Exhibit 10.1

 

AMENDED EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is entered into as of the 22nd day of July, 2008, by
and between SEALY CORPORATION, a Delaware corporation (the “Company”), and
Lawrence J. Rogers (the “Employee”).

 

W I T N E S E T H:

 

WHEREAS, the Company and the Employee (collectively “the Parties”) desire to
enter into this Employment Agreement (the “Agreement”) as hereinafter set forth;

 

NOW, THEREFORE, the Company and Employee agree as follows:

 

1.                                       EMPLOYMENT TERM.

 

(a)                                  During the period specified in Subsection
l(b) hereof (the “Employment Term”), the Company shall employ the Employee, and
the Employee shall serve the Company, as President and Chief Executive Officer,
based on the terms and subject to the conditions set forth herein.

 

(b)                                 The Employment Term shall:

 

(i)                           be for a two (2) year term commencing on the date
of this Agreement, which term may be extended by mutual agreement of the
Parties;

 

(ii)                        provided that the Employment Term may terminate
prior to the date specified above in this Subsection 1(b) as provided in
Section 4 hereof.

 

2.                                       POSITION, DUTIES, AND
RESPONSIBILITIES.  At all times during the Employment Term, the Employee shall:

 

(a)                                  Hold the position of President and Chief
Executive Officer (the “Chief Executive Officer”) reporting to the Board of
Directors of the Company;

 

(b)                                 Have those duties and responsibilities, and
the authority, customarily possessed by the Chief Executive Officer of a major
corporation and such additional duties as may be assigned to the Employee from
time to time by the Board of Directors of the Company (the “Board”) which are
consistent with the position of the Chief Executive Officer of a major
corporation;

 

(c)                                  Adhere to such reasonable written policies
and directives, and such reasonable unwritten policies and directives as are of
common knowledge to executive officers of the Company, as may be promulgated
from time to time by the Board and which are applicable to executive officers of
the Company;

 

(d)                                 Invest in the Company only in accordance
with any insider trading policy of the Company in effect at the time of the
investment; and

 

(e)                                  Devote the Employee’s entire business time,
energy, and talent to the business, and to the furtherance of the purposes and
objectives, of the Company, and neither directly nor indirectly act as an
employee of or render any business, commercial, or professional services to any
other person, firm or organization for compensation, without the prior written
approval of the Board.

 

Nothing in this Agreement shall preclude the Employee from devoting reasonable
periods of time to charitable and community activities or the management of the
Employee’s investment assets, provided such activities do not interfere with the
performance by the Employee of the Employee’s duties hereunder.

 

3.                                       SALARY, BONUS AND BENEFITS.  For
services rendered by the Employee on behalf of the Company during the Employment
Term, the following salary, bonus and benefits shall be provided to the Employee
by the Company:

 

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(a)                                  The Company shall pay to the Employee, in
equal installments, according to the Company’s then current practice for paying
its executive officers in effect from time to during the Employment Term, an
annual base salary at the initial rate of Seven Hundred Thousand Dollars
($700,000).  This salary shall be subject to annual review by the Compensation
Committee of the Board (the “Committee) and may be increased, but not decreased,
to the extent, if any, that the Committee may determine.

 

(b)                                 The Employee shall participate in the Sealy
Corporation Annual Bonus Plan (the “Bonus Plan”) in accordance with the
provisions of that Plan as in effect as of the date of this Agreement.  The
Employee’s Target annual bonus, as established by the Committee under the Bonus
Plan as of the date of this Agreement, is one-hundred percent (100%) (His
“Target Annual Bonus Percentage”) of annual base salary, with a range of zero
percent (0%) to two hundred percent (200%) of annual base salary.

 

(c)                                  The Employee shall be eligible for
participation in such other benefit plans, including, but not limited to, the
Company’s Profit Sharing Plan and Trust, Executive Severance Benefit Plan,
Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term
Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the
Profit Sharing Plan and the 1998 and 2004 Stock Option Plans, as the Board may
adopt from time to time and in which the Company’s executive officers are
eligible to participate.  Such participation shall be subject to the terms and
conditions set forth in the applicable plan documents.  As is more fully set
forth in Section 6 hereof, the Employee shall not be entitled to duplicative
payments under this Agreement and the Executive Severance Benefit Plan.

