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Item 9A. Controls and Procedures

2022-02-22 compared with 2021-02-19 · 58 added, 47 removed, 219 unchanged (32% of the section changed)

9 unchanged sentences

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting as of December 31, 2021 based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

Our evaluation of internal control over financial reporting did not include the internal controls of Dreams, which was acquired in 2021 and is included in the 2021 consolidated financial statements.

Dreams constituted approximately 19% of total assets (inclusive of acquired goodwill and indefinite-lived intangible assets) as of December 31, 2021 and approximately 5% of net sales for the year then ended.

Based on our assessment and those criteria, management believes that we maintained effective internal control over financial reporting as of December 31, 2021.

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Report of Independent Registered Public Accounting Firm

The Stockholders and the Board of Directors of Tempur Sealy International, Inc.

To the Stockholders and Board of Directors of Tempur Sealy International, Inc.

and Subsidiaries

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and Subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

As indicated in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Dreams Topco Limited, which is included in the 2021 consolidated financial statements of the Company and constituted approximately 19% of total assets as of December 31, 2021 and approximately 5% of net sales for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of Dreams Topco Limited.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated February 22, 2022, expressed an unqualified opinion thereon.

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February 22, 2022

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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1—Election of Directors," and "Board of Directors' Meetings, Committees of the Board and Related Matters—Corporate Governance," — "Committees of the Board," —"Policies Governing Director Nominations," —"Board and Committee Independence;

Audit Committee Financial Experts" and "Executive Compensation and Related Information—Delinquent Section 16(a) Reports."

Audit Committee Financial Experts" and "Other Information—Delinquent Section 16(a) Reports."

Information relating to executive officers is incorporated herein by reference from our Proxy Statement under the section entitled "Proposal No.

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For information regarding the material features of each of the above plans see Note 11, "Stock-based Compensation," in our Consolidated Financial Statements included in Part II, ITEM 8 of this Report.

All other information required by this Item is incorporated by reference from the Proxy Statement under the section entitled "Principal Security Ownership and Certain Beneficial Owners."

All other information required by this Item is incorporated by reference from the Proxy Statement under the section entitled "Stock Ownership."

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference from the Proxy Statement under the section entitled "Executive Compensation and Related Information—Certain Relationships and Related Transactions" and "Board of Directors' Meetings, Committees of the Board and Related Matters—Board and Committee Independence;

The information required by this Item is incorporated by reference from the Proxy Statement under the section entitled "Certain Relationships and Related Transactions" and "Board of Directors' Meetings, Committees of the Board and Related Matters—Board and Committee Independence;

Audit Committee Financial Experts."

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included in this Report, which are filed herewith pursuant to ITEM 8:

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID:42)

Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019

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(filed as Exhibit 3.1 to Amendment No.

3 to the Registrant’s registration statement on Form S-1 (File No.

3 to the Registrant’s registration statement on Form S-1 /A (File No.

333-109798) as filed on December 12, 2003).

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(filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K as filed on May 24, 2013).

3.3 S econd Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Tempur Sealy International, I nc.

(filed as Exhibit 3.1 to the R egistrant's Current Report on Form 8-K as filed on May 10 , 2021) .

3.4 Seventh Amended and Restated By-laws of Tempur Sealy International, Inc.

(filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K as filed on February 11, 2019) .

4.1 Second Amended and Restated Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of Tempur Sealy International, Inc.

(filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8A as filed on March 27, 2020).

4.2 Certificate of Elimination of Second Amended and Rest ated Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of Tempur Sealy International, Inc.

( f ile d as Exhibit 3.1 to the Registrant 's Current Rep or t on Form 8-K as filed on September 14, 2020).

4.1 Specimen certificate for shares of common stock (filed as Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K as filed on March 1, 2018).

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4.3 Supplemental Indenture, dated as of October 21, 2019, by and among Tempur Sealy International, Inc., the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, re 5.625% Senior Notes due 2023 (filed as Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q as filed on November 7, 2019).

4.6 Third Supplemental Indenture, dated as of October 14, 2020, by and among Tempur Sealy International, Inc.

, the guarantor party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee re 5.625% Senior Notes due 2023 (filed as Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q as filed on November 5, 2020.

4.4 Third Supplemental Indenture, dated as of October 14, 2020, by and among Tempur Sealy International, Inc., the guarantor party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee re 5.625% Senior Notes due 2023 (filed as Exhibit 4.1 to the Registrant's Quarterly Report on Form 10-Q as filed on November 5, 2020.

4.5 Indenture, dated as of May 24, 2016, among Tempur Sealy International, Inc., the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on May 24, 2016).

