||
Name
|
Number of Securities Underlying Options
|
|
Option Exercise Price
|
Option
Expiration Date |
|
Number of Shares or Units of Stock that Have Not Yet Vested
|
|
Market Value of Shares or Units of Stock that Have Not Yet Vested
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Rights That Have Not Vested
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
||||||||
|
(#) Exercisable
|
(#) Unexercisable
|
|
($)
|
|
|
(#)
|
|
($)
|
(#)
|
|
($)
|
|||||||
David Montgomery
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
6,082
|
|
—
|
|
(9)
|
46.68
|
|
2/21/2021
|
|
|
|
|
|
|
|
|
|
||
|
4,838
|
|
—
|
|
(10)
|
71.50
|
|
2/8/2022
|
|
|
|
|
|
|
|
|
|
||
|
26,864
|
|
—
|
|
(11)
|
37.05
|
|
2/21/2023
|
|
|
|
|
|
|
|
|
|
||
|
9,552
|
|
—
|
|
(12)
|
51.87
|
|
2/27/2024
|
|
|
|
|
|
|
|
|
|
||
|
18,568
|
|
—
|
|
(13)
|
57.51
|
|
2/26/2025
|
|
|
|
|
|
|
|
||||
|
13,337
|
|
40,009
|
|
(3)
|
69.50
|
|
1/4/2027
|
|
|
|
|
|
|
|
||||
|
—
|
|
18,812
|
|
(4)
|
62.45
|
|
1/4/2028
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
17,614
|
|
(5)
|
729,220
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
10,301
|
|
(14)
|
426,461
|
|
|||||
|
|
|
|
|
|
|
|
|
|
11,870
|
|
(7)
|
491,418
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Scott J. Vollet
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
1,153
|
|
—
|
|
(8)
|
28.39
|
|
2/22/2020
|
|
|
|
|
|
|
|
||||
|
1,109
|
|
—
|
|
(9)
|
46.68
|
|
2/21/2021
|
|
|
|
|
|
|
|
||||
|
899
|
|
—
|
|
(10)
|
71.50
|
|
2/8/2022
|
|
|
|
|
|
|
|
||||
|
3,647
|
|
—
|
|
(11)
|
37.05
|
|
2/22/2023
|
|
|
|
|
|
|
|
||||
|
1,611
|
|
—
|
|
(12)
|
51.87
|
|
2/28/2024
|
|
|
|
|
|
|
|
||||
|
3,573
|
|
—
|
|
(13)
|
57.51
|
|
2/26/2025
|
|
|
|
|
|
|
|
||||
|
6,062
|
|
18,186
|
|
(3)
|
69.50
|
|
1/4/2027
|
|
|
|
|
|
|
|
||||
|
—
|
|
18,812
|
|
(4)
|
62.45
|
|
1/4/2028
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
1,576
|
|
(14)
|
65,246
|
|
|
|
|
|||||
|
|
|
|
|
|
|
15,612
|
|
(5)
|
646,337
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
1,628
|
|
(6)
|
67,399
|
|
|||||
|
|
|
|
|
|
|
|
|
|
3,361
|
|
(6)
|
139,145
|
|
|||||
|
|
|
|
|
|
|
|
|
|
5,395
|
|
(7)
|
223,353
|
|
(1
|
)
|
During 2015, the Company granted 2015 Aspirational PRSUs that would vest at target if the Company achieved an Adjusted EBITDA performance metric for 2017 or 2018. For a discussion of the terms relating to the 2015 Aspirational PRSUs please refer to "Compensation Discussion and Analysis - 2018 Compensation Actions - 2015 Aspirational Grants."
The performance metric was not met in 2017 nor in 2018 and accordingly two-thirds of these 2015 Aspirational PRSUs were forfeited in 2017 and one-third were forfeited in 2018.
In addition, during 2017, the Company granted 2017 Aspirational PRSUs that will vest in accordance with a formula related to the Company's Adjusted EBITDA (as defined in the award agreements) as measured over any four fiscal quarters during two separate measurement periods. The first measurement period consists of the fiscal quarters ending March 31, 2018 through December 31, 2019. The second measurement period consists of the fiscal quarters ending March 31, 2020 through December 31, 2020.
