o Preliminary
Proxy Statement
|
||
o Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
||
x Definitive
Proxy Statement
|
||
o Definitive
Additional Materials
|
||
o Soliciting
Material Pursuant to § 240.14a-12
|
(1)
|
Title
of each class of securities to which transaction
applies:
|
(2)
|
Aggregate
number of securities to which transaction
applies:
|
(3)
|
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):
|
(4)
|
Proposed
maximum aggregate value of
transaction:
|
(5)
|
Total
fee paid:
|
o
|
Fee
paid previously with preliminary materials.
|
o
|
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.
|
(1)
|
Amount
previously paid:
|
(2)
|
Form,
Schedule or Registration Statement
No.:
|
(3)
|
Filing
Party:
|
(4)
|
Date
Filed:
|
VOTE BY INTERNET
|
VOTE BY TELEPHONE
|
VOTE BY MAIL
|
|||
http://www.proxyvote.com
24 hours
a day/7 days a week
Use
the Internet to vote your
proxy.
Have your proxy card
in
hand when you access the
web
site.
|
1-800-690-6903
toll-free
24 hours
a
day/7 days a week
Use
any touch-tone telephone
to
vote your proxy. Have your
proxy
card in hand when you call.
|
Sign
and date the proxy card and
return
it in the enclosed postage-
paid
envelope.
|
|||
Sincerely,
|
MARK
SARVARY
|
|
President,
Chief Executive Officer and Director
|
|
Dale
E. Williams
|
|
Executive
Vice President, Chief Financial Officer, and Secretary
|
|
Lexington,
Kentucky
|
|
March
25, 2009
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49
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49
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49
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49
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50
|
Q:
|
Who may vote at the meeting? | |
A:
|
Our
Board set March 6, 2009 as the record date for the meeting. All
stockholders who owned Tempur-Pedic International common stock of record
at the close of business on March 6, 2009 may attend and vote at the
meeting. Each stockholder is entitled to one vote for each share of common
stock held on all matters to be voted on. On March 6, 2009, 74,894,372
shares of Tempur-Pedic International common stock were
outstanding.
|
|
|
||
Q:
|
How
many votes does Tempur-Pedic International need to be present at the
meeting?
|
|
A:
|
A
majority of Tempur-Pedic International’s outstanding shares of common
stock as of the record date must be present at the meeting in order to
hold the meeting and conduct business. This is called a quorum. Shares are
counted as present at the meeting if you:
|
|
•
|
Are
present and vote in person at the meeting; or
|
|
•
|
Have
properly submitted a proxy card, by submitting the proxy card via the
Internet, telephone or in writing.
|
|
Q: |
What
proposals will be voted on at the meeting?
|
|
A: |
There
are three proposals scheduled to be voted on at the
meeting:
|
|
•
|
Election
of ten (10) directors to each serve for a one-year term and until the
director’s successor has been duly elected and qualified (Proposal
One).
|
|
•
|
Approval
of the First Amendment to our Amended and Restated 2003 Equity Incentive
Plan (Proposal Two).
|
|
•
|
Ratification
of the appointment of the firm of Ernst & Young LLP as
Tempur-Pedic International’s independent auditors for the year ending
December 31, 2009 (Proposal Three).
|
|
Q:
|
What
is the voting requirement to approve the proposal?
|
|
A:
|
In
Proposal One for the election of directors, those ten nominees who receive
the highest number of affirmative “FOR” votes of the shares present or
represented and entitled to vote at the meeting will be elected. Proposals
Two and Three require the affirmative “FOR” vote of a majority of the
shares of common stock present or represented and entitled to vote at the
Annual
Meeting.
|
Q:
|
How
would my shares be voted if I do not specify how they should be
voted?
|
|
A:
|
If
you sign and return your proxy card without indicating how you want your
shares to be voted, the Proxy Committee appointed by the Board will vote
your shares as follows:
|
|
Proposal
One: “FOR” the election of ten directors to each serve for a one-year term
and until the director’s successor has been duly elected and
qualified.
|
||
Proposal Two:
“FOR” the approval of the First Amendment to our Amended and Restated 2003
Equity Incentive Plan
|
||
Proposal
Three: “FOR” the ratification of the appointment of the firm of Ernst
& Young LLP as Tempur-Pedic International’s independent auditors for
the year ending December 31, 2009.
|
||
Q:
|
How
are the votes counted?
|
|
A:
|
Proposal
One, you may vote “FOR” or “WITHHOLD” with respect to each specific
nominee. For Proposal Two, you may vote “FOR,” “AGAINST,” or “ABSTAIN.”
Abstentions and broker “non-votes” are counted as present and entitled to
vote for purposes of determining a quorum. A broker “non-vote” occurs when
a nominee holding shares for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting
power with respect to that item and has not received instructions from the
beneficial owner.
|
|
|
Proposal
One - Election of Directors
|
|
Abstentions
and broker non-votes are not counted for purposes of the election of
directors.
|
||
|
Proposal
Two –Approval of the First Amendment to our Amended and Restated 2003
Equity Incentive Plan
|
|
An
abstention is counted as a vote against the approval of the First
Amendment to our Amended and Restated 2003 Equity Incentive Plan (Proposal
Two). A broker “non-vote” is not considered as a vote cast
under the rules of the NYSE, but the underlying shares are considered
shares entitled to vote on the proposal. As a result, under the rules of
the NYSE, the passage of the First Amendment to our Amended and Restated
2003 Equity Incentive Plan (Proposal Two) may not pass if the number of
votes actually cast did not constitute a majority of our outstanding
shares of common stock represented at the meeting.
