Exhibit 10.45


 


EXECUTION
COPY


 


SEALY EXECUTIVE


 


SEVERANCE BENEFIT PLAN


 


Original Effective Date:   December 1, 1992


 


Restatement Generally Effective:   December 1, 2008


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
  PRELIMINARY PROVISIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  DEFINITIONS

  	
  3

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  ELIGIBILITY AND PARTICIPATION

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  QUALIFICATION FOR BENEFITS

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  BENEFITS AND PAYMENT OF BENEFITS

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  ADMINISTRATION

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  AMENDMENT AND TERMINATION

  	
  25

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  PARTICIPATING SUBSIDIARIES

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  MISCELLANEOUS

  	
  28

  



 


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AMENDMENT AND RESTATEMENT


OF THE


SEALY EXECUTIVE SEVERANCE BENEFIT PLAN


 


This Amendment and Restatement of the Sealy
Executive Severance Benefit Plan is hereby made by Sealy Corporation, a
corporation organized and existing under and by virtue of the laws of the State
of Delaware (the “Company”).


 


W I T N E S S E T H:


 


WHEREAS, the Company previously established a
severance benefit plan for certain of its executive employees and for certain
executive employees of certain of its Subsidiaries in order to provide for such
executive employees an opportunity to receive certain cash and other benefits
in the event of separation from service, under certain conditions specified
therein;


 


WHEREAS, it is desirable to amend and restate
the Plan in order to comply with the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), to the extent
applicable, and to make other desirable changes to the Plan; and


 


WHEREAS, the Board of Directors of the
Company has approved adoption of such an amendment and restatement of the Plan
by the Company;


 


NOW, THEREFORE, generally effective as of December 1,
2008, the Company hereby adopts an Amendment and Restatement to the Plan as
follows:


 


ii

















 


ARTICLE I




PRELIMINARY
PROVISIONS


 


1.1           Name. 
The name of the Plan as established hereunder is SEALY EXECUTIVE
SEVERANCE BENEFIT PLAN.


 


1.2           Effective Date.  The provisions of the Plan were originally
effective December 1, 1992.


 


1.3           Restatement Date.  Except as otherwise stated herein, the
provisions of the amended and restated Plan shall be December 1,
2008.  Provisions required to be
effective as of an earlier date shall be deemed effective as of such date.


 


1.4           Purpose.  This Plan was established and is hereby
amended and restated in order to provide severance benefits to certain
executive Employees of the Company and its Subsidiaries, under certain conditions
specified in the Plan.


 


1.5           Employee Welfare Benefit Plan.  This Plan is an employee welfare benefit plan
as defined in Section 3(1) of ERISA. 
This Plan shall be administered in accordance with applicable law and
regulations.  Without limiting the
generality of the foregoing, this Plan shall be administered in such a manner,
and benefits hereunder shall be so limited (notwithstanding any apparently
contrary provision of this Plan, specifically including Article V hereof)
that this Plan shall be an employee welfare benefit plan as defined in Section 3(1) of
ERISA and not an employee pension benefit plan as defined in Section 3(2) of
ERISA.


 


1.6           Not a Funded Plan.  It is the intention and purpose of the
Company and its Subsidiaries that this Plan shall be deemed to be “unfunded”
for tax purposes as well as being such a plan as would properly be described as
“unfunded” for purposes of Title I of ERISA.  Notwithstanding any apparently contrary
provision, this Plan shall be interpreted and administered in such a manner
that it will be so deemed and would be so described.


 


1.7           Section 409A Compliance.  It is the intention and purpose of the
Company and its Subsidiaries that this Plan shall be deemed at all relevant
times to be in compliance with Section 


 


1

















 


409A of the Code and lawful guidance thereunder to the extent
applicable.  Notwithstanding any
apparently contrary provision, this Plan shall be interpreted and administered
in such manner, so that it will be so deemed. 
For periods on an after the effective date of Section 409A but
prior to the Restatement Date, the Plan was administered in good faith
compliance with Section 409A of the Code to the extent applicable, but
without a formal compliance amendment for that period, as permitted in
applicable guidance.