If the performance metric is met during the first measurement period, then the awards will vest at a percentage between 66% to 100% based upon Adjusted EBITDA of $600 million to $650 million or more. If the performance metric is not met during the first measurement period, then the award may vest during the second measurement period at a percentage between 33% to 50% based upon Adjusted EBITDA of $600 million to $650 million or more. The Company has excluded these awards from this table because at the time of grant these 2017 Aspirational PRSUs were not expected to vest. For a discussion of the terms of the 2017 Aspirational PRSUs, please refer to "Compensation Discussion and Analysis - 2018 Compensation Actions - 2017 Aspirational PRSUs."
|
|||||||||||
(2
|
)
|
These options, granted on September 4, 2015, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary date of the grant.
|
(3
|
)
|
These options, granted on January 5, 2017, have a 10-year life and become exercisable in equal installments over four years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(4
|
)
|
These options, granted on January 5, 2018, have a 10-year life and become exercisable in equal installments over four years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(5
|
)
|
These RSUs, granted on January 5, 2018, will vest over four years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(6
|
)
|
On February 25, 2016, the Board approved a Matching PRSU Program, pursuant to which the Company would grant "matching PRSUs" to an eligible executive, including the NEOs, covering the number of shares of Common Stock purchased by the executive in open market purchases between February 25, 2016 and September 15, 2016 (the "Purchased Shares"). The matching PRSUs are subject to a performance requirement that the Company have "positive Profits" for calendar year 2016, as defined in the applicable award agreements. If the performance threshold is achieved, which it was, the matching PRSUs will vest over the first five anniversaries of the grant dates. Under the terms of the applicable award agreements, in the event a participating executive sells any of the Purchased Shares at any time prior to the fifth anniversary of the grant date all remaining unvested matching PRSUs are forfeited.
|
|||||||||||
(7
|
)
|
On January 5, 2017, the Board approved the grant of RSUs, subject to a performance threshold that the Company have "positive profits" for calendar year 2017, as defined in the applicable award agreements. If the performance threshold is achieved, which it was, the RSUs will vest over the first four anniversaries of the grant dates.
|
|||||||||||
(8
|
)
|
These options, granted on February 22, 2010, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(9
|
)
|
These options, granted on February 22, 2011, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(10
|
)
|
These options, granted on February 9, 2012, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(11
|
)
|
These options, granted on February 22, 2013, have a 10-year life and became exercisable in equal installments over two years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(12
|
)
|
These options, granted on February 28, 2014, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(13
|
)
|
These options, granted on February 27, 2015, have a 10-year life and become exercisable in equal installments over three years, beginning with the one-year anniversary date of the grant.
|
|||||||||||
(14
|
)
|
On February 11, 2016, the Board approved the grant of RSUs, subject to a performance threshold that the Company have "positive profits" for calendar year 2016, as defined in the applicable award agreements. If the performance threshold is achieved, which it was, the RSUs will vest over the first four anniversaries of the grant dates. Mr. Rao and Mr. Vollet's RSU awards do not have the "positive profits" performance metric as they were not Executives at the time of grant.
|
|||||||||||
(15
|
)
|
On October 13, 2017, the Board approved the grant of RSUs, subject to a performance threshold that the Company have "positive profits" for calendar year 2018, as defined in the applicable award agreement. If the performance threshold is achieved, the RSUs will vest over the first four anniversaries of the grant dates.
|
|
Option Awards
|
|
Stock Awards
|
||||||
Name
|
Number of Shares
Acquired on Exercise (#) |
Value Realized on
Exercise ($) |
|
Number of Shares
Acquired on Vesting (#) |
Value Realized on
Vesting ($) |
||||
Scott L. Thompson
|
—
|
|
—
|
|
|
60,145
|
|
3,101,271
|
|
Bhaskar Rao
|
—
|
|
—
|
|
|
3,295
|
|
163,080
|
|
Richard W. Anderson
|
—
|
|
—
|
|
|
11,560
|
|
594,831
|
|
David Montgomery
|
19,915
|
|
2,129,400
|
|
|
9,108
|
|
484,927
|
|
Scott J. Vollet
|
—
|
|
—
|
|
|
4,252
|
|
208,705
|
|
|
|
Termination
By Company
Without Cause
|
Employee
Resignation
For Good Reason
|
Termination
By Company
For Cause
|
Termination
Due to
Disability
|
Death
|
Change of
Control
|
Change of
Control and
Termination
|
||||||||||||||
Name
|
Benefits and Payments
|
($)
(1)
|
($)
(1)
|
($)
|
($)
(1)
|
($)
(1)
|
($)
(2)
|
($)
(2)
|
||||||||||||||
Scott L. Thompson
|
Cash Severance
(3)
|
$
|
2,227,200
|
|
$
|
2,227,200
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
Annual Incentive Payment
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Acceleration of equity awards
(5)
|
12,083,798
|
|
12,083,798
|
|
—
|
|
13,746,539
|
|
13,746,539
|
|
—
|
|
39,414,539
|
|
|||||||
|
Health and Welfare Continuation
(6)
|
26,889
|
|
26,889
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Bhaskar Rao
|
Cash Severance
(7)
|
443,000
|
|
443,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Annual Incentive Payment
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Acceleration of equity awards
(8)
|
1,126,701
|
|
1,126,701
|