|
||
Proposal
Three –Ratification of Auditors
|
||
An
abstention is counted as a vote against the ratification of the
independent auditor (Proposal Three). A broker non-vote is not
counted for purposes of ratification of the independent auditor and all
other matters to properly come before the meeting.
|
||
|
Voting
results will be tabulated and certified by Broadridge Financial
Solutions.
|
|
Q:
|
How
may I vote my shares in person at the meeting?
|
|
A:
|
Shares
held directly in your name as the stockholder of record may be voted in
person at the meeting. If you choose to attend the meeting, please bring
the enclosed proxy card and proof of identification for entrance to the
meeting. If you hold your shares in street name, you must request a legal
proxy from your stockbroker in order to vote at the
meeting.
|
Q:
|
How
can I vote my shares without attending the meeting?
|
|
A:
|
You
may vote in person at the meeting or by proxy. We recommend you vote by
proxy even if you plan to attend the meeting. You can always change your
vote at the meeting. Giving us your proxy means you authorize us to vote
your shares at the meeting in the manner you direct.
If
your shares are held in your name, you can vote by proxy in three
convenient ways:
Via
Internet: Go to http://www.proxyvoting.com
and follow the instructions. You will need to enter the control
number printed on your proxy card.
By
Telephone: Call toll-free 1-800-690-6903 and follow the
instructions. You will need to enter the control number printed on your
proxy card.
In
Writing: Complete, sign, date and return your proxy card
in the enclosed envelope (if you have received a paper copy of the voting
materials).
If
your shares are held in street name, you may vote by submitting voting
instructions to your stockbroker or nominee. In most cases, you will be
able to do this by mail. Please refer to the summary instructions included
on your proxy card. For shares held in street name, the voting instruction
card will be included by your stockbroker or nominee.
|
|
|
You
may submit your proxy by mail by signing your proxy card or, for shares
held in street name, by following the voting instruction card included by
your stockbroker or nominee and mailing it in the enclosed, postage-paid
envelope. If you provide specific voting instructions, your shares will be
voted as you have instructed.
|
|
Q:
|
How
can I change my vote after I return my proxy card?
|
|
A:
|
You
may revoke your proxy and change your vote at any time before the final
vote at the meeting. You may do this by signing and submitting a new proxy
card with a later date or by attending the meeting and voting in person.
Attending the meeting will not revoke your proxy unless you specifically
request it.
|
|
Q:
|
What
is Tempur-Pedic International’s voting recommendation?
|
|
A:
|
Our
Board of Directors recommends that you vote your shares “FOR” each of the
nominees to the Board (Proposal One), “FOR” the approval of the First
Amendment to our Amended and Restated 2003 Equity Incentive Plan (Proposal
Two) and “FOR” the ratification of the appointment of Ernst & Young
LLP as Tempur-Pedic International’s independent auditors for the year
ending December 31, 2009 (Proposal Three).
|
|
Q:
|
Where
can I find the voting results of the meeting?
|
|
A:
|
The
preliminary voting results will be announced at the meeting. The final
results will be published in our quarterly report on Form 10-Q for
the second quarter of 2009.
|
Name
|
Age
|
Position
|
||||
Mark
Sarvary
|
49
|
President
and Chief Executive Officer
|
||||
Matthew
D. Clift
|
49
|
Executive
Vice President of Global Operations
|
||||
David
Montgomery
|
48
|
Executive
Vice President and President of International
Operations
|
||||
Richard
W. Anderson
|
49
|
Executive
Vice President and President, North America
|
||||
Dale
E. Williams
|
46
|
Executive
Vice President, Chief Financial Officer, and Secretary
|
||||
Bhaskar
Rao
|
43
|
Chief
Accounting Officer and Vice President of Strategic
Planning
|
• |
Mission
Statement
|
|
• |
Core
Values
|
|
• |
Corporate
Governance Guidelines
|
|
• |
Code
of Business Conduct and Ethics for Employees, Executive Officers and
Directors
|
|
• |
Policy
on Complaints of Accounting, Internal Accounting Controls and Auditing
Matters
|
|
• |
Audit
Committee Charter
|
|
• |
Compensation
Committee Charter
|
|
• |
Nominating
and Corporate Governance Committee Charter
|
|
• |
Committees
Membership
|
|
• |
Contact
the Presiding
Director
|
The
Audit Committee
|
•
|
reviewing
the scope of internal and independent audits;
|
|
•
|
reviewing
the Company’s quarterly and annual financial statements and annual report
on Form 10-K;
|
|
•
|
reviewing
the adequacy of management’s implementation of internal
controls;
|
|
•
|
reviewing
the Company’s accounting policies and procedures and significant changes
in accounting policies;
|
|
•
|
reviewing
the Company’s business conduct and ethics policies and
practices;
|
|
•
|
reviewing
the Company’s policies with respect to risk assessment and risk
management;
|
|
•
|
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;
|
|
•
|
preparing
an annual evaluation of the committee’s performance;
|
|
•
|
reporting
regularly to the Board on the committee’s activities;
and
|
|
•
|
appointing
the independent public accountants and reviewing their independence and
performance and the reasonableness of their
fees.