 


2

















 


ARTICLE II




DEFINITIONS


 


The use of neuter, masculine and feminine
pronouns shall each be read to include the others and the use of the singular
shall be read to include the plural and vice versa.  Unless the context otherwise indicates, the
following words, when initially capitalized, shall have the following meanings
under this Plan:


 


2.1           Affiliate.  The word “Affiliate” shall mean any corporation
which would be defined as a member of a controlled group of corporations which
includes the Company or any business organization which would be defined as a
trade or business (whether or not incorporated) which is under “common control”
with the Company within the meaning of Sections 414(b) and (c) of the
Code but, in each case, only during the periods any such corporation or
business organization would be so defined.


 


2.2           Annual Base Compensation.  The words “Annual Base Compensation” shall
mean a Participant’s annualized rate of base compensation from the Company or a
Participating Subsidiary in effect on the date of a Participant’s Separation
from Service.  Base compensation shall
not be deemed to be reduced by any salary reduction or deferral contributions
(as described in Sections 401(k), 125 and similar provisions of the Code)
made by the Participant to any employee benefit plan of the Company or any
Participating Subsidiary.  Base
compensation does not include cash bonus payments, stock bonus payments,
performance share payments, overtime pay, incentive pay, Company or Subsidiary
contributions on behalf of a Participant to any retirement or welfare benefit
plan, imputed income reported for tax purposes or any payments in the nature of
expense reimbursements.


 


3

















 


2.3           Breach of Noncompetition Requirement.  The words “Breach of Noncompetition
Requirement” shall mean the occurrence of an event in which a Participant, at
any time prior to his payment in full hereunder:


 


(a)           either while he is employed by the Company
or any Subsidiary or after his Separation from Service; and


 


(b)           without the prior written permission of the
Company;


 


either directly or indirectly operates or performs any advisory or
consulting services for, invests in (other than an investment in publicly
traded stock of a corporation, provided that the ownership of such equity
interest does not give the Participant the right to control or substantially
influence the policy or operational decisions of such corporation), or
otherwise becomes employed by or associated with, in any capacity, a
Competitive Entity.


 


2.4           Cause.  The word “Cause” shall mean for purposes of
this Plan, either:


 


(a)           the Participant’s willful violation of any
written policies of the Company which violations are materially detrimental to
the Company;


 


(b)           the Participant’s conviction of (or written,
voluntary and freely given confession to) a felony involving moral turpitude;


 


(c)           the Participant’s conviction of (or written,
voluntary and freely given confession to) a felony in connection with his
employment;


 


(d)           a Participant’s theft, fraud, embezzlement,
material willful destruction of property (including any operating system of the
Company or any Subsidiary or material disruption of the operations of the
Company or any Subsidiary;


 


(e)           a Participant’s being under the influence of
illegal drugs or habitually under the influence of alcohol while on the job or
on Company or any Subsidiary property;


 


(f)            a Participant’s engaging in conduct, in or
out of the workplace, which has a material adverse effect on the reputation or
business prospects of the Company or one of its Subsidiaries;


 


4

















 


(g)           a Participant’s willfully engaging in
conduct while an employee of the Company or any of its Subsidiaries which
caused the Company or any of its Subsidiaries to be found, in a final judgment
of a court of law, to have a material civil or criminal liability under any
federal or state law;


 


(h)           a Participant’s disclosure of trade secrets,
customer lists or other confidential information if the Company or any
Subsidiary has taken measures designed to prevent such disclosure; or


 


(i)            a Participant’s Breach of the
Noncompetition Requirement.