|
—
|
|
1,390,460
|
|
1,390,460
|
|
—
|
|
5,530,460
|
|
|||||||
|
Health and Welfare Continuation
(6)
|
18,922
|
|
18,922
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Richard W. Anderson
|
Cash Severance
(7)
|
454,000
|
|
454,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Annual Incentive Payment
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Acceleration of Equity Awards
(9)
|
1,406,027
|
|
1,406,027
|
|
—
|
|
1,892,849
|
|
1,892,849
|
|
—
|
|
7,481,849
|
|
|||||||
|
Health and Welfare Continuation
(6)
|
18,922
|
|
18,922
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
David Montgomery
|
Cash Severance
(10)
|
392,014
|
|
392,014
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Annual Incentive Payment
|
—
|
|
—
|
|
—
|
|
(11
|
)
|
(11
|
)
|
—
|
|
—
|
|
|||||||
|
Acceleration of Equity Awards
(12)
|
1,586,331
|
|
1,586,331
|
|
—
|
|
1,647,099
|
|
1,647,099
|
|
—
|
|
7,236,099
|
|
|||||||
|
Health and Welfare Continuation
(11)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Pension
Benefits
(13)
|
47,839
|
|
47,839
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Car Allowance
(14)
|
19,121
|
|
19,121
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Scott J. Vollet
|
Cash Severance
(7)
|
438,000
|
|
438,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Annual Incentive Payment
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
|
Acceleration of Equity Awards
(15)
|
881,075
|
|
881,075
|
|
—
|
|
1,141,481
|
|
1,141,481
|
|
—
|
|
5,281,481
|
|
|||||||
|
Health and Welfare Continuation
(6)
|
18,220
|
|
18,220
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
Excludes amounts for earned but unpaid salary and accrued, unused vacation, if applicable.
|
(2
|
)
|
The NEOs' employment agreements do not provide for any payments solely due to a change in control of Tempur Sealy International or Tempur Sealy International Limited, as applicable. To the extent equity award agreements trigger acceleration of vesting of awards, such accelerations are noted in the appropriate column and the specific details are described in separate footnotes. To the extent a termination of employment occurs in connection with a change in control, any severance or bonus payments would only be made to the extent the termination qualified as a termination by the Company without cause or as a resignation by the employee for good reason, and such payments are described in the appropriate column in the table.
|
(3
|
)
|
For Mr. Thompson, the amount presented under Cash Severance for Termination by Company without Cause and for Employee Resignation for Good Reason includes two years of base salary (reduced by any salary continuation benefit paid for under any plan maintained by the Company) and cash payments for certain benefits that may not be continued after termination of employment due to the provisions of the applicable plans.
|
(4
|
)
|
With respect to the currently employed NEOs, because the termination event is deemed to have occurred on December 31, 2018, any incentive compensation is payable as earned under the terms of the annual incentive program, so no additional amounts would be payable as a result of the deemed termination.
|
(5
|
)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Thompson's stock option agreement dated January 5, 2018 provides that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or he resigns for good reason (as defined in the grant agreement and the employment agreement, as applicable) within twelve months of the change of control, his remaining unvested options immediately vest. The January 5, 2018 stock option agreement also provides that if Mr. Thompson is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the options on the remaining vesting dates and the full amount of the options if the termination occurs after twelve months of such grant.
Mr. Thompson's stock option agreement dated January 5, 2017 provides that in the event of a change of control, if Mr. Thompson is terminated without cause or resigns for good reason (as defined in the grant agreement) within twelve months of the change of control, his remaining unvested options immediately vest.
Mr. Thompson was awarded 118,000 RSUs under his RSU agreement dated September 4, 2015. These RSUs vested over three years and are now fully vested. Except for RSUs distributed as stock and sold to pay for taxes, these RSUs have not been paid as stock to Mr. Thompson and he is entitled to receive the remaining 113,591 RSUs as shares of common stock within thirty days of his termination for any reason.
Mr. Thompson's RSU agreements dated January 5, 2017 and January 5, 2018 provide that if he is terminated due to disability, death or, in the event of a change of control, he is terminated or he resigns for good reason (as defined in his employment agreement) within twelve months of such change of control, then his remaining unvested RSUs immediately vest. These agreements also provide that if Mr. Thompson is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the RSUs on the remaining vesting dates and the full amount of the RSUs if the termination occurs after twelve months of such grant.
|
|
Mr. Thompson's Matching PRSU agreements dated March 18, 2016 and May 6, 2016 provide that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of such change of control, then his target PRSU awards immediately vest. Mr. Thompson's Aspirational PRSU award agreement dated August 7, 2017 provides that if a change of control occurs on or after December 31, 2018 he will receive time-based vesting RSUs in an amount equal to the number of outstanding unvested PRSUs granted thereunder that have not previously been vested and paid or are not then vested and payable, including any PRSUs available to be earned during prior performance periods that were not earned.