 

(d)                                 Without limiting the generality of
Subsection 3(c) above, for so long as such coverage shall be available to the
executive officers of the Company, the Employee shall be eligible to participate
in the Company’s Group Term Life Insurance Plan with a death benefit to be
provided at the level of one and one half (1 ½) times annual base salary at
Company expense (up to a maximum of $1 million in coverage), plus extended
coverage with a death benefit to be provided of at least the level in effect on
the date of this Agreement for the Employee under such Plan at the Employee’s
discretion and expense.

 

(e)                                  The Employee shall be entitled to take,
during each calendar year period during the Employment Term, vacation time equal
to four weeks per year.

 

(f)                                    In addition, the Parties do hereby
further confirm that any shares of Class A Common Stock of the Company (“Class A
Shares”), and any options to purchase additional Class A Shares previously
granted to Employee are in addition to, and not in lieu of, any shares or
options which may be granted under any other plan or arrangement of the Company
after the date of this Agreement, and (b) the various stock agreements and stock
option agreements, and any related Stockholder Agreement (the “Stockholder
Agreement”) between the Parties (such agreements being hereinafter referred to
collectively as the “Pre-existing Agreements”), all remain in full force and
effect except as otherwise provided herein.  Notwithstanding the foregoing, to
the extent that any provision contained herein is inconsistent with the terms of
any of the Pre-existing Agreements, the terms of this Agreement shall be
controlling.

 

4.                                       TERMINATION OF EMPLOYMENT.  As
indicated in Subsection 1(b)(ii), the Employment Term may terminate prior to the
date specified in Subsection 1(b)(i) as follows:

 

(a)                                  The Employee’s employment hereunder will
terminate without further notice upon the death of the Employee.

 

(b)                                 The Company may terminate the Employee’s
employment hereunder effective immediately upon giving written notice of such
termination for “Cause”.  For these purposes, “Cause” shall mean the following:

 

(i)                         Commission by the Employee (evidenced by a
conviction or written, voluntary and freely given confession) of a criminal act
constituting a felony;

 

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(ii)                      Commission by the Employee of a material breach or
material default of any of the Employee’s agreements or obligations under any
provision of this Agreement, including, without limitation, the Employee’s
agreements and obligations under Subsections 2(a) through 2(e) and Sections 8
and 9 of this Agreement, which is not cured in all material respects within
thirty (30) days after the Chief Executive Officer or the designee thereof gives
written notice thereof to the Employee; or

 

(iii)                   Commission by the Employee, when carrying out the
Employee’s duties under this Agreement, of acts or the omission of any act,
which both:  (A) constitutes gross negligence or willful misconduct and
(B) results in material economic harm to the Company or has a materially adverse
effect on the Company’s operations, properties or business relationships.

 

(c)                                  The Employee’s employment hereunder may be
terminated by the Company upon the Employee’s disability, if the Employee is
prevented from performing the Employee’s duties hereunder by reason of physical
or mental incapacity for a period of one hundred eighty (180) consecutive days
in any period of two consecutive fiscal years of the Company, but the Employee
shall be entitled to full compensation and benefits hereunder until the close of
such one hundred and eighty (180) day period.

 

(d)                                 The Company may terminate the Employee’s
employment hereunder without Cause at any time upon thirty (30) days written
notice.

 

(e)                                  The Employee may terminate employment
hereunder effective immediately upon giving written notice of such termination
for “Good Reason”, as defined in Subsection 4(g) below.

 

(f)                                    The Employee may terminate employment
hereunder without Good Reason at any time upon thirty (30) days written notice.

 

(g)                                 For purposes of this Agreement, “Good
Reason” means the occurrence of (i) any reduction in either the annual base
salary of the Employee or the Target Annual Bonus Percentage or maximum annual
bonus percentage applicable to the Employee under the Bonus Plan, (ii) any
material reduction in the position, authority or office of the Employee,
(iii) any material reduction in the Employee’s responsibilities or duties for
the Company, (iv) any material adverse change or reduction in the aggregate
“Minimum Benefits,” as hereinafter defined, provided to the Employee as of the
date of this Agreement (provided that any material reduction in such aggregate
Minimum Benefits that is required by law or applies generally to all employees
of the Company shall not constitute “Good Reason” as defined hereunder), (v) any
relocation of the Employee’s principal place of work with the Company to a place
more than twenty-five (25) miles from the geographical center of Greensboro,
North Carolina, (vi) the material breach or material default by the Company of
any of its agreements or obligations under any provision of this Agreement.  As
used in this Subsection 4(g), an “adverse change or material reduction” in the
aggregate Minimum Benefits shall be deemed to result from any reduction or any
series of reductions which, in the aggregate, exceeds five percent (5%) of the
value of such aggregate Minimum Benefits determined as of the date of this
Agreement.  As used in this Subsection 4(g), Minimum Benefits are life
insurance, accidental death, long term disability, short term disability,
medical, dental, and vision benefits and the Company’s expense reimbursement
policy.  The Employee, within ninety (90) days of obtaining notice of Good
Reason, shall give written notice to the Company on or before the date of
termination of employment for Good Reason stating that the Employee is
terminating employment with the Company and specifying in detail the reasons for
such termination.  If the Company does not object to such notice by notifying
the Employee in writing within five (5) days following the date of the