 


2.5             Change of Control.  For purposes of this Plan, the words “Change
of Control” shall mean a change of control of the Company of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended, as in effect on the Restatement Date (the “Exchange Act”), whether or
not the Company is then subject to such reporting requirements; provided, that,
without limitation, a Change of Control shall be deemed to have occurred if:


 


(a)           any “person” (as defined in Sections 13(d) and
14(d) of the Exchange Act), other than KKR Millennium GP LLC and
affiliates (collectively, “KKR”), becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing twenty percent (20%) or more of the combined voting
power of the Company’s then outstanding securities; provided that a Change of
Control shall not be deemed to occur under this Subsection (a) by reason
of (A) the acquisition of securities by the Company or an employee benefit
plan (or any trust funding such a plan) maintained by the Company, or (B) while
KKR continues to beneficially own more than fifty percent (50%) of the combined
voting power of the Company’s then outstanding securities;


 


(b)           during any period of one (1) year there
shall cease to be a majority of the Board comprised of “Continuing Directors”
as hereinafter defined; or


 


(c)           the stockholders of the Company (A) approve
a merger or consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the 


 


5

















 


surviving entity) more than eighty percent
(80%) of the combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation, or (B) approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of more than
fifty percent (50%) of the Company’s assets.


 


For purposes of this Subsection 2.5(c), a
sale of more than fifty percent (50%) of the Company’s assets includes a sale
of more than fifty percent (50%) of the aggregate value of the assets of the
Company and its Subsidiaries or the sale of stock of one or more of the Company’s
Subsidiaries with an aggregate value in excess of fifty percent (50%) of the
aggregate value of the Company and its Subsidiaries or any combination of
methods by which more than fifty percent(50%) of the aggregate value of the
Company and its Subsidiaries is sold.


 


(d)           For purposes of this Agreement, a “Change of
Control” will be deemed to occur:


 


(i)            on the day on which a twenty percent (20%)
or greater ownership interest described in Subsection 2.5(a) is acquired
(or, if later, the day on which KKR  ceases to
beneficially own more than fifty percent (50%) of the combined voting power of
the Company’s then outstanding securities) provided that a subsequent increase
in such ownership interest after it first equals or exceeds twenty percent
(20%) shall not be deemed a separate Change of Control;


 


(ii)           on the day on which “Continuing Directors,”
as hereinafter defined, cease to be a majority of the Board as described in
Subsection 2.5(b);


 


(iii)          on the day of a merger, consolidation or sale
or disposition of assets as described in Subsection 2.5(c); or


 


(iv)          on the day of the approval of a plan of
complete liquidation as described in Subsection 2.5(c).


 


(e)           For purposes of this Section 2.5, the
word “Company” means Sealy Corporation, and, any other corporation or business
organization in an unbroken chain of corporations or business organization
ending with Sealy Corporation that owns, directly or indirectly, stock
possessing fifty percent (50%) or more of the total combined voting power of
all classes of stock of Sealy Corporation other than KKR.


 


6

















 


(f)            For purposes of this Section 2.5, the
words “Continuing Directors” mean individuals who at the beginning of any
period (not including any period prior to the Restatement Date) of one (1) year
constitute the Board and any new director(s) whose election by the Board
or nomination for election by the Company’s stockholders was approved by a vote
of at least a majority of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved.


 


2.6           Code. 
The word “Code” shall mean the Internal Revenue Code of 1986, as such
may be amended from time to time, and lawful guidance promulgated thereunder.  Whenever a reference is made to a specific
Code Section, such reference shall be deemed to include any successor Code Section having
the same or a similar purpose.


 


2.7           Committee.  The word “Committee” shall mean the Benefit
Appeals Committee constituted under the provisions of Article VI of this
Plan.


 


2.8           Company.  The word “Company” shall mean Sealy
Corporation, a Delaware corporation, and any successor corporation or business
organization which shall assume the duties and obligations of Sealy Corporation
by operation of law or otherwise under this Plan.


 


2.9           Compensation Committee.  The words “Compensation Committee” shall mean
the Compensation Committee of the Board or its successor as determined by the
Board.  If the Compensation Committee has
no successor, the duties of the Compensation Committee shall become duties of
the Board.  The Compensation Committee
shall have such duties with respect to the Plan as shall be determined by the
Board.


 


2.10         Competitive Entity.  The words “Competitive Entity” shall mean any
of the following mattress manufacturing companies in the United States or their
mattress manufacturing or mattress wholesaling affiliates:  Simmons, Serta, Spring Air, Kingsdown, Select
Comfort and Tempur-Pedic or any of their successors or any other mattress
manufacturing company or its 


 


7

















 


mattress manufacturing or mattress wholesaling affiliate which
represents 10% or more of the mattress market in the United States.