|
|
(6
|
)
|
Mr. Thompson would be eligible to continue to participate in welfare benefit plans offered by the Company for a period of two years and Messrs. Rao, Anderson and Vollet for one year, following termination without Cause or resignation for Good Reason.
|
(7
|
)
|
For Messrs. Rao, Anderson and Vollet, the amount presented under Cash Severance for Termination by Company without Cause and for Employee Resignation for Good Reason represents twelve months of base salary.
|
(8
|
)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Rao's stock option agreement dated January 5, 2018 provides that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of the change of control, his remaining unvested options immediately vest. The January 5, 2018 stock option agreement also provides that if Mr. Rao is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the options on the remaining vesting dates and the full amount of the options if the termination occurs after twelve months of such grant.
Mr. Rao's stock option agreement dated January 5, 2017 provides that in the event of a change of control, if Mr. Rao is terminated without cause or resigns for good reason (as defined in the grant agreement) within twelve months of the change of control, his remaining unvested options immediately vest.
Mr. Rao's RSU agreements dated February 11, 2016, January 5, 2017, October 13, 2017 and January 5, 2018 provide that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or he resigns for good reason (as defined in the grant agreement or his employment agreement, as applicable) within twelve months of such change of control, then his remaining unvested RSUs immediately vest. These agreements also provide that if Mr. Rao is terminated without cause or he resigns for good reason (as defined in the grant agreement or his employment agreement, as applicable) within twelve months of such grant, then he is entitled to receive a pro rata portion of the RSUs on the remaining vesting dates and the full amount of the RSUs if the termination occurs after twelve months of such grant.
Mr. Rao's Matching PRSU agreement dated June 3, 2016 provides that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or resigns for good reason (as defined in the grant agreement) within twelve months of such change of control, then his target PRSU awards immediately vest. Mr. Rao's Aspirational PRSU award agreements dated August 7, 2017 and October 13, 2017 provide that if a change of control occurs on or after December 31, 2018 he will receive time-based vesting RSUs in an amount equal to the number of outstanding unvested PRSUs granted thereunder that have not previously been vested and paid or are not then vested and payable, including any PRSUs available to be earned during prior performance periods that were not earned.
|
(9
|
)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Anderson's stock option agreement January 5, 2018 provides that if he is terminated due to disability, death or, in the event of a change of control, if Mr. Anderson is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change of control, his remaining unvested options immediately vest. The January 5, 2018 stock option agreement also provides that if Mr. Anderson is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the options on the remaining vesting dates and the full amount of the options if the termination occurs after twelve months of such grant.
Mr. Anderson's stock option agreement dated January 5, 2017 provides that in the event of a change of control, if Mr. Anderson is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change of control, his remaining unvested options immediately vest.
Mr. Anderson's RSU agreements dated February 11, 2016, January 5, 2017 and January 5, 2018 provide that if he is terminated due to disability, death or, in the event of a change of control, he is terminated or he resigns for good reason (as defined in his employment agreement) within twelve months of such change of control, then his remaining unvested RSUs immediately vest. These agreements also provide that if Mr. Anderson is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the RSUs on the remaining vesting dates and the full amount of the RSUs if the termination occurs after twelve months of such grant.
Mr. Anderson's Matching PRSU agreement dated March 18, 2016 provides that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of such change of control, then his target PRSU awards immediately vest. Mr. Anderson's Aspirational PRSU award agreement dated August 7, 2017 provides that if a change of control occurs on or after December 31, 2018 he will receive time-based vesting RSUs in an amount equal to the number of outstanding unvested PRSUs granted thereunder that have not previously been vested and paid or are not then vested and payable, including any PRSUs available to be earned during prior performance periods that were not earned.
|
(10
|
)
|
For Mr. Montgomery, the amount presented under Cash Severance for Termination by Company without Cause and for Employee Resignation for Good Reason includes a lump sum payment equal to one year of base salary. Mr. Montgomery's cash severance amounts are denominated in British Pounds and have been converted to United States Dollars using the spot conversion rate as of December 31, 2018.