 

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Company’s receipt of the Employee’s notice of termination, the Company shall be
deemed to have agreed that such termination was for Good Reason.  The parties
further agree that “Good Reason” will be deemed to have occurred if the
purchaser, in connection with the sale or transfer of all or substantially all
of the assets of the Company, does not assume this Agreement in accordance with
Section 11 hereof.  If the Employee does not give a written termination notice
to the Company within ninety (90) days of the Employee obtaining notice of such
Good Reason, then such Good Reason shall no longer provide a basis for the
employee’s termination of employment with the Company.

 

5.                                       SEVERANCE COMPENSATION.  If the
Employee’s employment is terminated, the following severance provisions will
apply:

 

(a)                                  If, during the term of this agreement, the
Employee’s employment is terminated by the Company other than for Cause or is
terminated by the Employee for Good Reason, then, for a period of two (2) years
after such termination (“Payment Term”) the Company shall:

 

(i)                         continue to pay the Employee’s annual base salary in
the then prevailing amount and at the times specified in Subsection 3(a) hereof,
or if such annual base salary has decreased during the one year period ending on
the Employee’s termination of employment, at the highest rate in effect during
such one year period;

 

(ii)                      continue the Employee’s participation in the Bonus
Plan as provided in Subsection 3(b) hereof provided that the Company will:

 

(A)                              pay the Employee a prorated bonus under the
Bonus Plan for the partial year period ending on the date of the Employee’s
termination of employment calculated as if the Employee had continued to be
employed for the entire year except that the Employee’s bonus percentage
(calculated at the time and in the manner customary as of the date of this
Agreement, but disregarding the termination of employment of the Employee) shall
be applied to the Employee’s annual base salary payable in accordance with
Subsection 3(a) hereof for the partial year period ending on the Employee’s
termination of employment; and

 

(B)                                thereafter, during the remainder of the
Payment Term, a bonus equal to the Employee’s Target Annual Bonus Percentage,
multiplied by the Employee’s annual base salary in the amount specified in
Subsection 5(a)(i) payable during the year (or portion thereof) for which the
bonus is being calculated; with such amounts being payable when bonuses under
the Bonus Plan are customarily payable, except that the final bonus for the
final partial year during the Payment Term shall be payable with the final
payment of the annual base salary under Subsection 5(a)(i) hereof; and

 

(iii)                   continue in effect the medical and dental coverage, long
and short-term disability protection, and any life insurance protection
(including life insurance protection being paid for by the Employee), being
provided to the Employee immediately prior to the Employee’s termination of
employment, or if any of such benefits have decreased during the one year period
ending on the Employee’s termination of employment, at the highest level in
effect during such one year period as long as the Employee continues to make the
applicable employee contributions in effect during the Payment Term based on the
most senior level contribution rate.

 

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(b)                                 If the Employee’s employment hereunder
terminates due to the Employee’s death, disability, termination by the Company
for Cause or termination by the Employee other than for Good Reason, then no
further compensation or benefits will be provided to the Employee by the Company
under this Agreement following the date of such termination of employment other
than payment of compensation earned to the date of termination of employment but
not yet paid.   As more fully and generally provided in Section 15 hereof, this
Subsection 5(b) shall not be interpreted to deny the Employee any benefits to
which he may be entitled under any plan or arrangement of the Company applicable
to the Employee.  Likewise, this Subsection 5(b) shall not be interpreted to
entitle the Employee to a bonus under the Bonus Plan following his termination
of employment except as provided in the Bonus Plan which requires employment on
the last day of the Company’s taxable year as a condition to receipt of a bonus
thereunder for such year except in the cases of death or disability.

 

(c)                                  Notwithstanding anything contained in this
Agreement to the contrary, other than Section 15 hereof, if the Employee
breaches any of the Employee’s obligations under Section 8 or 9 hereof, no
further severance payments or other benefits will be payable to the Employee
under this Section 5.

 

(d)                                 If the Employee retires from the Company
after July 22, 2010, the Company will pay the Employee a prorated bonus under
the Bonus Plan for the partial year period ending on the date of the Employee’s
retirement from employment calculated as if the Employee had continued to be
employed for the fiscal entire year, except that the Employee’s bonus percentage
(calculated in accordance with the Bonus Plan in the manner customary as of the
date of this Agreement, but disregarding the termination of employment of the
Employee) shall be applied to the portion of the Employee’s annual base salary
payable in accordance with Subsection 3(a) hereof for the partial year period
commencing at the start of the fiscal year in which the Employee retires and
ending on the Employee’s retirement date.

 

6.                                       SEVERANCE PLAN.  It is the intention of
the Parties that this Agreement provide special benefits to the Employee.  If at
any time the Company’s Executive Severance Benefit Plan would provide better
cash severance benefits to the Employee than this Agreement, the Employee may
elect to receive such better cash severance benefits in lieu of the cash
severance benefits provided under Subsections 5(a)(i) and 5(a)(ii), or
Subsection 5(a)(v), of this Agreement, whichever is applicable, while continuing
to receive any other benefits or coverages available under this Agreement.  If
this Agreement would provide better cash severance benefits to the Employee than
the Company’s Executive Severance Benefit Plan, the Employee shall receive the
cash severance benefits under this Agreement, as well as any other benefits or
coverages available under this Agreement.  In such case, the cash severance
benefits under this Agreement shall be in lieu of the cash severance benefits
payable under the Company’s Executive Severance Benefit Plan.

 

7.                                       PLAN AMENDMENTS.  To the extent any
provisions of this Agreement modify the terms of any existing plan, policy or
arrangement affecting the compensation or benefits of the Employee, as
appropriate, (a) such modification as set forth herein shall be deemed an
amendment to such plan, policy or arrangement as to the Employee, and both the
Company and the Employee hereby consent to such amendment, (b) the Company will
appropriately modify such plan, policy or arrangement to correspond to this
Agreement with respect to the Employee, or (c) the Company will provide an
“Alternative Benefit,” as defined in Section 13 hereof, to or on behalf of the
Employee in accordance with the provisions of such Section 13.

 

8.                                       CONFIDENTIAL INFORMATION.  The Employee
agrees that the Employee will not, during the Employment Term or at any time
thereafter, either directly or indirectly, disclose or make known to any other
person, firm, or corporation any confidential information, trade secret or
proprietary information of the Company

 

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that the Employee may acquire in the performance of the Employee’s duties
hereunder (except in good faith in the ordinary course of business for the
Company to a person who will be advised by the Employee to keep such information
confidential) or make use of any of such confidential information except in the
performance of the Employee’s duties or when required to do so by legal process,
by any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) that requires the Employee to divulge, disclose or make accessible such
information.  In the event that the Employee is so ordered, the Employee shall
so advise the Company in order to allow the Company the opportunity to object to
or otherwise resist such order.  Upon the termination of the Employee’s
employment with the Company, the Employee agrees to deliver forthwith to the
Company any and all proprietary literature, documents, correspondence, and other
proprietary materials and records furnished to or acquired by the Employee
during the course of such employment. In the event of a breach or threatened
breach of this Section 8 by the Employee, the Company will be entitled to
preliminary and permanent injunctive relief, without bond or security,
sufficient to enforce the provisions hereof and the Company will be entitled to
pursue such other remedies at law or in equity which it deems appropriate.

 

9.                                       NON-COMPETITION.   In consideration of
this Agreement, the Employee agrees that, during the Employment Term, and for
one year thereafter, the Employee shall not act as a proprietor, investor,
director, officer, employee, substantial stockholder, consultant, or partner in
any mattress retailer which does not sell Sealy products or with any of the
following mattress manufacturing companies or their affiliates: Simmons, Serta,
Spring Air, Kingsdown, Tempurpedic, and Select Comfort. The Employee understands
that the foregoing restrictions may limit the Employee’s ability to engage in
certain business pursuits during the period provided for above, but acknowledges
that the Employee will receive sufficiently higher remuneration and other
benefits from the Company hereunder than the Employee would otherwise receive to
justify such restriction.  The Employee acknowledges that the Employee
understands the effect of the provisions of this Section 9, and that the
Employee has had reasonable time to consider the effect of these provisions, and
that the Employee was encouraged to and had an opportunity to consult an
attorney with respect to these provisions.  The Company and the Employee
consider the restrictions contained in this Section 9 to be reasonable and
necessary.  Nevertheless, if any aspect of these restrictions is found to be
unreasonable or otherwise unenforceable by a court of competent jurisdiction,
the Parties intend for such restrictions to be modified by such court so as to
be reasonable and enforceable and, as so modified by the court, to be fully
enforced.   In the event of a breach or threatened breach of this Section 9 by
the Employee, the Company will be entitled to preliminary and permanent
injunctive relief, without bond or security, sufficient to enforce the
provisions hereof and the Company will be entitled to pursue such other remedies
at law or in equity which it deems appropriate.

