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:


 

















 


(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 1⁄2) 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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