|
(11
|
)
|
For death while in service to the Company, insurance coverage exists which will provide for four times base salary paid in a lump sum, of which the payout as of December 31, 2017 would have been $1,579,412. This benefit is available to all other employees who work in the United Kingdom (UK) at three times base salary. In addition, a widow’s benefit insurance contract exists that pays an amount of up to 25% of base salary until normal retirement age of 65. The payout for this component would have been approximately $789,706 as of December 31, 2017. The widow’s benefit is only available to Mr. Montgomery. Mr. Montgomery also has Company-provided insurance coverage providing a lump sum payment of four times base salary at the time he experiences an illness or injury preventing him from future service. The payout as of December 31, 2017, would have been $1,579,412. This benefit is available to all other members of the management team in the UK at three times base salary. In the case of a critical illness, Mr. Montgomery's policy would provide for three times base salary, but that amount is capped at £500,000 ($676,122.50). In the case of long term disability, permanent health insurance coverage will be provided in an amount of $202,511 per year until normal retirement age. The permanent health insurance coverage benefit is only available to Mr. Montgomery. Each of these amounts is based on Mr. Montgomery’s base salary, which is denominated in British Pounds, and has been converted to United States Dollars using the spot conversion rate as of December 31, 2017.
|
(12
|
)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Montgomery's stock option agreement dated January 5, 2018 provides that if he is terminated due to disability, death or, in the event of a change of control, if Mr. Montgomery is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change of control, his remaining unvested options immediately vest. The January 5, 2018 stock option agreement also provides that if Mr. Montgomery is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the options on the remaining vesting dates and the full amount of the options if the termination occurs after twelve months of such grant
Mr. Montgomery's stock option agreement dated January 5, 2017 provides that in the event of a change of control, if Mr. Montgomery is terminated without cause or resigns for good reason (as defined in his employment agreement) within twelve months of the change of control, his remaining unvested options immediately vest.
Mr. Montgomery's RSU agreements dated February 11, 2016, January 5, 2017 and January 5, 2018 provide that if he is terminated due to disability, death or, in the event of a change of control, he is terminated or he resigns for good reason (as defined in his employment agreement) within twelve months of such change of control, then his remaining unvested RSUs immediately vest. These agreements also provide that if Mr. Montgomery is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the RSUs on the remaining vesting dates and the full amount of the RSUs if the termination occurs after twelve months of such grant.
Mr. Montgomery's Aspirational PRSU award agreement dated August 7, 2017 provides that if a change of control occurs on or after December 31, 2018 he will receive time-based vesting RSUs in an amount equal to the number of outstanding unvested PRSUs granted thereunder that have not previously been vested and paid or are not then vested and payable, including any PRSUs available to be earned during prior performance periods that were not earned.
|
(13
|
)
|
For Mr. Montgomery, the amount presented under Pension benefits for Termination by Company without Cause and for Employee Resignation for Good Reason includes continuation of pension benefits for a period of twelve months.
|
(14
|
)
|
For Mr. Montgomery, the amount presented under Car Allowance benefits for Termination by Company without Cause and for Employee Termination for Good Reason includes continuation of car allowance benefits for a period of twelve months.
|
(15
|
)
|
The acceleration of equity awards represents the fair value of awards that would accelerate upon vesting as of the event date. Mr. Vollet's stock option agreement dated January 5, 2018 provides that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of the change of control, his remaining unvested options immediately vest. The January 5, 2018 stock option agreement also provides that if Mr. Vollet is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the options on the remaining vesting dates and the full amount of the options if the termination occurs after twelve months of such grant.
Mr. Vollet's stock option agreement dated January 5, 2017 provides that in the event of a change of control, if Mr. Vollet is terminated without cause or resigns for good reason (as defined in the grant agreement) within twelve months of the change of control, his remaining unvested options immediately vest.
Mr. Vollet's RSU agreements dated February 11, 2016, January 5, 2017 and January 5, 2018 provide that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or he resigns for good reason (as defined in the grant agreement or his employment agreement, as applicable) within twelve months of such change of control, then his remaining unvested RSUs immediately vest. These agreements also provide that if Mr. Vollet is terminated without cause or he resigns for good reason (as defined in his employment agreement) within twelve months of such grant, then he is entitled to receive a pro rata portion of the RSUs on the remaining vesting dates and the full amount of the RSUs if the termination occurs after twelve months of such grant.
Mr. Vollet's Matching PRSU agreements dated March 18, 2016 and May 6, 2016, respectively, provide that if he is terminated due to disability, death or, in the event of a change of control, he is terminated without cause or resigns for good reason (as defined in the grant agreements) within twelve months of such change of control, then his target PRSU awards immediately vest. Mr. Vollet's Aspirational PRSU award agreements dated August 7, 2017 and February 8, 2018 provide that if a change of control occurs on or after December 31, 2018 he will receive time-based vesting RSUs in an amount equal to the number of outstanding unvested PRSUs granted thereunder that have not previously been vested and paid or are not then vested and payable, including any PRSUs available to be earned during prior performance periods that were not earned.