4.6 Supplemental Indenture, dated as of October 21, 2019, by and among Tempur Sealy International, Inc., the guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee, re 5.500% Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q as filed on November 7, 2019).

4.9 Third Suppl emental Indenture, date d as of October 14, 2020, by and among Tempur Sealy International, Inc.

, the guarantor party thereto and T he Bank of New York Mellon Trust Company, N.A., as trustee re 5.500% Senior Notes due 2026 (filed as Exhibit 10.1 to the Re gistrant's Q uarterly Report on Form 10-Q as filed on November 5, 2020.

4.10 Description of registered securities (filed as Exhibit 4.6 to the Registrant's Annual Report on Form 10-K as filed on February 24, 2020).

4.11 Rights Agreement, dated as of March 27, 2020, by and between Tempur Sealy International, Inc.

and American Stock Transfer & Trust Company, LLC, as rights agent (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K as filed on March 27, 2020).

4.7 Third Supplemental Indenture, dated as of October 14, 2020, by and among Tempur Sealy International, Inc., the guarantor party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee re 5.500% Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q as filed on November 5, 2020.

4.8 I ndenture, dated as of March 25, 2021, among Tempur Sealy International, Inc., the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (filed as Exhibit 4 .1 to the Registrant’s Current Report on Form 8-K as filed on March 2 5 , 2021).

4.9 Form of 4.00% Senior Notes due 2029 ( included in Exhibit 4.

1 to the Registrant’s Current Report on Form 8-K as filed on March 25, 2021 ) .

4.10 Indenture, dated as of September 24, 2021 among Tempur Sealy International, Inc., the Guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as Trustee (filed as Exhibit 10.1 (but numbered 4.1 ) to the Registrant’s Current Report on Form 8-K as filed on September 24, 2021).

4.11 Form of 3.875% Senior Notes due 2031 ( included in Exhibit 10.

1 (but numbered 4.

1 ) to the Registrant’s Current Report on Form 8-K as filed on September 24, 2021 ).

4.12 Description of R egistered S ecurities.

10.1 Credit Agreement, dated as of April 6, 2016, by and among Tempur Sealy International, Inc., as parent borrower, the several banks and other financial institutions party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed on April 7, 2016) .

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3 dated February 2, 2021, by and among Tempur Sealy International, Inc, as parent borrower, the several banks and other financial institutions party thereto, JPMorgan Chase Bank, N.A., as administrative agent, to the Amended and Restated Credit Amendment Agreement dated as of October 16, 2019, as amended by Amendment No.

1 dated May 13, 2020 and Amendment No 2 dated June 10, 2020 (filed as Exhibit 10.1 to the Registra n t's Current Report on Form 8-K as filed on February 3, 2021 ) .

1 dated May 13, 2020 and Amendment No 2 dated June 10, 2020 (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K as filed on February 3, 2021).

10.8 Amendment No.

4 dated as of May 26, 2021, by and among Tempur Sealy International, Inc., as parent borrower, Tempur-Pedic Management, LLC, as additional borrower, the subsidiary guarantors part y thereto, the several banks and other financial institutions party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K /A as filed on May 27, 2021) .

10.9 Amendment No.

5 dated as of September 21, 2021, by and among Tempur Sealy International, Inc., as parent borrower and Tempur-Pedic Management, LLC, as additional borrower, the several banks and other financial institutions party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K as filed on September 21, 2021) .

10.10 Receivables Sale and Contribution Agreement, dated as of April 12, 2017, between Tempur-Pedic North America, LLC, as seller and contributor, and Tempur Sealy Receivables LLC, as purchaser and contribute (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K as filed on April 18, 2017) .

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5, dated April 12, 2019, to that certain Credit and Security Agreement, dated as of April 12, 2017, among Tempur Sealy Receivables, LLC, as borrower, Tempur Sealy International, Inc., as master servicer and Wells Fargo Bank, National Association, as lender (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q as filed on May 9, 2019).

10.18 Omnibus Amendment No.

2, dated as of April 6, 2021, by and among Tempur Sealy International, Inc., Tempur Sealy Receivables, LLC, Tempur-Pedic North America, LLC, Sealy Mattress Manufacturing Company, LLC, Sumitomo Mitsui Banking Corporation, as lender, and Wells Fargo Bank, National Association, as administrative agent and as lender (filed as Exhibit 10.1 to the Registr ant's Current Report on Form 8-K as filed on April 8 , 2021) .

10.19 Annex A to Omnibus Amendment No.

2 - Amended and Restated Receivables Sale Agreement, dated as of April 6, 2021, by and between Sealy Mattress Manufacturing Company, LLC, as seller, and Tempur-Pedic North America, LLC, as purchaser (filed as Exhibit 10.