 

10.                                 NOTICES.  For purposes of this Agreement,
all communications provided for herein shall be in writing and shall be deemed
to have been duly given when hand delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

 

(a)                                  If the notice is to the Company:

 

Mr. Kenneth Walker

Vice President and General Counsel

Sealy Corporation

One Office Parkway

Trinity, North Carolina 27370

 

(b)                                 If the notice is to the Employee:

 

Mr. Lawrence Rogers

Chief Executive Officer

Sealy Corporation

One Office Parkway

Trinity, North Carolina 27370

 

or to such other address as either party may have furnished to the other in
writing and in accordance herewith; except that notices of change of address
shall be effective only upon receipt.

 

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11.                                 ASSIGNMENT; BINDING EFFECT.  This Agreement
shall be binding upon and inure to the benefit of the parties to this Agreement
and their respective successors, heirs (in the case of the Employee) and
permitted assigns.  No rights or obligations of the Company under this Agreement
may be assigned or transferred by the Company except that such rights or
obligations may be assigned or transferred in connection with the sale or
transfer of all or substantially all of the assets of the Company, provided that
the assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee expressly assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law.  The Company further
agrees that, in the event of a sale or transfer of assets as described in the
preceding sentence, it shall be a condition precedent to the consummation of any
such transaction that the assignee or transferee expressly assumes the
liabilities, obligations and duties of the Company hereunder.  No rights or
obligations of the Employee under this Agreement may be assigned or transferred
by the Employee other than the Employee’s rights to compensation and benefits,
which may be transferred only by will or operation of law, except as provided in
this Section 11.

 

The Employee shall be entitled, to the extent permitted under any applicable
law, to select and change a beneficiary or beneficiaries to receive any
compensation or benefits payable hereunder following the Employee’s death by
giving the Company written notice thereof.  In the absence of such a selection,
any compensation or benefit payable under this Agreement following the death of
the Employee shall be payable to the Employee’s spouse, or if such spouse shall
not survive the Employee, to the Employee’s estate.  In the event of the
Employee’s death or a judicial determination of his incompetence, reference in
this Agreement to the Employee shall be deemed, where appropriate, to refer to
the Employee’s beneficiary, estate or other legal representative.

 

12.                                 INVALID PROVISIONS.  Any provision of this
Agreement that is prohibited or unenforceable shall be ineffective to the
extent, but only to the extent, of such prohibition or unenforceability without
invalidating the remaining portions hereof and such remaining portions of this
Agreement shall continue to be in full force and effect.  In the event that any
provision of this Agreement shall be determined to be invalid or unenforceable,
the Parties will negotiate in good faith to replace such provision with another
provision that will be valid or enforceable and that is as close as practicable
to the provisions held invalid or unenforceable.

 

13.                                 ALTERNATIVE SATISFACTION OF COMPANY’S
OBLIGATIONS.  In the event this Agreement provides for payments or benefits to
or on behalf of the Employee which cannot be provided under the Company’s
benefit plans, policies or arrangements either because such plans, policies or
arrangements no longer exist or no longer provide such benefits or because
provision of such benefits to the Employee would adversely affect the tax
qualified or tax advantaged status of such plans, policies or arrangements for
the Employee or other participants therein, the Company may provide the Employee
with an “Alternative Benefit,” as defined in this Section 13, in lieu thereof. 
The Alternative Benefit is a benefit or payment which places the Employee and
the Employee’s dependents in at least as good of an economic position as if the
benefit promised by this Agreement (a) were provided exactly as called for by
this Agreement, and (b) had the favorable economic, tax and legal
characteristics customary for plans, policies or arrangements of that type. 
Furthermore, if such adverse consequence would affect the Employee or the
Employee’s dependents, the Employee shall have the right to require that the
Company provide such an Alternative Benefit.