|
The
Compensation Committee
|
•
|
reviewing
and approving on an annual basis the corporate goals and objectives with
respect to compensation for the chief executive officer, evaluating at
least once a year the chief executive officer's performance in light of
these established goals and objectives and, based upon these evaluations,
determining and approving the chief executive officer's annual
compensation, including salary, bonus, incentive and equity
compensation;
|
•
|
|
reviewing
on an annual basis the Company's compensation structure for officers and
employees other than the chief executive officer and making
recommendations to the Board regarding the compensation of these officers
and employees;
|
•
|
|
oversee
the development of executives succession plans and the leadership
development and training of the Company’s executive
team;
|
•
|
|
reviewing
on an annual basis the Company’s compensation structure for its directors
and making recommendations to the Board regarding the compensation of
directors;
|
•
|
|
reviewing
the Company's incentive compensation and other stock-based plans and
recommending changes in such plans to the Board as needed, having and
exercising all the authority of the Board with respect to the
administration of such plans;
|
•
|
|
reviewing
executive officer compensation for compliance with Section 16 of the
Exchange Act and Section 162(m) of the Internal Revenue Code of 1986, as
amended (Code), and other applicable laws, rules and
regulations;
|
•
|
|
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;
|
•
|
|
reviewing
with management the “Compensation Discussion and Analysis” section in the
Company’s Proxy Statement;
|
•
|
|
preparing
and publishing an annual executive compensation report in the Company's
Proxy Statement;
|
•
|
|
preparing
an annual evaluation of the committee's
performance;
|
•
|
|
reporting
regularly to the Board on the committee's
activities;
|
•
|
|
performing
any other activities consistent with the committee’s charter, the
Company's by-laws and governing law, as the committee or the Board deems
appropriate; and
|
•
|
|
with
respect to any reference in the committee’s charter to NYSE or SEC
requirements, complying with these requirements when listed by the NYSE or
subject to the requirements of the
SEC.
|
The
Nominating and Corporate Governance
Committee
|
•
|
identifying
individuals qualified to become members of the Board;
|
|
•
|
recommending
to the Board director nominees to be presented at the annual meeting of
stockholders and to fill vacancies on the Board;
|
|
•
|
developing
appropriate criteria for identifying properly qualified directorial
candidates;
|
|
•
|
reviewing
and recommending to the Board annual members to each standing committee of
the Board;
|
|
•
|
preparing
an annual evaluation of the committee’s performance and reporting
regularly to the Board concerning actions and recommendations of the
committee;
|
|
•
|
establishing
procedures to assist the Board in developing and evaluating potential
candidates for executive positions, including the chief executive
officer;
|
|
•
|
reviewing
and evaluating related party transactions; and
|
|
•
|
developing
and recommending to the Board corporate governance guidelines for the
Company.
|
• |
|
a
reputation for integrity, honesty and adherence to high ethical
standards;
|
•
|
|
the
ability to exercise sound business
judgment;
|
•
|
|
substantial
business or professional experience and the ability to offer meaningful
advice and guidance to the Company’s management based on that experience;
and
|
•
|
|
to
devote the time and effort necessary to fulfill their responsibilities to
the Company.
|
•
|
each
person known to beneficially own more than 5% of Tempur-Pedic
International’s outstanding common stock;
|
|
•
|
each
of Tempur-Pedic International’s directors and Named Executive Officers (as
defined below in “Executive Compensation and Related
Information”); and
|
|
•
|
all
of Tempur-Pedic International’s directors and executive officers as a
group.
|
Shares Beneficially Owned
|
|||||||
Number
of
|
Percentage
|
||||||
Name of Beneficial Owner:
|
Shares
|
of Class
|
|||||
5%
Stockholders:
|
|||||||
Invesco
Ltd. (1)
|
15,212,002
|
20.3
|
% | ||||
FMR
LLC (2)
|
5,274,900
|
7.0
|
% | ||||
Kayne
Anderson Rudnick Investment Management LLC (3)
|
4,746,138
|
6.3
|
%
|
||||
Friedman
Fleischer & Lowe Funds (4)
|
4,275,425
|
5.7
|
% | ||||
Franklin
Resources (5)
|
3,871,460
|
5.2
|
% | ||||
Executive
Officers and Directors:
|
|||||||
Mark
Sarvary
|
—
|
*
|
% | ||||
David
Montgomery (6)
|
637,566
|
*
|
% | ||||
Matthew
D. Clift (7)
|
329,834
|
*
|
% | ||||
Richard
W. Anderson (8)
|
87,500
|
*
|
% | ||||
Dale
E. Williams (9)
|
416,187
|
*
|
% | ||||
P.
Andrews McLane (10)
|
738,603
|
1.0
|
% | ||||
Christopher
A. Masto (11)
|
211,995
|
*
|
% | ||||
Francis
A. Doyle (12)
|
166,522
|
*
|
% | ||||
Nancy
F. Koehn (13)
|
91,150
|
*
|
% | ||||
Sir
Paul Judge (14)
|
91,150
|
*
|
% | ||||
Robert
B. Trussell, Jr. (15)
|
162,385
|
*
|
% | ||||
Peter
K. Hoffman (16)
|
52,950
|
*
|
% | ||||
John
Heil (17)
|
15,200
|
*
|
% | ||||
H.
