FORM OF TEMPUR-PEDIC INTERNATIONAL INC. AMENDED AND RESTATED 2003 EQUITY INCENTIVE PLAN Stock Option Agreement [Insert EVP]
FORM
OF
TEMPUR-PEDIC
INTERNATIONAL INC.
AMENDED
AND RESTATED 2003 EQUITY INCENTIVE PLAN
[Insert
EVP]
This
Agreement dated as of ________ __, 2008, between Tempur-Pedic International
Inc., a corporation organized under the laws of the State of Delaware (the
“Company”), and
the individual identified below, residing at the address there set out (the
“Optionee”).
1. Grant of
Option. Pursuant and subject to the Company’s Amended and
Restated 2003 Equity
Incentive Plan (as the same may be amended from time to time, the “Plan”), the
Company grants to the
Optionee an option (the “Option”) to purchase
from the Company all or any part
of a total of _____ shares (the “Optioned Shares”) of
the Company’s common stock, par value $0.01 per share (the “Stock”), at a price
of $_____ per share. The Grant Date of this Option is _______ __,
2008.
2. Character of
Option. This Option is not to be treated as an “incentive
stock option” within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended.
3. Duration of
Option. Subject to the following sentence, this Option shall expire at
5:00 p.m. on ten years from the Grant Date. However, if the
Optionee’s employment with the Company and its
Affiliates ends before that date (including because the Optionee’s employer
ceases to be an Affiliate), this Option shall expire on
the earlier date specified in whichever of the following applies:
(a) If the
termination of the Optionee’s employment is on account of the optionee’s death
or disability, the first anniversary of the date the Optionee’s employment ends;
or
(b) If the
termination of the Optionee’s employment is due to any other reason, three (3)
months after the Optionee’s employment ends.
4. Exercise of
Option.
(a) Until
this Option expires, the Optionee may exercise it as to the number of Optioned
Shares identified in the table below, in full or in part, at any time on or
after the applicable exercise date or dates identified in the
table. However, during any period that this Option remains
outstanding after the Optionee’s employment with the Company and its Affiliates
ends, including because the Optionee’s employer ceases to be an Affiliate, the
Optionee may exercise it only to the extent it was exercisable immediately prior
to the end of the Optionee’s employment. The procedure for exercising
this Option is described in Section 7.1(e) of the Plan. The Optionee
may pay the exercise price due on exercise by delivering other shares of Stock
of equivalent Market Value provided the Optionee has owned such shares of Stock
for at least six months.
|
Number
of Shares
in Each Installment
|
Percentage
of
Optioned Shares
|
Initial
Exercise Date
for Shares in
Installment
|
|
________
|
50%
|
_________
__, 20__
|
|
________
|
50%
|
_________
__, 20__
|
(b) In
lieu of the Change of Control provisions of Section 9 (a) - (c) of the Plan, if
(i) a Change of Control occurs and (ii) the Optionee’s employment is terminated
but not For Cause (as defined in the Optionee’s Employment Agreement dated
__________) or if the Optionee resigns for Good Reason (as defined in the
Optionee’s Employment Agreement dated ___________) within twelve (12) months
after the occurrence of a Change of Control, the Optionee’s next installment of
_________ Optioned Shares will Accelerate as of the date of his termination of
employment.
5. Transfer of
Option. Except as provided in Section 6.4 of the Plan, this
Option may
not be transferred except by will or the laws of descent and distribution, and
during the Optionee’s lifetime, only the Optionee may exercise this
Option.
6. Incorporation of Plan
Terms. Except as otherwise provided herein in Section 4(b)
above, this Option is granted
subject to all of the applicable terms and provisions of the Plan, including but
not limited to the limitations on the Company’s obligation to
deliver Optioned Shares upon exercise set forth in Section 10 of the Plan,
“Settlement of Awards”. Capitalized terms used but not defined herein
shall have the meaning assigned under the Plan.
7. Miscellaneous. This
Agreement shall be construed and enforced in accordance with the laws of the
State of Delaware, without regard to the conflict of laws principles thereof,
and shall be binding upon and inure to the benefit of any successor or assign of
the Company and any
executor, administrator, trustee, guardian, or other legal representative of the
Optionee. This Agreement may be executed in one or more counterparts
all of which together shall constitute one instrument.
8. Tax
Consequences. The Company makes no representation or warranty
as to the tax treatment of this Option, including upon the exercise of this
Option or upon the Optionee’s sale or other disposition of the Optioned
Shares. The Optionee should rely on his/her own tax advisors for such
advice.