|
Plan category
|
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
|
||||
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
|
||||
Amended and Restated 2003 Equity Incentive Plan
(1)
|
|
201,334
|
|
|
$
|
41.59
|
|
|
—
|
|
Amended and Restated 2013 Equity Incentive Plan
(2)
|
|
4,263,926
|
|
|
65.45
|
|
|
3,752,785
|
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
4,465,260
|
|
|
$
|
62.51
|
|
|
3,752,785
|
|
(1)
|
In May 2013, our Board adopted a resolution that prohibited further grants under the Amended and Restated 2003 Equity Incentive Plan. The number of securities to be issued upon exercise of outstanding stock options, warrants and rights issued under the Amended and Restated 2003 Equity Incentive Plan includes 404 shares issuable under restricted stock units and deferred stock units. These restricted and deferred stock units are excluded from the weighted average exercise price calculation above.
|
(2)
|
The number of securities to be issued upon exercise of outstanding stock options, warrants and rights issued under the Amended and Restated 2013 Equity Incentive Plan includes 836,122 shares issuable under restricted stock units and deferred stock units. Additionally, this number includes 2,007,319 performance restricted stock units which reflects a maximum payout of the awards granted. These restricted, deferred and performance restricted stock units are excluded from the weighted average exercise price calculation above. For more information on the aspirational PRSU awards, please see "Compensation Discussion and Analysis - 2018 Compensation Actions - 2015 Aspirational Grants" and "Compensation Discussion and Analysis - 2018 Compensation Actions - 2017 Aspirational Grants." These restricted, deferred and performance restricted stock units are excluded from the weighted average exercise price calculation above.
|
•
|
Total Global Population. This is the second year in which we will use the same median employee that we selected as of October 1, 2017. When we selected our median employee last year, we determined that as of October 1, 2017 our employee population consisted of approximately 7,000 individuals working for Tempur Sealy. As of October 2, 2018, our employee population consisted of approximately 6,200 individuals working for Tempur Sealy.
|
•
|
We also evaluated the effect of the closure of our St. Paul, Minnesota facility and determined that it was not material for purposes of identifying a new median employee in 2018.
|
•
|
Given the geographical distribution of our employee population, we use a variety of pay elements to structure the compensation arrangements of our employees. Consequently, for purposes of measuring the compensation of our employees to identify the median employee in 2017, rather than using annual total compensation, we selected base salary / wages and overtime pay, plus actual annual cash incentive compensation (annual bonus) paid through October 1, 2017 as the compensation measure. We annualized the compensation of employees to cover the full calendar year, and also annualized any new hires in 2017 as if they were hired at the beginning of the fiscal year, as permitted by SEC rules, in identifying the median employee. We did not change our compensation practices in 2018 so believe the methodology used in 2017 is applicable to 2018 and, thus, using the same median employee is appropriate.
|
•
|
We did not make any cost-of-living adjustments in identifying the median employee.
|
Description of Compensation
|
2017 Board Year
|
2018 Board Year
|
Annual Retainer:
|
$70,000 cash retainer, payable in equal quarterly installments
|
$90,000 cash retainer, payable in equal quarterly installments
|
Annual Equity Award Grant:
|
An annual equity award targeted at $130,000 and granted as DSUs.
|
An annual equity award targeted at $130,000 and granted as DSUs.
|
Annual Lead Director Retainer:
|
A supplemental equity award targeted at $35,000 and granted as DSUs.
|
A supplemental equity award targeted at $35,000 and granted as DSUs.
|
Annual Committee Chair Retainer:
• Audit
• Compensation
• Nominating and Corporate
Governance
|
• Cash retainer of $10,000
• Cash retainer of $10,000
• Cash retainer of $10,000
|
• Cash retainer of $15,000
• Cash retainer of $15,000
• Cash retainer of $10,000
|
Committee Member Retainer:
• Audit
• Compensation
• Nominating and Corporate
Governance
|
• No Additional Compensation
• No Additional Compensation
• No Additional Compensation
|
• No Additional Compensation
• No Additional Compensation
• No Additional Compensation
|
Expense Reimbursements:
|
Reimbursement of reasonable expenses incurred in attending meetings
|
|
Fees Earned Or Paid In Cash ($)
(1)
|
Stock Awards
(2)
|
Option Awards
(3)
|
Non-Equity Incentive Plan Compens-ation($)
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings($)
|
All other Compen-sation($)
|
|
|||||||||||
Name
|
$
|
#
|
$
|
#
|
Total ($)
|
|||||||||||||
Evelyn S. Dilsaver
|
92,500
|
|
130,000
|
|
2,811
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
222,500
|
|
John A. Heil
|
90,000
|
|
130,000
|
|
2,811
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
220,000
|
|
Jon L. Luther
|
92,500
|
|
130,000
|
|
2,811
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
222,500
|
|
Arik W. Ruchim
(4)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Richard W. Neu
(5)
|
35,000
|
|
210,000
|
|
4,515
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
245,000
|
|
Robert B. Trussell, Jr.