 


Notwithstanding anything in this Section to
the contrary, a company, partnership, organization, proprietorship, or other
entity which purchases the stock or assets of a business unit directly from the
Company or any Subsidiary shall not be deemed a Competitive Entity solely with
respect to the products developed, manufactured, prepared, sold, or distributed
by and the individuals employed by such business unit as of the date of such
stock or asset purchase.


 


2.11         Continuous Employment.  The words “Continuous Employment” shall mean
employment for any uninterrupted period during which a Participant is an
Employee of the Company and/or any Subsidiary and shall include any authorized
Leaves of Absence.


 


2.12         Covered Employee.  The words “Covered Employee” shall mean an
Employee of a Participating Subsidiary who:


 


(a)           is employed by the Company or any
Participating Subsidiary in a supervisory, managerial, sales or administrative
job classification, is paid on a salaried or commission basis and is normally
scheduled for thirty-five (35) or more hours of work per week;


 


(b)           is employed in a position with a Salary
Grade of 12 or higher;


 


(c)           is not a member of a collective bargaining
unit;


 


(d)           is not excluded from coverage by this Plan
pursuant to the terms of his employment agreement;


 


(e)           is not a nonresident alien Employee who
receives no earned income (within the meaning of Code Section 911(d)(2))
from a Participant Company or any Affiliate that constitutes income from
sources within the United States (within the meaning of Code Section 861(a)(3)),
except to the extent expressly permitted by this Plan; and


 


(f)            is not employed in a capacity reasonably
categorized by the Company, a Participating Company or an Affiliate as a Leased
Person, regardless of whether his status under the Code subsequently may be
determined by a court, the Internal Revenue Service or other government entity
to be a Covered Employee, an Employee or otherwise.


 


8














 


An Employee shall become a Covered Employee
as of the first day on which he satisfies all of the requirements of
Subsections 2.12 (a) through (f) above.  An Employee shall cease to be a Covered
Employee as of the first day thereafter on which he ceases to satisfy any one
of such requirements.


 


2.13         Dependent.  The word “Dependent” means any person who
properly can be claimed as a dependent on the Participant’s Federal income tax
return or properly could be claimed as a dependent except for the amount of such
dependent’s earnings.


 


2.14         Employee.  The word “Employee” shall mean any common law
employee or Leased Person of a Participating Subsidiary or an Affiliate.  The word “Employee” shall not include any
person who renders service to a Participating Subsidiary or an Affiliate solely
as a director or independent contractor. 
In the event a person renders service to a Participating Subsidiary or
an Affiliate as a common law employee and in another capacity as a director, an
independent contractor or otherwise as a self-employed individual, he shall be
considered to be an Employee hereunder only in his capacity as a common law
employee.


 


In the event a person who was not classified
by a Participating Subsidiary or an Affiliate as a common law employee is
subsequently determined by a court, the Internal Revenue Service or other
governmental entity to be a common law employee, such person shall only be
considered to be an Employee hereunder prospectively from the date of such
determination, or, if later, at the time that such person is initially treated
as an Employee on the payroll records of the Participating Subsidiary or
Affiliate.


 


2.15         Effective Date.  The words “Effective Date” shall mean the
original effective date of this Plan which is December 1, 1992.


 


9

















 


2.16         ERISA. 
The acronym “ERISA” shall mean the Employee Retirement Income Security
Act of 1974, as amended, and lawful guidance promulgated thereunder.  Whenever a reference is made to a specific
ERISA Section, such reference shall be deemed to include any successor ERISA Section having
the same or a similar purpose.


 


2.17         Leased Person.  The words “Leased Person” shall mean, on and
after December 1, 1997, any individual who, pursuant to an agreement between
any Participating Company or Affiliate and any leasing organization, has
performed services for the Participating Company, for an Affiliate or for
related persons, as determined in accordance with Code Section 414(n)(6),
on a substantially full time basis for a period of at least one (1) year;
provided, however, that such services are performed under the primary direction
or control of the Participating Company or the Affiliate.