 

14.                                 ENTIRE AGREEMENT, MODIFICATION.  Subject to
the provisions of Section 15 hereof, this Agreement contains the entire
agreement between the Parties with respect to the employment of the Employee by
the Company and supersedes all prior and contemporaneous agreements,
representations, and understandings of the Parties, whether oral or written.  No
modification, amendment, or waiver of any of the provisions of this Agreement
shall be effective unless in writing, specifically referring hereto, and signed
by both Parties.

 

15.                                 NON-EXCLUSIVITY OF RIGHTS.  Notwithstanding
the foregoing provisions of Section 14, nothing in this Agreement shall prevent
or limit the Employee’s continuing or future participation in any benefit,
bonus, incentive or other plan, program, policy or practice provided by the
Company for its executive officers, nor shall anything herein limit or otherwise
affect such rights as the Employee has or may have under any stock option,
restricted stock or other agreements with the Company or any of its
subsidiaries.  Amounts which the Employee or the Employee’s dependents or
beneficiaries are otherwise entitled to receive under any such plan, policy,
practice or program shall not be reduced by this Agreement except as provided in
Section 6 hereof with respect to payments under the Executive Severance Benefit
Plan if cash payments of annual base salary are made hereunder.

 

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16.                                 WAIVER OF BREACH.  The failure at any time
to enforce any of the provisions of this Agreement or to require performance by
the other party of any of the provisions of this Agreement shall in no way be
construed to be a waiver of such provisions or to affect either the validity of
this Agreement or any part of this Agreement or the right of either party
thereafter to enforce each and every provision of this Agreement in accordance
with the terms of this Agreement.

 

17.                                 GOVERNING LAW.  This Agreement has been made
in, and shall be governed and construed in accordance with the laws of, the
State of North Carolina.  The Parties agree that this Agreement is not an
“employee benefit plan” or part of an “employee benefit plan” which is subject
to the provisions of the Employee Retirement Income Security Act of 1974, as
amended.

 

18.                                 TAX WITHHOLDING.  The Company may withhold
from any amounts payable under this Agreement such federal, state or local taxes
as shall be required to be withheld pursuant to any applicable law or
regulation.  Where withholding applies to Class A Shares, the Company shall make
cashless withholding available to the Employee.

 

19.                                 EXPENSE OF ENFORCEMENT.  The Company shall
reimburse reasonable attorney fees and expenses incurred by the Employee to
enforce the provisions of this Agreement, even if his claims are not successful,
provided they are not ultimately determined by the court to be frivolous.

 

20.                                 REPRESENTATION.  The Company represents and
warrants that it is fully authorized and empowered to enter into this Agreement
and that the performance of its obligations under this Agreement will not
violate any agreement between it and any other person, firm or organization.

 

21.                                 SUBSIDIARIES AND AFFILIATES. 
Notwithstanding any contrary provision of this Agreement, to the extent it does
not adversely affect the Employee, the Company may provide the compensation and
benefits to which the Employee is entitled hereunder through one or more
subsidiaries or affiliates, including, without limitation, Sealy, Inc.

 

22.                                 NO MITIGATION OR OFFSET.   In the event of
any termination of employment, the Employee shall be under no obligation to seek
other employment.  Amounts due the Employee under this Agreement shall not be
offset by any remuneration attributable to any subsequent employment he may
obtain.

 

23.                                 SOLE REMEDY.  The Parties agree that the
remedies of each against the other for breach of this Agreement shall be limited
to enforcement of this Agreement and recovery of the amounts and remedies
provided for herein.  The Parties, however, further agree that such limitation
shall not prevent either Party from proceeding against the other to recover for
a claim other than under this Agreement.

 

24.                                 ADDITIONAL OPTION EXERCISE RIGHT.  Upon
termination of the Employee’s employment under this agreement, unless the
Employee is terminated by the Company for Cause or unless the employee resigns
while the Company has Cause to terminate such employment, the Employee shall
have an additional period to exercise all of his current and future stock
options from the Company.  Such additional period shall be equal to the shorter
of the two years after termination of employment hereunder and the then
remaining term of such stock option.

 

25.                                 TERMINATION OF PRIOR EMPLOYMENT AGREEMENT. 
This Agreement shall fully replace the prior employment agreement between the
Company and Employee dated August 25, 1997, as well as the amendment dated
January 20, 2000, and that prior agreement and amendment are hereby terminated
and shall have no further force or effect.

 

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IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement as
of the day and year first above written.

 

 

 

SEALY CORPORATION

 

 

 

 

 

By:

 

 

Kenneth L. Walker

 

Senior Vice President, General Counsel

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

Lawrence J. Rogers

 

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