Thomas Bryant (18)
|
113,836
|
*
|
% | ||||
All
executive officers and directors as a group (15 persons)
(19):
|
3,131,753
|
2.1
|
% |
*
|
Represents
ownership of less than one percent
|
(1)
|
Amounts
shown reflect the aggregate number of shares of common stock held by
Invesco Trimark Ltd, Invesco AIM Advisors, Inc., Invesco PowerShares
Capital Management LLC, Invesco Powershares Capital Management Ireland
Ltd. And Invesco Institutional (N.A.), Inc. based on information set forth
in a Schedule 13G/A filed with the SEC on February 10, 2009. The address
of Invesco Ltd. is 1555 Peachtree Street NE, Atlanta, GA
30309.
|
(2)
|
Amounts
shown reflect the aggregate number of shares of common stock held by FMR
LLC based on information set forth in a Schedule 13G filed with the SEC on
February 17, 2009. The address of FMR LLC is 82 Devonshire
Street, Boston, MA, 02109.
|
|
(3)
|
Amounts
shown reflect the aggregate number of shares of common stock held by Kayne
Anderson Rudnick Investment Management LLC based on information set forth
in Schedule 13G filed with the SEC on February 11, 2009. The address of
Kayne Anderson Rudnick Investment Management LLC is 1800 Avenue of the
Stars, 2nd
Floor, Los Angeles, CA 90067.
|
|
(4)
|
Amounts
shown reflect the aggregate number of shares of common stock held by
Friedman Fleischer & Lowe Capital Partners II, L.P., FFL Executive
Partners II, L.P. and FFL Parallel Fund II, L.P. (the “FFL
Funds”). The general partner of each of the FFL Funds is
Friedman Fleisher & Lowe GP II, L.P. (“FFL GP II”), and the general
partner FFL GP II is Friedman Fleischer & Lowe GP II, LLC (“FFL GP II,
LLC”). David L. Lowe, Spencer C. Fleischer, Tully M. Friedman
and Christopher A. Masto are managing members of FFL GP II,
LLC. Amounts shown and ownership of such shares are based on
information set forth in Schedule 13D filed with the SEC on March 31,
2008. The address of the FFL Funds is One Maritime Plaza, Suite 2200, San
Francisco, CA 94111.
|
|
(5)
|
Amounts
shown reflect the aggregate number of shares of common stock held by
Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson, Jr. and
Franklin Templeton Investments Corp. based on information set forth in a
Schedule 13G filed with the SEC on February 9, 2009. The
address of Franklin Resources, Inc., Charles B. Johnson, Rupert H.
Johnson, Jr. is One Franklin Parkway, San Mateo, CA
94403-1906. The address of Franklin Templeton Investments Corp
is 200 King Street West, Suite 1500, Toronto Ontario, M5H
3T4.
|
|
(6)
|
Includes
175,000 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009.
|
|
(7)
|
Includes
300,000 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009.
|
|
(8)
|
Includes
87,500 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009.
|
|
(9)
|
Includes
175,000 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6,
2009.
|
(10) |
Includes
254,943 shares of common stock which Mr. McLane may be deemed to have an
indirect pecuniary interest as his spouse is the trustee of 10 trusts
holding these shares in the aggregate for the benefit of his children and
grandchildren. Also includes 51,600 shares of common
stock issuable upon exercise of outstanding options exercisable within 60
days of March 6, 2009. The address for Mr. McLane is c/o T.A. Associates,
Inc., John Hancock Tower, 56th Floor, 200 Clarendon Street, Boston, MA 02116.
|
|
(11)
|
Includes
172,395 shares of common stock held in revocable trust for the benefit of
Mr. Masto’s children. Also includes 39,600 shares of common
stock issuable upon exercise of outstanding options exercisable within 60
days of March 6, 2009. The address for Mr. Masto is c/o Friedman Fleischer
& Lowe, LLC, One Maritime Plaza, 22nd Floor, San Francisco, CA 94111.
Mr. Masto
disclaims beneficial ownership of any shares held by the FFL Funds in
which he does not have a pecuniary interest.
|
|
(12)
|
Includes
66,150 shares of common stock issuable upon exercise of
outstanding options exercisable within 60 days of March 6, 2009. The
address for Mr. Doyle is c/o Connell Limited Partnership, One
International Place, Fort Hill Square, Boston, MA
02110.
|
|
(13)
|
Includes
91,150 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009. The
address for Ms. Koehn is Harvard Business School, Rock Center 110, Boston,
MA 02163.
|
|
(14)
|
Includes
91,150 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009. The
address for Sir Paul Judge is 88 The Panaromic, 152 Grosvenor Road, London
SW1V 3JL England.
|
|
(15)
|
Amount
reflects the aggregate number of shares owned by RBT Investments, LLC and
Robert B. Trussell and Martha O. Trussell, Tenants in Common, and includes
62,285 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009. The address for RBT
Investments, LLC and Robert B. Trussell and Martha O. Trussell, Tenants in
Common, is c/o Tempur-Pedic International Inc. 1713 Jaggie Fox Way,
Lexington, KY 40511.
|
|
(16)
|
Includes
52,950 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009. The
address for Mr. Hoffman is c/o Tempur –Pedic International Inc., 1713
Jaggie Fox Way, Lexington, KY 40511.
|
|
(17)
|
Includes
15,200 shares of common stock issuable upon exercise of outstanding
options exercisable within 60 days of March 6, 2009. The
address for Mr. Heil is c/o Spectrum Brands, Inc, 7794 Five Mile Road,
Suite 190, Cincinnati, OH 45230.
|
|
(18)
|
Includes
9,000 shares of common stock issuable upon exercise of outstanding and
currently exercisable options. The address for Mr. Bryant is
c/o Tempur –Pedic International Inc.,1713 Jaggie Fox Way, Lexington, KY
40511.
|
|
(19)
|
Includes
1,282,946 shares of common stock issuable upon exercise of outstanding and
currently exercisable
options.
|
Callaway
Golf
Central
Garden & Pet
Columbia
Sportswear
Deckers
Outdoor
Elizabeth
Arden
Fossil
|
Guess
Herman
Miller
Movado
Group
Nautilus
Nu
Skin Enterprises
Sealy
|
Select
Comfort
Timberland
Tupperware
Brands
Under
Armour
Wolverine
World Wide
|
Named
Executive Officer
|
Base
Salary Changes
|
|||||||||
2009
|
2008
|
|||||||||
Mark
Sarvary
|
0 | % | N/A |
(1)
|
||||||
H.