9. Certain Remedies.
(a) If at any
time within two years after termination of the Optionee’s employment with the
Company and its Affiliates any of the following occur:
(i) the
Optionee unreasonably refuses to comply with lawful requests for cooperation
made by the Company, its board of directors, or its Affiliates;
(ii) the
Optionee accepts employment or a consulting or advisory engagement with any
Competitive Enterprise of the Company or its Affiliates or the Optionee
otherwise engages in competition with the Company or its
Affiliates;
(iii) the
Optionee acts against the interests of the Company and its Affiliates, including
recruiting or employing, or encouraging or assisting the Optionee’s new employer
to recruit or employ an employee of the Company or any Affiliate without the
Company’s written consent;
(iv) the
Optionee fails to protect and safeguard while in his/her possession or control,
or surrender to the Company upon termination of the Optionee’s employment with
the Company or any Affiliate or such earlier time or times as the Company or its
board of directors or any Affiliate may specify, all documents, records, tapes,
disks and other media of every kind and description relating to the business,
present or otherwise, of the Company and its Affiliates and any copies, in whole
or in part thereof, whether or not prepared by the Optionee;
(v) the
Optionee solicits or encourages any person or enterprise with which the Optionee
has had business-related contact, who has been a customer of the Company or any
of its Affiliates, to terminate its relationship with any of them;
or
(vi) the
Optionee breaches any confidentiality obligations the Optionee has to the
Company or an Affiliate, the Optionee fails to comply with the policies and
procedures of the Company or its Affiliates for protecting confidential
information, the Optionee uses confidential information of the Company or its
Affiliates for his/her own benefit or gain, or the Optionee discloses or
otherwise misuses confidential information or materials of the Company or its
Affiliates (except as required by applicable law); then
(1) this
Option shall terminate and be cancelled effective as of the date on which the
Optionee entered into such activity, unless terminated or cancelled sooner by
operation of another term or condition of this Agreement or the
Plan;
(2) any stock
acquired and held by the Optionee pursuant to the exercise of this Option during
the Applicable Period (as defined below) may be repurchased by the Company at a
purchase price of $________ per share; and
(3) any gain
realized by the Optionee from the sale of stock acquired through the exercise of
this Option during the Applicable Period shall be paid by the Optionee to the
Company;
(b) The term
“Applicable
Period” shall
mean the period commencing on the later of the date of this Agreement or the
date which is one year prior to the Optionee’s termination of employment with
the Company or any Affiliate and ending two years from the Optionee’s
termination of employment with the Company or any Affiliate.
(c) The term
“Competitive
Enterprise”
shall mean a business enterprise that engages in, or owns or controls a
significant interest in, any entity that engages in, the manufacture, sale or
distribution of mattresses or pillows or other bedding products or other
products competitive with the Company’s products. Competitive
Enterprise shall include, but not be limited to, the entities set forth on
Appendix A hereto, which may be amended by the Company from time to time upon
notice to the Optionee. At any time the Optionee may request in
writing that the Company make a determination whether a particular enterprise is
a Competitive Enterprise. Such determination will be made within 14
days after the receipt of sufficient information from the Optionee about the
enterprise, and the determination will be valid for a period of 90 days from the
date of determination.
10. Right of Set
Off. By executing this Agreement, the Optionee consents to a
deduction from any amounts the Company or any Affiliate owes the Optionee from
time to time, to the extent of the amounts the Optionee owes the Company under
Section 9 above, provided that this set-off right may not be applied against
wages, salary or other amounts payable to the Optionee to the extent that the
exercise of such set-off right would violate any applicable law. If
the Company does not recover by means of set-off the full amount the Optionee
owes the Company, calculated as set forth above, the Optionee agrees to pay
immediately the unpaid balance to the Company upon the Company’s
demand.
11. Nature of
Remedies.
(a) The
remedies set forth in Sections 9 and 10 above are in addition to any
remedies available to the Company and its Affiliates in any non-competition,
employment, confidentiality or other agreement, and all such rights are
cumulative. The exercise of any rights hereunder or under any such
other agreement shall not constitute an election of remedies.
(b) The
Company shall be entitled to place a legend on any certificate evidencing any
stock acquired upon exercise of this Option referring to the repurchase right
set forth in Section 9(a) above. The Company shall also be
entitled to issue stop transfer instructions to the Company’s stock transfer
agent in the event the Company believes that any event referred to in
Section 9(a) has occurred or is reasonably likely to occur.
In
Witness Whereof, the parties have executed this Agreement as of the date first
above written.
TEMPUR-PEDIC
INTERNATIONAL INC.
|
By:
|
|
Signature of Optionee | |
| Title: | [Name of Optionee] | ||
| Optionee's Address: | |||