2 to the Registrant's Current Report on Form 8-K as filed on April 8 , 2021).

10.20 Annex B to Omnibus Amendment No.

2 - Amended and Restated Receivables Sale and Contribution Agreement, dated as of April 6, 2021, by and between Tempur-Pedic North America, LLC, as seller and contributor, and Tempur Sealy Receivables, LLC, as purchaser and contributee (filed as Exhibit 10.

3 to the Registrant's Current Report on Form 8-K as filed on April 8 , 2021) .

10.21 Annex C to Omnibus Amendment No.

2 - Amended and Restated Credit and Security Agreement, dated as of April 6, 2021, among Tempur Sealy International, Inc., as master servicer, Tempur Sealy Receivables, LLC, as borrower, the Lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent (filed as Exhibit 10.

4 to the Registrant's Current Report on Form 8-K as filed on April 8 , 2021).

10.22 Bond Purchase Agreement, dated October 26, 2005, by and among Tempur World LLC, Tempur Production USA, Inc.

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to H Partners Management, LLC and the other H Partners Group Members listed therein (filed as filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed on March 26, 2018).

Share Purchase Agreement, dated May 26, 2021 among Dreams Topco Limited, Project Dream S.à r.l., the management sellers named therein, Tempur Sealy (UK) Limited and Tempur Sealy International, Inc.

(filed as Exhibit 10.1 to the R e gistra nt's Current Report on Form 8-K /A as filed on May 27, 2021).

10.29 Amended and Restated Non-Employee Director Deferred Compensation Plan (filed as Exhibit 10.15 to the Registrant's Annual Report on Form 10-K as filed on February 13, 2015) .

10.23 2020 Non-Employee Director Compensation Plan (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q as filed on November 5, 2020.

10.24 Tempur Sealy International, Inc.

Amended and Restated 2013 Long-Term Incentive Plan (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed on July 26, 2017) .

10.30 202 1 Amended and Restated Non-Employee Director Compensation Plan (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q as filed on May 6 , 202 1 ) .

10.31 Amended and Restated Tempur-Pedic International Inc.

2003 Equity Incentive Plan (filed as Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No.

001-31922) as filed on March 25, 2009).

10.26 First Amendment to the Amended and Restated 2003 Equity Incentive Plan (filed as Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A (File No.

001-31922) as filed on March 25, 2009) .

2003 Equity Incentive Plan (filed as Appendix B to the Registrant’s Definitive Proxy Statement on Schedule 14A as filed on March 25, 2009).

10.32 First Amendment to the Amended and Restated 2003 Equity Incentive Plan (filed as Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A as filed on March 25, 2009) .

10.33 Tempur-Pedic International, Inc.

2013 Equity Incentive Plan (filed as Appendix A to the Registrant's Definitive Proxy statement on Schedule 14A as filed on April 12, 2013).

10.34 Tempur Sealy International, Inc.

Amended and Restated 2013 Equity Incentive Plan (filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K as filed on May 2, 2017).

10.35 Tempur Sealy International, Inc.

Amended and Restated 2013 Long-Term Incentive Plan (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed on July 26, 2017) .

10.36 Second Amended and Restated Annual Incentive Bonus Plan for Senior Executives (filed as Appendix B to the Registrant’s Definitive Proxy Statement (File No.001-31922) filed on March 16, 2015).

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and Steven Rusing (filed as Exhibit 10.34 to the Registrant’s Annual Report on Form 10-K as filed on February 24, 2020).

10.38 Form of Stock Option Agreement under the Amended and Restated 2003 Equity Incentive Plan (filed as Exhibit 10.4 to the Registrant's Current Report on Form 8-K as filed on February 19, 2010) .

10.39 Form of Stock Option Agreement under the Amended and Restated 2003 Equity Incentive Plan (Director) (filed as Exhibit 10.2 to Registrant’s Quarterly Report on Form 10-Q as filed on July 28, 2010).

10.46 Employment and Non-Competition Agreement effective January 1, 2022, by and between Tempur Sealy International Limited and Hansbart Wijand.

10.47 Form of Stock Option Agreement under the 2013 Equity Incentive Plan (Director) (filed as Exhibit 10.3 to Registrant’s Quarterly Report on Form 10-Q as filed on November 8, 2013).

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10.52 Form of Amendment to Stock Option Agreement (filed as Exhibit 10.47 to the Registrant’s Annual Report on Form 10-K as filed on March 1, 2018) (1)(2)

10.46 Form of 2017 Performance Restricted Stock Unit Award Agreement (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K as filed on August 7, 2017) .

10.47 2017 Performance Restricted Stock Unit Award Agreement dated October 13, 2017 by and between Tempur Sealy International, Inc.

and Bhaskar Rao (filed as Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q as filed on November 9, 2017) .