Thomas Bryant
|
N/A |
(2)
|
|
12 | % | (3) | ||||
Dale
E. Williams
|
0 | % | 10 | % | (4) | |||||
Matthew
D. Clift
|
0 | % | 5 | % | ||||||
David
Montgomery
|
0 | % | 4 | % | ||||||
Richard
W. Anderson
|
0 | % | 4 | % | ||||||
(1)
|
Mr.
Sarvary joined us in June 2008 and became Chief Executive Officer
effective August 4, 2008.
|
|
(2)
|
In August 2008, Mr. Bryant retired as our President and Chief Executive Officer and remained on our Board of Directors as a non-employee director. | |
(3)
|
4% merit increase and 8% adjustment relative to peer group data. | |
(4)
|
4% merit increase and 6% adjustment relative to peer group data. |
Named
Executive Officer
|
Targeted
Annual Incentive Bonus
|
||||||||
2009
|
2008
|
||||||||
Mark
Sarvary
|
100 | % | 100 | % | (1) | ||||
H.
Thomas Bryant
|
N/A | 100 | % | ||||||
Dale
E. Williams
|
55 | % | 55 | % | |||||
Matthew
D. Clift
|
55 | % | 55 | % | |||||
David
Montgomery
|
55 | % | 55 | % | |||||
Richard
W. Anderson
|
55 | % | 55 | % |
(1)
|
Mr.
Sarvary’s target bonus was set at 100% of the salary payable to him for
the June 30, 2008 to December 31, 2008
period.
|
Named
Executive Officer
|
February
2009 Stock Option Award
|
|||
Dale
E. Williams
|
180,000 | |||
Matthew
D. Clift
|
210,000 | |||
David
Montgomery
|
180,000 | |||
Richard
W. Anderson
|
150,000 |
Non-equity
|
||||||||||||||||||||||||||||||||
Stock
|
Incentive
Plan
|
All
Other
|
||||||||||||||||||||||||||||||
|
Bonus
|
Awards
|
Option
|
Compensation
|
Compensation
|
Total
|
||||||||||||||||||||||||||
Name
and Principal Position
|
Year
|
Salary
($)
|
($)
(6)
|
($)
|
Awards($)
(7)
|
($)
(6)
|
($)
(8)
|
($)
|
||||||||||||||||||||||||
Mark
Sarvary—President and Chief Executive Officer (1)
|
2008
|
$
|
360,577
|
$
|
218,750
|
$
|
—
|
$
|
308,976
|
$
|
175,000
|
$
|
104,115
|
$
|
1,167,418
|
|||||||||||||||||
H.
Thomas Bryant—President and Chief Executive Officer (2)
|
2008
|
506,784
|
—
|
—
|
603,811
|
—
|
22,887
|
1,133,482
|
||||||||||||||||||||||||
2007
|
623,537
|
290,909
|
—
|
1,025,215
|
799,119
|
22,057
|
2,760,837
|
|||||||||||||||||||||||||
2006
|
537,305
|
198,000
|
—
|
571,121
|
311,550
|
21,938
|
1,639,914
|
|||||||||||||||||||||||||
Dale
E. Williams—Executive
Vice-President, Chief Financial Officer and
Secretary
|
2008
|
341,601
|
68,567
|
—
|
368,041
|
—
|
17,230
|
795,439
|
||||||||||||||||||||||||
2007
|
309,987
|
67,158
|
—
|
326,204
|
198,673
|
17,230
|
919,252
|
|||||||||||||||||||||||||
2006
|
294,054
|
48,757
|
—
|
307,525
|
76,718
|
19,441
|
746,495
|
|||||||||||||||||||||||||
Matthew
D. Clift—Executive Vice-President, Global Operations (3)
|
2008
|
360,795
|
66,000
|
—
|
266,722
|
—
|
17,230
|
710,747
|
||||||||||||||||||||||||
2007
|
344,867
|
86,224
|
438,162
|
202,125
|
221,066
|
17,230
|
1,309,675
|
|||||||||||||||||||||||||
2006
|
324,121
|
53,741
|
438,162
|
202,125
|
84,560
|
20,832
|
1,123,541
|
|||||||||||||||||||||||||
David
Montgomery —Executive Vice-President, President of International
Operations (4)
|
2008
|
444,613
|
60,439
|
—
|
505,969
|
—
|
81,254
|
1,092,275
|
||||||||||||||||||||||||
2007
|
461,455
|
68,671
|
—
|
442,495
|
293,437
|
86,790
|
1,352,848
|
|||||||||||||||||||||||||
2006
|
408,798
|
71,635
|
—
|
315,290
|
112,717
|
72,838
|
981,278
|
|||||||||||||||||||||||||
Richard
W. Anderson—Executive Vice-President, President North America
(5)
|
2008
|
328,700
|
54,120
|
—
|
696,346
|
—
|
20,645
|
1,099,811
|
||||||||||||||||||||||||
2007
|
314,711
|
68,182
|
—
|
296,561
|
201,701
|
8,230
|
889,385
|
|||||||||||||||||||||||||
2006
|
132,692
|
34,750
|
—
|
66,143
|
38,944
|
79,043
|
351,572
|
(1)
|
Mr.
Sarvary joined the Company on June 30, 2008 and became our President and
Chief Executive Officer on August 4, 2008. Mr. Sarvary received a bonus of
$100,000 at the time he accepted employment with us. The remainder of this
amount is representative of annual bonus payouts which were earned in 2008
and paid in February
2009.
|
(2)
|
Mr.
Bryant was promoted to the position of Chief Executive Officer at our
Annual Stockholder’s Meeting held on April 28, 2006. He retained the
position of President of Tempur-Pedic International, and was elected as a
member of our Board of Directors. On August 4, 2008, Mr. Bryant retired as
President and Chief Executive Officer and remained on our Board of
Directors. Mr. Bryant’s salary for 2008 is comprised of $437,554 earned
while serving as President and Chief Executive Officer, $59,230 of unused
vacation that was paid-out upon Mr. Bryant’s retirement and $10,000 paid
for serving as a non-employee member of our Board of
Directors.
|
|
(3)
|
On
December 1, 2004, Mr. Clift was awarded 70,000 restricted stock units. The
fair market value of Tempur-Pedic International’s common stock on that
date was $19.30, resulting in a restricted stock award of
$1,351,000.
|
(4)
|
Mr.
Montgomery’s salary is paid in British Pounds (₤) and is converted to
United States Dollars ($) using the monthly payments translated at the
monthly average rate for each month in the year ended December 31, 2008.
Mr. Montgomery’s Non-Equity Incentive Plan Compensation is denominated in
British Pounds and has been converted to United States Dollar using the
conversion rate for the date paid to Mr. Montgomery.
|
|
(5)
|
Mr.
Anderson joined the Company in July 2006 and received a bonus of $10,000
at the time he accepted employment with us. The remainder of this amount
is representative of annual bonus payouts which were earned in 2006 and
paid in February 2007.
|
|
(6)
|
Bonus
and Non-equity Incentive Plan Compensation payouts were earned in 2008 and
paid in February 2009 to Mr. Sarvary, Mr. Williams, Mr. Clift, Mr.
Montgomery and Mr. Anderson, pursuant to the 2008 Executive Incentive
Bonus Plan as discussed in the “Compensation Discussion and Analysis”
section of this Proxy Statement. As described in the Compensation
Discussion and Analysis,” the amount paid upon the achievement of the
Individual goals appear in the column “Bonus” and the amounts paid upon
the achievement of the Company performance appear in the column
“Non-equity Incentive Plan Compensation.”
|
|
(7)
|
For
stock options granted, the value set forth is also included in the
Company’s financial statements in accordance with FAS 123(R). See the
Company’s Annual Report for the year ended December 31, 2008 for a
complete description of the FAS 123(R) valuation.
|
|
(8)
|
Represents
amounts paid on behalf of each of the Named Executive Officers for the
following three respective categories of compensation: (i) premiums
for life, accidental death and dismemberment insurance and long-term
disability benefits, (ii) contributions to our defined contribution
plans and (iii) car allowance. Amounts for each of the Named Executive
Officers for each of the three respective preceding categories is as
follows: Mr. Sarvary: (2008 – $515,$0, $3,600); Mr. Bryant: (2008 –
$687, $18,000, $3,600; 2007 – $1,030, $13,827, $7,200; 2006 – $1,330,
$13,408, $7,200); Mr. Williams: (2008 – $1,030, $9,000, $7,200; 2007
– $1,030, $9,000, $7,200; 2006 – $1,330, $10,911, $7,200); Mr.
Clift (2008 – $1,030, $9,000, $7,200; 2007 – $1,030, $9,000, $7,200; 2006
– $1,330, $12,302, $7,200); Mr. Montgomery: (2008 – $8,357, $44,461,
$27,788; 2007 – $6,492, $46,146, $30,017; 2006 – $5,192, $39,295, $27,647,
); and Mr. Anderson: (2008 – $1,030, $12,415, $7,200; 2007 – $1,030, $0,
$7,200; 2006 – $443, $0, $3,600). Mr. Sarvary received relocation expenses
in the amount of $100,000 which is included in “All Other Compensation.”
Mr. Anderson received relocation expenses in the amount of $75,000 which
is included in “All Other Compensation” for the year ended December 31,
2006. Mr. Montgomery also received tax preparation fees in the amount of
$648, $833 and $705 which is in “All Other Compensation” for the years
ended December 31, 2008, 2007 and 2006,
respectively.
|
Name
|
Grant
Date
(1)
|
All
Other Option Awards: Number of Securities Underlying Options
(#)
|
Exercise
or Base Price of Option Awards ($/Sh) (1)
|
Grant
Date Fair Value of Stock and Option Awards ($) (2)
|
|||||||||
Mark
Sarvary
|
6/30/2008
|
900,000 | $ | 7.81 | $ | 2,412,000 | |||||||
H.