|
80,000
|
|
130,000
|
|
2,811
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
210,000
|
|
Cathy R. Gates
(6)
|
30,000
|
|
108,000
|
|
2,108
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
138,000
|
|
(1
|
)
|
Director compensation is based on the Board year, which is the period from one annual meeting to the next annual meeting, and fees are paid in arrears at the end of July, October, January and April. As required by SEC rules, the amounts shown in this table were paid during calendar year 2018. The table reflects amounts paid during the second half of the 2017 Board Year (which ended on May 10, 2018) and amounts paid through December 31, 2018 of the 2018 Board Year.
|
||||||||
(2
|
)
|
The DSUs granted during calendar year 2018 vest in four equal increments at the end of July 2018, October 2018, January 2019 and April 2019. Vesting of each DSU is subject to the applicable grant recipient being a member of the Board as of the applicable vesting date. All DSUs which become vested shall be paid on the third anniversary date of the grant date applicable to each DSU, or such later date elected by the Director in accordance with the Non-Employee Director Deferred Compensation Plan. The value of the DSU awards set forth is the grant date fair value, calculated in accordance with FASB ASC 718. See the Company's Annual Report on Form 10-K for the year ended December 31, 2018 for a complete description of the valuations.
|
||||||||
(3
|
)
|
No stock options were granted to non-employee Board members during calendar year 2018.
|
||||||||
(4
|
)
|
In accordance with the policies of H Partners, of which he is a Partner, Mr. Ruchim declined to accept any compensation.
|
||||||||
(5
|
)
|
In 2018 Mr. Neu elected to receive a portion of his cash compensation as equity. The number of shares awarded each quarter is calculated based upon the closing price of the Company's common stock on the date the cash would otherwise have been payable.
|
||||||||
(6
|
)
|
Ms. Gates compensation is pro-rated from July 6, 2018, the date she was appointed to the Board.
|
Name
|
Aggregate Option Awards
Outstanding As of
December 31, 2018
|
Aggregate DSU Awards Outstanding As of December 31, 2018
|
|
Vested
|
Unvested
(a)
|
||
Evelyn S. Dilsaver
|
18,669
|
6,200
|
1,405
|
Cathy R. Gates
|
—
|
1,054
|
1,054
|
John A. Heil
|
9,878
|
6,200
|
1,405
|
Jon L. Luther
|
1,669
|
6,200
|
1,405
|
Arik W. Ruchim
|
—
|
—
|
—
|
Richard W. Neu
|
675
|
7,869
|
1,784
|
Robert B. Trussell, Jr.
|
11,478
|
6,200
|
1,405
|
(a)
|
Reflects DSUs granted to members of the Board that are unvested, or are vested, but are still subject to the applicable deferral period required in the award agreement. Shares released upon satisfaction of the applicable deferral period and still held by the Director are reflected in the Beneficial Ownership Table elsewhere in this Proxy Statement.
|
|
|
2018
|
|
2017
|
||||
Audit fees
(1)
|
|
$
|
4,097
|
|
|
$
|
4,117
|
|
Audit-related fees
(2)
|
|
146
|
|
|
650
|
|
||
Tax fees
(3)
|
|
2,801
|
|
|
2,979
|
|
||
Other
(4)
|
|
$
|
278
|
|
|
$
|
—
|
|
Total
|
|
$
|
7,322
|
|
|
$
|
7,746
|
|
(1)
|
Audit fees for
2018
and
2017
relate to professional services provided in connection with the audit of our consolidated financial statements and internal control over financial reporting, the reviews of our quarterly consolidated financial statements and audit services provided in connection with other regulatory filings and the statutory audits of certain subsidiaries.
|
(2)
|
Audit-related fees in
2018
and
2017
principally relate to acquisition related due diligence services.
|
(3)
|
Tax fees in
2018
consist of approximately $1.6 million for domestic and international tax compliance and related activities and $1.2 million for tax services related to the impact of U.S. Tax Reform and certain one-time business restructuring activities. Tax fees in
2017
principally relate to professional services rendered in connection with domestic and international tax compliance, tax audits, and other international tax consulting and planning services.
|
(4)
|
Other fees in 2018 principally relate to permitted risk management advisory services.
|
|
Submitted by,
|
|
|
|
AUDIT COMMITTEE:
|
|
Evelyn S. Dilsaver (Chair)
|
|
Cathy R. Gates
|
|
John A. Heil
|
|
Richard W. Neu
|
•
|
The vast majority of our executives' total compensation opportunity is in the form of incentive-based compensation, the majority of which is equity-based, tied to long-term performance objectives and aligned with stockholder interests.