10.48 2017 Performance Restricted Stock Unit Award Agreement dated September 5, 2017 by and between Tempur Sealy International, Inc.

Clifford Buster, III (filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q as filed on November 9, 2017) .

10.49 Matching Performance Restricted Stock Unit Award Agreement dated as of September 4, 2015 between Tempur Sealy International, Inc.

Thompson (filed as Exhibit 10.4 to Registrant’s Current Report on Form 8-K as filed on September 8, 2015).

10.50 Amendment to Matching Performance Restricted Stock Unit Award Agreement dated as of October 12, 2015, between Tempur Sealy International, Inc.

Thompson (filed as Exhibit 10.1 to Registrant’s Current Report on Form 8-K as filed on October 14, 2015) .

10.51 Form of Matching PRSU Award Agreement under the 2013 Equity Incentive Plan (filed as Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed on February 26, 2016).

10.52 Form of Amendment to Matching PRSU Agreement (filed as Exhibit 10.58 to the Registrant’s Annual Report on Form 10-K as filed on March 1, 2018).

10.53 Restricted Stock Unit Award Agreement dated as of September 4, 2015, between Tempur Sealy International, Inc.

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10.54 Form of Restricted Stock Unit Award Agreement under the 2013 Equity Incentive Plan (filed as Exhibit 10.58 to Registrant's Annual Report on Form 10-K as filed on February 24, 2017).

10.55 Restricted Stock Unit Award Agreement dated October 13, 2017 by and between Tempur Sealy International, Inc.

and Bhaskar Rao (filed as Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q as filed on November 9, 2017) .

10.56 Restricted Stock Unit Award Agreement dated September 5, 2017 by and between Tempur Sealy International, Inc.

Clifford Buster, III (filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q as filed on November 9, 2017) .

10.55 Form of Restricted Stock Unit Award Agreement under the Amended and Restated 2013 Equity Incentive Plan (filed as Exhibit 10.63 to the Registrant's Annual Report on Form 10-K as filed on March 1, 2018) (1)(2)

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10.58 Form of 2020 Restricted Stock Unit Award Agreement under the Amended and Restated 2013 Equity Incentive Plan (filed as Exhibit 10.63 to the Registrant's Annual Report of Form 10-K as filed on February 24, 2020).

10.61 Form of 2020 Performance Restricted Stock Unit Award Agreement under the Amended and Restated 2013 Equity Incentive Plan (filed as Exhibit 10.64 to the Registrant 's Annual Report on Form 10-K as filed on F ebruary 24, 2020 ) .

10.59 Form of 2020 Performance Restricted Stock Unit Award Agreement under the Amended and Restated 2013 Equity Incentive Plan (filed as Exhibit 10.64 to the Registrant's Annual Report on Form 10-K as filed on February 24, 2020).

10.60 Form of 2021 Restricted Stock Unit Award Agreement under the Amended and Restated 2013 Equity Incentive Plan (filed as Exhibit 10.6 3 to the Registrant's Annual Report on Form 10-K as filed on February 19, 2021) .

10.61 Form of 2021 Performance Restricted Stock Unit Award Agreement under the Amended and Restated 2013 Equity Incentive Plan ( filed as Exhibit 10.6 4 to the Registrant's Annual Report on Form 10-K as filed on February 19 , 2021) .

10.62 Form of 202 2 Restricted Stock Unit Award Agreement under the Amended and Restated 2013 Equity Incentive Plan .

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Thompson (filed as Exhibit 10.6 to Registrant’s Current Report on Form 8-K as filed on September 8, 2015) .

10.65 Amended and Restated Sealy Benefit Equalization Plan dated December 18, 2008 (filed as Exhibit 10.44 to Sealy Corporation's Annual Report on Form 10-K as filed on January 15, 2009).

21.1 Subsidiaries of Tempur Sealy International, Inc.

22.0 List of Subsidiary Guarantors

23.1 Consent of Ernst & Young LLP.

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104 The cover page from the Company's Annual Report on Form 10-K for the year ended December 31, 2021, formatted in Inline XBRL.

† Certain portions of this exhibit have been omitted.

† Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

The Company agrees to furnish supplementally an unredacted copy of the exhibit to the Securities and Exchange Commission upon request.

(1) Incorporated by reference.

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DILSAVER Director

/S/ SIMON JOHN DYER Director

Simon John Dyer

GATES Director

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LUTHER Director

/S/ MEREDITH SIEGFRIED MADDEN Director

Meredith Siegfried Madden

/S/ RICHARD W.

RUCHIM Director

/S/ ROBERT B.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures