H Partners Management, LLC (“H Partners”), the largest shareholder of
Tempur Sealy International, Inc. (NYSE:TPX) with a 10% stake, filed
preliminary proxy materials with the United States Securities and
Exchange Commission. The preliminary proxy materials urge Tempur Sealy
shareholders to use the BLUE proxy card to vote “AGAINST” the
re-election of three directors to the Tempur Sealy Board of Directors at
the 2015 Annual Meeting of Shareholders to be held on May 8, 2015.
The three directors H Partners is urging shareholders to vote “AGAINST”
are:
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Mark Sarvary, President and Chief Executive Officer of Tempur Sealy
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P. Andrews McLane, Chairman of the Board
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Christopher A. Masto, Chairman of the Nominating and Corporate
Governance Committee
“Tempur Sealy has underperformed significantly under CEO Mark Sarvary,
and the Board has refused to hold him accountable,” said Usman Nabi of H
Partners. “Our campaign will act as a referendum on the Board’s many
failures as fiduciaries and will act as a platform for shareholders to
send a clear message that the CEO must be replaced and the Board must be
reconstituted.”
In its preliminary proxy statement, H Partners states that Mr. Sarvary
has caused Tempur Sealy to underperform its self-selected peer group by
140% in the past three years and by 175% in the past five years due to
his repeated execution errors and his failure to meet his own short and
long-term earnings targets. During this time, employees of former
private equity owners TA Associates, Inc. and Friedman Fleischer & Lowe,
LLC have occupied leadership positions on the Board and have refused to
hold Mr. Sarvary accountable for his underperformance.
Per Tempur Sealy’s Bylaws, a director who receives a greater number of
votes “AGAINST” his or her election than votes “for” his or her election
must promptly tender his or her resignation to the Board. The Company’s
director resignation policy allows shareholders to compel the
resignations of Directors Sarvary, McLane and Masto for failing to serve
shareholder interests.
Mr. Nabi continued, “Tempur Sealy possesses all the components of a
successful company – industry-leading products and technologies, highly
recognizable brands, and dedicated employees. We strongly believe Tempur
Sealy can achieve its full potential under a new CEO and a reconstituted
Board.”
About H Partners Management
H Partners Management, LLC is an independent investment firm founded in
2005 based in New York City.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
H Partners Management, LLC, together with the other participants named
herein (collectively, “H Partners”), has made a preliminary filing with
the Securities and Exchange Commission (“SEC”) of a proxy statement and
an accompanying BLUE proxy card to be used to solicit votes against the
election of certain director candidates nominated by Tempur Sealy
International, Inc. (the “Company”) for election at the Company’s 2015
annual meeting of stockholders.
H PARTNERS ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE
AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV.
IN ADDITION, THE PARTICIPANTS IN THE SOLICITATION WILL PROVIDE COPIES OF
THESE MATERIALS WITHOUT CHARGE UPON REQUEST.
The participants in this solicitation are H Partners Management, LLC (“H
Partners Management”), H Partners, LP (“H Partners LP”), H Partners
Capital, LLC (“H Partners Capital”), and Rehan Jaffer. H Partners
Management is the investment manager of H Partners LP, H Offshore Fund
Ltd. (the “Offshore Fund”, and together with H Partners LP, the “Funds”)
and a certain managed account (the “H Partners Account”).
As of the date hereof, H Partners LP directly beneficially owns
3,642,500 shares of Common Stock of the Company (the “Common Stock”). H
Partners Capital, as the general partner of H Partners LP, may be deemed
the beneficial owner of the 3,642,500 shares of Common Stock owned by H
Partners LP. As of the date hereof, the Offshore Fund directly
beneficially owns 1,367,700 shares of Common Stock. As of the date
hereof, 1,064,800 shares of Common Stock were held in the H Partners
Account. H Partners Management, as the investment manager of the Funds
and the H Partners Account, may be deemed the beneficial owner of
6,075,000 shares of Common Stock, which consists of the shares of Common
Stock owned by the Funds and held in the H Partners Account. Mr. Jaffer,
as the managing member of H Partners Management and H Partners Capital,
may be deemed the beneficial owner of 6,075,000 shares of Common Stock,
which consists of the shares of Common Stock owned by the Funds and held
in the H Partners Account.
Copyright Business Wire 2015