|
•
|
We tie performance-based incentives to metrics that drive the leadership team and other associates to accomplish our most important business goals.
|
•
|
We require our executives to meet meaningful stock ownership and retention requirements.
|
•
|
In 2015, we adopted a Clawback Policy providing that certain performance-based compensation is recoverable from specified officers, including the NEOs, if that officer has engaged in fraud, willful misconduct or gross negligence that directly caused or otherwise directly contributed to the need for a material restatement of the Company's financial results.
|
•
|
We prohibit the hedging or pledging of Company securities by employees, executive officers and members of the Board.
|
•
|
We prohibit the re-pricing or exchange of stock options or stock appreciation rights without stockholder approval.
|
•
|
As described elsewhere in this Proxy Statement, we do not provide excessive perquisites. Other than those benefits described, we do not provide additional perquisites or benefits to our NEOs that differ from those provided to other employees.
|
Corporate Secretary
Tempur Sealy International, Inc.
1000 Tempur Way
Lexington, Kentucky 40511
|
•
|
providing written notice that is received by Tempur Sealy International's Corporate Secretary between December 11, 2019, and January 10, 2020 (subject to adjustment if the date of the
2020
Annual Meeting is advanced by more than 30 days, or delayed by more than 60 days, from the first anniversary date of the
2019
Annual Meeting, as provided in Article II, Section 2.12 and 2.13 of the By-Laws); and
|
•
|
supplying the additional information listed in Article II, Sections 2.12 and 2.13 of the By-Laws.
|
(in millions)
|
|
2018
|
|
2017
|
||||
GAAP net income
|
|
$
|
100.5
|
|
|
$
|
151.4
|
|
Interest expense, net
|
|
92.3
|
|
|
87.3
|
|
||
Income taxes
|
|
49.6
|
|
|
43.8
|
|
||
Depreciation and amortization
|
|
113.7
|
|
|
94.0
|
|
||
EBITDA
|
|
356.1
|
|
|
376.5
|
|
||
Adjustments:
|
|
|
|
|
||||
Loss from discontinued operations, net of tax
(1)
|
|
17.8
|
|
|
30.9
|
|
||
Restructuring costs
(2)
|
|
22.3
|
|
|
—
|
|
||
Customer-related charges
(3)
|
|
21.2
|
|
|
—
|
|
||
Supply chain transition costs
(4)
|
|
7.3
|
|
|
—
|
|
||
Customer termination charges
(5)
|
|
—
|
|
|
34.3
|
|
||
Other costs
(6)
|
|
—
|
|
|
3.4
|
|
||
Latin American subsidiary charges
(7)
|
|
—
|
|
|
0.5
|
|
||
Adjusted EBITDA
|
|
$
|
424.7
|
|
|
$
|
445.6
|
|
(1)
|
Certain subsidiaries in the International business segment are accounted for as discontinued operations and have been designated as unrestricted subsidiaries in the 2016 Credit Agreement. Therefore, these subsidiaries are excluded from our adjusted financial measures for covenant compliance purposes.
|
(2)
|
In 2018, we recorded $24.9 million of restructuring costs, including $2.6 million of depreciation expense. These costs included $11.5 million of charges related to the operational alignment of a joint venture that was wholly acquired in the North America business segment, including $2.6 million of depreciation expense and $1.3 million of other expense, net. Restructuring costs also included $8.5 million of expenses in the International business segment related to International simplification efforts, including headcount reduction, professional fees and store closures, and $4.9 million of Corporate professional fees related to restructuring activities.
|
(3)
|
On January 11, 2019, iMS, a customer, filed a voluntary petition in U.S. Bankruptcy Court for the Eastern District of Kentucky seeking relief under Chapter 11 of the U.S. Bankruptcy Code. In the fourth quarter of 2018, we recorded charges of $21.2 million associated with certain iMS-related assets on the our Consolidated Balance Sheet as of December 31, 2018, primarily made up of trade and other receivables, to fully reserve this account.
|
(4)
|
In 2018, we recorded $7.3 million of supply chain transition costs which represent charges incurred to consolidate certain manufacturing and distribution facilities, including $0.8 million of other expense.
|
(5)
|
Adjusted EBITDA for 2017 excludes $34.3 million of charges related to the termination of the relationship with Mattress Firm. This amount represents the $25.9 million of net charges and adds the net amortization impact of $8.4 million of stock-based compensation benefit incurred in the first quarter of 2017.
|
(6)
|
In 2017, we incurred $3.4 million in other costs. We incurred $1.9 million of customer-related charges, $1.1 million in charges for hurricane-related costs and $0.4 million in costs associated with an early lease termination.
|
(7)
|
In 2017, we incurred $0.5 million of legal charges associated with a Latin American subsidiary.
|
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