 


In the event a person who was not classified
by a Participating Company or an Affiliate as a Leased Person is subsequently
determined by a court, the Internal Revenue Service or other governmental
entity to be a Leased Person, such person shall only be considered to be a
Leased Person hereunder prospectively from the date of such determination, or,
if later, at the time that such person is initially treated as a Leased Person
by a Participating Company or an Affiliate.


 


2.18         Leave of Absence.  The words “Leave of Absence” means:


 


(a)                                  that
period of interruption of active employment of an Employee caused by entrance
into the Armed Services of the United States under such circumstances that he
becomes entitled to reemployment rights under the law, such period being deemed
to terminate at the expiration of such reemployment rights;


 


(b)                                 that
period of interruption of active employment of an Employee, without pay,
granted by the Company or any Subsidiary at the Employee’s request with the
understanding that he will return to active employment at the expiration of
such period, provided, that such interruption of active employment (1) does
not exceed six months, and (2) is granted on a nondiscriminatory basis for
a specific reason; and


 


10

















 


(c)                                  a
period of jury duty.


 


2.19         Participant.  The word “Participant” means a Covered
Employee who has satisfied, and continues to satisfy, the eligibility
requirements under the provisions of Section 3.1.  A Participant shall cease to be a Participant
upon his Separation from Service, provided that the mere existence of such a
Separation from Service shall not in any way limit a Participant’s right to
benefits which he shall be entitled to receive hereunder as a result of such
Separation from Service.


 


2.20         Participating Subsidiary.  The words “Participating Subsidiary” means a
Subsidiary whose Employees may become eligible to participate in this Plan if
such Employees otherwise satisfy the requirements of Section 3.1
hereof.  As of the Restatement Date, all
Subsidiaries are Participating Subsidiaries other than any Subsidiary not
organized under the laws of the United States of America or one of the States
thereof.


 


2.21         Plan. 
The word “Plan” shall mean the Sealy Benefit Equalization Plan, as
previously established and amended, as set forth herein, and as it later may be
amended.


 


2.22         Plan Administrator.  The words “Plan Administrator” means Sealy, Inc.,
an Ohio corporation, or such successor as may be appointed by the Board of
Directors of Sealy Corporation pursuant to Article VII hereof.


 


2.23         Plan Year.  The words “Plan Year” means the twelve (12)
month commencing on December 1 and ending on the following November 30.


 


2.24         Salary Grade.  The words “Salary Grade” means the
classification grade for an Employee’s job position.  For purposes of this Plan, Salary Grade shall
be determined utilizing the compensation policy of the Company and its
Subsidiaries as in effect on the Effective Date even if that compensation
policy is no longer in effect at the time of the event resulting in the need to
determine benefits.  If the compensation
policy changes and there is no classification grade for an 


 


11

















 


Employee’s job position under the policy in effect on the Effective
Date, the Plan Administrator shall, on the basis of the job position’s
characteristics, assign it a classification grade for purposes of this Plan.


 


2.25         Separation
from Service.  The words “Separation
from Service” shall mean a “separation from service” as defined for purposes of
Section 409A of the Code for purposes of determining when a distribution
may be made under the terms of a non-qualified deferred compensation plan such
as this Plan.  In general, a Separation
from Service for purposes of this Plan occurs when there is a good faith
severance of the employment relationship between the Company and its Affiliates
and an Employee due to the Employee’s death, retirement or other “termination
of employment” (as that term is defined for purposes of identifying a
Separation from Service for purposes of Section 409A).  Specifically, the following shall apply:


 


(a)                                  An Employee will not
be deemed to have a Separation from Service while on military leave, sick
leave, or other bona fide (i.e., where there is a reasonable expectation that
the Employee will return) leave of absence if the period of such leave does not
exceed six (6) months, or, if longer, so long as Employee retains a right
to reemployment with the Company or an Affiliate by law or contract.  If the leave exceeds six (6) months and
the Employee does not retain such a reemployment right, the Separation from
Service occurs on the first day following such six (6) months.  However, where the leave is due to any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than six (6) months, where such impairment causes the employee to be
unable to perform the duties of his or her position of employment or any
substantially similar position of employment, twenty-nine (29) months will be
substituted for six (6) months for purposes of this Subsection;


 


(b)                                 An Employee will not
be considered to have a Separation from Service merely due to transfer between
employee and independent contractor status (including status as a director of
the Company);


 


(c)                                  Whether a “termination
of employment,” as defined for purposes of the definition of Separation from
Service under Section 409A of the Code, has occurred is determined based
on whether the facts and circumstances indicate that the applicable
Participating Company or Affiliate and the 


 


12

















 


Employee reasonably anticipated that:


 


(i)                                    no
further services would be performed after a certain date; or


 


(ii)                                 that
the level of bona fide services the Employee would perform after such date
(whether as an Employee or independent contractor, including as a director)
would permanently decrease to less than fifty percent (50%) of the average
level of bona fide services provided in the immediately preceding thirty-six
(36) months.


 


2.26         Subsidiary.  The word “Subsidiary” shall mean any
corporation in which the Company owns, directly or indirectly, stock possessing
at least eighty percent (80%) or more of the total combined voting power of all
classes of stock entitled to vote or at least eighty percent (80%) of the total
value of shares of all classes of stock of such corporation, as determined
pursuant to Section 1563(a)(1) of the Code, but only during the
period any such corporation would be so defined.


 


2.27         Voluntary Termination.  The words “Voluntary Termination” shall mean
a Separation from Service upon a Participant’s resignation or retirement from
the employ of the Company and its Subsidiaries. 
Without limiting the generality of the foregoing, a Participant shall be
deemed to have incurred a Voluntary Termination upon a failure to report to
work for three (3) consecutive working days without reasonable excuse.


 


2.28         Weekly Base Compensation.  The words “Weekly Base Compensation” means
Annual Base Compensation divided by fifty-two.


 


2.29         Years of Service.  The words “Years of Service” means the number
of years and portions thereof of Continuous Employment represented by the
period of time commencing on the Participant’s most recent date of hire with
the Company or any Subsidiary and ending on the date of Separation from
Service.


 


13

















 


ARTICLE III


 


ELIGIBILITY AND PARTICIPATION


 


3.1           Eligibility.  Each Employee who, on or after the Restatement
Date:


 


(a)                                  is
a Covered Employee; and


 


(b)                                 has
completed six (6) months of Continuous Employment with the Company or any
Subsidiary, shall be eligible to participate in the Plan.


 


3.2           Participation.  Each Covered Employee who satisfies the
requirements of Section 3.1 on or after the Restatement Date shall
commence participation in the Plan as of the Restatement Date or, if later, as
of the date upon which he first satisfies the aforementioned requirements.  A Participant shall continue to participate
in the Plan as long as he continues to satisfy each and every requirement of Section 3.1
and shall cease to be a Participant immediately upon his failure to satisfy any
of such requirements.  An Employee who
was previously a Participant and ceased to be a Participant, but again
satisfies the requirements of Section 3.1, shall immediately commence
participation in the Plan, except as provided in Section 3.4.


 


3.3           Leave Of Absence.  A Participant shall continue to be a
Participant throughout a Leave of Absence approved by the Company or Subsidiary
by which he is employed.


 


3.4           Rehired Participant.  If a Participant’s employment is terminated
and he is subsequently reemployed by the Company or any Participating
Subsidiary, then subject to any applicable restriction under Section 409A
of the Code, he shall become a Participant upon the completion of six (6) months
of Continuous Employment following such reemployment if he otherwise satisfies
the requirements of Section 3.1; provided, however, that Years of Service
under this Plan shall be counted only from his most recent date of hire.


 


14

















 


ARTICLE IV




QUALIFICATION FOR BENEFITS


 


4.1           Entitlement to Benefits.  A Participant shall be entitled to receive
the benefits specified in Article V hereunder if, at any time on or after
the Restatement Date, such Participant experiences a Separation from Service,
other than a Voluntary Termination, from the Company or any Participating
Subsidiary as a result of:


 


(a)                                  a
permanent reduction in the workforce (the elimination of an employment
position, or a reduction in the number of authorized positions at a plant or
other facility) of the Company or any Participating Subsidiary;


 


(b)                                 the
permanent closing of a plant or other facility of the Company or any
Participating Subsidiary;


 


(c)                                  the
Participant’s inadequate job performance for the Company or a Participating
Subsidiary;


 


(d)                                 a
material reduction in the Annual Base Compensation of a Participant (for
purposes of this Section 4.1(d), and subject to lawful guidance under Section 409A
of the Code, a material reduction will be deemed to have occurred if a
Participant’s Annual Base Compensation is reduced by five percent (5%) or more
in any 12-month period);


 


(e)                                  a
reduction in the Salary Grade of a Participant which would have the effect of
materially reducing such Participant’s benefits hereunder (for purposes of this
Section 4.1(e), and subject to lawful guidance under Section 409A of
the Code, a material reduction in a Participant’s benefits hereunder shall be
deemed to have occurred if a Participant’s number of weeks of benefits is
reduced); or


 


(f)                                    an
involuntary transfer of the Participant’s employment location which reasonably
would necessitate the Participant’s relocation of his personal residence.


 


For the purposes of Section 4.1(d), (e) and (f), the
Participant shall be deemed to have incurred a Separation from Service, other
than a Voluntary Termination, only if he shall (x) notify the Company or
Participating Subsidiary of his intent to terminate his employment within
thirty (30) days of the existence of the condition and (y) allow the
Company or Participating 


 


15

















 


Subsidiary thirty (30) days to cure the condition and (z) if no
such cure is made, resign his position with the Company or Participating
Subsidiary within the thirty (30) day period next following the end of the
Company’s or Participating Subsidiary’s thirty (30) day cure period.  Subject to the provisions of Section 409A
of the Code, a condition will not be deemed to exist until the later of the
actual existence of the condition or the Participant gaining actual knowledge
of the existence.


 


Notwithstanding the foregoing, the
Participant shall not be so entitled to benefits in the event that:


 


(1)                                  such
Separation from Service is for Cause; or


 


(2)                                  a
permanent reduction in the workforce or permanent closing of a plant or other
facility is effected in connection with the sale of all or a portion of the
Company’s or Participating Subsidiary’s business (or a corporate reorganization
of the Company or Participating Subsidiary) if the Participant is within thirty
(30) days thereafter employed, or offered employment (if the offered employment
is at an annual rate of compensation not less than the Participant’s Annual
Base Compensation and if such offered employment does not reasonably
necessitate the Participant’s relocation of his personal residence), by a
successor enterprise; or


 


(3)                                  the
Participant terminates employment prior to the termination date established by
the Company or Participating Subsidiary in connection with a reduction in force
or plant closing.


 


4.2           Source of Payments.  The benefits under this Plan shall be paid as
needed directly from the general assets of the Company or any Subsidiary as the
Company shall direct.  This Plan is an
unfunded employee welfare benefit plan, and nothing herein shall be interpreted
to require prefunding by the Company or any Subsidiary of the cost of benefits.


 


16

















 


ARTICLE V


 


BENEFITS AND PAYMENT OF BENEFITS


 


5.1           Benefits.  A Participant who has become entitled to
benefits as a result of an event specified in Section 4.1 shall receive
the following benefits:


 


(a)                                  Cash
Severance Pay.  Such Participant
shall receive cash severance pay in an amount determined by multiplying his
Weekly Base Compensation by a factor, based upon his Salary Grade and Years of
Service, as set forth herein and subject to the minimum and maximum benefit as
follows:


 


	
   

  	
  Salary

  Grade

  	
   

  	
  Factor

  	
   

  	
  Minimum

  	
   

  	
  Maximum

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12-13

  	
   

  	
  Years of
  Service times 3

  	
   

  	
  13 weeks

  	
   

  	
  26 weeks

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  14-17

  	
   

  	
  Years of
  Service times 6.5 for the first 4 Years of Service, 4 times Years of Service
  thereafter

  	
   

  	
  26 weeks

  	
   

  	
  52 weeks

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  18-20

  	
   