Thomas Bryant (3)
|
7/8/2008
|
9,000 | 8.33 | 21,960 | |||||||||
Dale
E. Williams
|
5/15/2008
|
50,000 | 11.76 | 204,000 | |||||||||
Matthew
D. Clift
|
5/15/2008
|
50,000 | 11.76 | 204,000 | |||||||||
David
Montgomery
|
5/15/2008
|
50,000 | 11.76 | 204,000 | |||||||||
Richard
W. Anderson
|
1/29/2008
|
100,000 | 20.02 | 698,000 | |||||||||
5/15/2008
|
50,000 | 11.76 | 204,000 |
(1)
|
The
exercise price for each stock option is the market value on the date of
grant.
|
|
(2)
|
For
stock options granted, the value set forth represents the grant date fair
value as determined in accordance with FAS 123(R). See the Company’s
Annual Report for the year ended December 31, 2008 for a complete
description of the FAS 123(R) valuation.
|
|
(3)
|
On
July 8, 2008, Mr. Bryant received a grant of 9,000 options for his service
as a non-employee director on our Board. On July 8, 2008, our Compensation
Committee amended the stock option agreement by and between Mr. Bryant and
the Company dated as of June 26, 2006. This option agreement originally
stated that the exercise period for the options would expire on the
effective date of Mr. Bryant’s retirement as an employee of the Company.
The amendment approved by the Compensation Committee allows for a
ninety-day exercise period for the vested options. All other terms of the
option agreement remained the
same.
|
Option
Awards
|
|||||||||||
Number
of
|
|||||||||||
Number
of
|
Securities
|
||||||||||
`
|
Securities
|
Underlying
|
|||||||||
Underlying
|
Unexercised
|
||||||||||
Unexercised
|
Options
|
Option
|
Option
|
||||||||
Name
|
Options
(#)
Exercisable
|
(#)
Unexercisable
|
Exercise
Price
($)
|
Expiration
Date
|
|||||||
Mark
Sarvary
|
—
|
900,000
|
(1)
|
$
|
7.81
|
6/30/2018
|
|||||
H.
Thomas Bryant
|
3,000
|
6,000
|
(2)
|
8.33
|
7/8/2018
|
||||||
Dale
E. Williams
|
65,625
|
—
|
(3)
|
2.38
|
7/7/2013
|
||||||
78,125
|
171,875
|
(4)
|
13.47
|
6/28/2016
|
|||||||
—
|
50,000
|
(5)
|
11.76
|
5/15/2018
|
|||||||
Matthew
D. Clift
|
225,000
|
—
|
19.30
|
12/1/2014
|
|||||||
75,000
|
37,500
|
(6)
|
12.37
|
12/15/2015
|
|||||||
—
|
50,000
|
(5)
|
11.76
|
5/15/2018
|
|||||||
David
Montgomery
|
153,125
|
196,875
|
(7)
|
13.47
|
6/28/2016
|
||||||
—
|
50,000
|
(5)
|
11.76
|
5/15/2018
|
|||||||
Richard
W. Anderson
|
25,000
|
50,000
|
(8)
|
13.16
|
7/18/2016
|
||||||
37,500
|
37,500
|
(9)
|
20.27
|
12/21/2016
|
|||||||
—
|
100,000
|
(10)
|
20.02
|
1/29/2018
|
|||||||
—
|
50,000
|
(5)
|
11.76
|
5/15/2018
|
(1)
|
These
options, granted on June 30, 2008, have a 10-year term and become
exercisable in four equal installments over four years, beginning with the
one-year anniversary date of the grant.
|
|
(2)
|
Mr.
Bryant received a grant of 9,000 options to purchase shares of our common
stock on July 8, 2008 for his service as a non-employee director. These
options have a 10-year term and vest in three equal installments on
October 31, 2008, January 31, 2009 and April 30, 2009.
|
|
(3)
|
These
options, granted on July 7, 2003, have a 10-year term. Twenty-five percent
(25%) of these options became exercisable on the one-year anniversary date
of grant and the remaining shares become exercisable in equal installments
on a quarterly basis over the subsequent twelve (12)
quarters.
|
|
(4)
|
These
options, granted on June 28, 2006, have a 10-year term. Twenty-five
percent (25%) of these options became exercisable on July 7, 2008 and the
remaining shares become exercisable in equal installments on a quarterly
basis over the subsequent twelve (12) quarters.
|
|
(5)
|
These
options, granted on May 15, 2008, have a 10-year term and become
exercisable in two equal installments over two years, beginning with the
one-year anniversary date of the grant.
|
|
(6)
|
These
options, granted on December 15, 2005, have a 10-year term and become
exercisable in equal installments over four years, beginning
with the one-year anniversary of the grant date.
|
|
(7)
|
These
options, granted on June 28, 2006, have a 10-year term. Twenty-five
percent (25%) of these options became exercisable on February 24, 2008 and
the remaining shares become exercisable in equal installments on a
quarterly basis over the subsequent twelve
quarters.
|
(8)
|
These
options, granted on July 18, 2006, have a 10-year life and became
exercisable in equal installments over four years, beginning with the
one-year anniversary of the grant date.
|
|
(9)
|
These
options, granted on December 21, 2006, have a 10-year life and became
exercisable in equal installments over four years, beginning with the
one-year anniversary of the grant date.
|
|
(10)
|
These
options, granted on January 29, 2008, have a 10-year life and became
exercisable in equal installments over four years, beginning with the
one-year anniversary of the grant
date.
|
Option
Awards
|
Stock
Awards
|
|||||||||||||||
Number
of
|
Number
of Shares
|
|||||||||||||||
Shares
Acquired
on
|
Value
Realized on
|
Acquired
on Vesting
|
Value
Realized on
|
|||||||||||||
Name
|
Exercise
(#)
|
Exercise
($)
|
(#)
|
Vesting
($)
|
||||||||||||
H.
Thomas Bryant
|
13,540
|
$
|
102,098
|
—
|
—
|
|||||||||||
Matthew
D. Clift
|
11,666
|
$
|
302,966
|
|||||||||||||
David
Montgomery
|
7,966
|
115,959
|
Termination
|
||||||||||||||||||
Termination
|
Employee
|
Termination
|
Due
to
|
|||||||||||||||
By
Company
|
Termination
|
By
Company
|
Death
or
|
|||||||||||||||
Without
Cause
|
For
Good Reason
|
For
Cause
|
Disability
|
|||||||||||||||
Name
|
Benefits
and Payments
|
($)
(1) (2)
|
($)
(1) (2)
|
($)
|
($)
(3)
|
|||||||||||||
Mark
Sarvary
|
Cash
Severance
|
$ |
2,187,500
|
$ |
2,187,500
|
—
|
$ |
312,500
|
||||||||||
Insurance
Benefits
|
18,604
|
18,604
|
||||||||||||||||
Dale
E. Williams
|
Cash
Severance
|
527,000
|
527,000
|
—
|
187,000
|
|||||||||||||
Insurance
Benefits
|
8,942
|
8,942
|
||||||||||||||||
Matthew
D. Clift
|
Cash
Severance
|
558,000
|
558,000
|
—
|
198,000
|
|||||||||||||
Insurance
Benefits
|
8,055
|
8.055
|
||||||||||||||||
David
Montgomery
|
Cash
Severance
|
689,150
|
689,150
|
—
|
224,537
|
|||||||||||||
Insurance
Benefits
|
1,656
|
1,656
|
||||||||||||||||
Richard
W. Anderson
|
Cash
Severance
|
508,400
|
508,400
|
—
|
180,400
|
|||||||||||||
Insurance
Benefits
|
9,362
|
9,362
|
(1) |
Reflects
cash severance including two (2) years of base salary for Mr. Sarvary and
an additional severance payment equal to a pro rata portion of his base
salary, twelve (12) months of base salary for all other Named Executive
Officers, payable in accordance with the normal payroll practices of the
Company and pro-rata portion of any Performance Bonus/Non-Equity Incentive
compensation with respect to the Bonus Year in which the termination
occurs.
|
(2)
|
Upon
termination by the Company without cause or termination by the employee
for good reason, each Named Executive Officer would be entitled to the
continuation of welfare plans of the Company as detailed in the
“Compensation Discussion and Analysis” for the duration of the officer’s
applicable severance period. The severance period for Mr. Sarvary is two
(2) years and twelve (12) months for all other Named Executive
Officers.
|
||
(3)
|
Upon
termination due to death or disability, each Named Executive Officer would
receive a pro-rata portion of any Performance Bonus that would be payable
with respect to the Bonus Year in which the termination
occurs.
|
•
|
|
We
entered into employment agreements with Mr. Williams in July 2003 and Mr.
Montgomery in September 2003, all prior to the Company’s initial public
offering in December 2003. The terms of these employment
agreements and related stock option agreements were developed based on
negotiations between the applicable executive and the Board of Directors
of the Company at that time, which was controlled by several private
equity investors. These contracts specified the compensation
and other benefits to be paid upon a termination of employment or upon a
change of control as described
above.
|
•
|
|
Mr.
Clift joined the Company in December 2004, Mr. Anderson joined the Company
in July 2006 and Mr. Sarvary joined the Company in June 2008, after the
Company went public. However, the terms of their employment agreements
regarding severance and other payments upon termination of employment and
a change of control were structured similarly to the other Named Executive
Officers. However, we granted restricted stock units to Mr. Clift with his
initial compensation package to offset lost equity compensation from his
previous employer. The terms of Mr. Clift’s employment agreement provide
that these restricted stock units vest immediately if he is terminated
without cause, if his employment ends as a result of death or disability,
or if he resigns for good reason. Mr. Clifts’s restricted stock units
became fully vested on January 1,
2008.
|
•
|
|
In
March 2008, Mr. Williams and the Company amended and restated his
employment agreement to reflect his promotion to Executive Vice President
in 2007. The modifications included extending his severance
period and benefits maintenance period from six (6) to twelve (12) months,
which is consistent with the agreements for the Company’s other Executive
Vice Presidents.
|
•
|
|
Mr.
Sarvary’s initial compensation package as Chief Executive Officer was
determined by our Compensation Committee in connection with the
negotiation of his employment agreement in June 2008. The
Compensation Committee approved the terms of his employment agreement and
his stock option awards as further described in the “Compensation
Discussion & Analysis - Compensation Process”
above.
|
Fees
Earned or
|
Option
|
|||||||||||
Name
|
Paid
in
Cash ($) (1)
|
Awards
($)(6)
|
Total
($)
|
|||||||||
Francis
A. Doyle
|
72,800
|
$
|
49,330
|
(2)
|
$
|
170,776
|
||||||
48,646
|
(3)
|
|||||||||||
John
Heil
|
22,000
|
29,531
|
(2)
|
57,028
|
||||||||
5,497
|
(4)
|
|||||||||||
Peter
K. Hoffman
|
61,800
|
41,499
|
(2)
|
144,224
|
||||||||
40,925
|
(3)
|
|||||||||||
Nancy
F. Koehn
|
56,800
|
38,144
|
(2)
|
152,772
|
||||||||
37,615
|
(3)
|
|||||||||||
20,213
|
(5)
|
|||||||||||
Sir
Paul Judge
|
56,800
|
38,144
|
(2)
|
152,772
|
||||||||
37,615
|
(3)
|
|||||||||||
20,213
|
(5)
|
|||||||||||
Christopher
A. Masto
|
44,000
|
29,531
|
(2)
|
102,653
|
||||||||