  	
  Years of
  Service times 8.75 for the first 4 Years of Service, 4 times Years of Service
  thereafter

  	
   

  	
  35 weeks

  	
   

  	
  70 weeks

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  21 or higher

  	
   

  	
  Years of
  Service times 13 for the first 4 Years of Service, 4 times Years of Service
  thereafter

  	
   

  	
  52 weeks

  	
   

  	
  104 weeks

  	
   

  



 


(b)           Health and Dental
Benefit.  Such Participant shall
receive health and dental benefit coverage for himself and his Dependents, if
any, for the period of six months immediately following his Separation from
Service  under the health benefit plan of
the Company or Subsidiary then in effect for such Participant, such coverage to
be provided on the same terms and conditions applicable to active employees (as
the same may be amended from time to time and subject to any legal limitations,
such as are contained in Section 125 of the Code) in effect for such
Participant on the day before the event specified in Section 4.1;
provided, however, that such coverage shall be counted toward the period of
continuation of coverage under the group health plan continuation coverage
provisions of ERISA 


 


17

















 


and the Code; provided further, that such
coverage shall end immediately upon a Participant ceasing to be eligible for
such continuation coverage.


 


(c)           Group Term Life
Insurance Benefit.  Such Participant
and his Dependents, if any, shall receive, for the period of six months
immediately following his Separation from Service under the group term life
insurance plan of the Company or any Subsidiary then in effect for such
Participant, group term life insurance and supplemental and Dependent group
term life insurance upon the same terms, coverage amounts and conditions
(subject to any legal limitations, such as are contained in Section 125 of
the Code) in effect for such Participant on the day before the event specified
in Section 4.1; provided, however, that such coverage shall end
immediately upon a Participant becoming eligible for coverage under any
employer group term life insurance plan as a result of any subsequent
employment.


 


5.2           Welfare Plan; Limitations On Severance
Benefit.  The maximum amount of the
cash severance pay specified in Section 5.1(a) to which a Participant
may otherwise be entitled, and the maximum period over which such payment may
be made, shall be limited to the maximum amount and period, respectively,
permitted under Department of Labor Regulations Section 2510.3-2(b) so
that this Plan will not be considered a “Pension Plan” under such regulations.


 


5.3           Segmentation of Severance Benefit.  For purposes of compliance with Section 409A
of the Code, payments and benefits under this Plan (but only to the extent
taxable) shall be divided into four (4) segments as follows:


 


(a)           Cash Severance.  Effective for Plan Years commencing December 1,
2008, when included with any other amounts payable upon an “involuntary
separation of service” (as defined in Treas. Reg. 1.409A-1(n)) that would be
aggregated with such payment under Treas. Reg. 1.409A-1(b)(9)(iii), the Cash
Severance Segment shall not exceed two (2) times the lesser of:


 


(i)            the
sum of the Participant’s annualized compensation based upon the Participant’s
annual rate of pay for services provided to the Company or any Subsidiary for
the calendar year preceding the calendar year in which the Separation from
Service occurred (adjusted for any increase during such year that was expected
to continue indefinitely if the Participant had not had a Separation from
Service); or


 


18














 


(ii)           the maximum amount that
may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code for the year in which the Participant has a Separation from
Service,


 


and shall be
paid in full not later than the last day of the second (2nd) year following the year in
which the Participant had the Separation from Service;


 


(b)           Deferred
Compensation.  The amount of cash
severance pay in excess of the amount described in Subsection (a) shall be
considered the Deferred Compensation Segment;


 


(c)           Health
Benefits.  The medical and dental
benefits provided under Subsection 5.1(b) shall be the considered the
Health Benefit Segment and, as such, shall not be considered nonqualified
deferred compensation; and


 


(d)           Other
Benefits.  To the extent not
otherwise excluded, group term life insurance provided pursuant to Subsection
5.1(c) (and medical and dental benefits if the status described in
Subsection 5.3(c) is not available) shall be considered the Other Segment
and shall be excluded from the definition of nonqualified deferred compensation
as a reimbursement or in-kind benefit payable for a limited period of time or a
limited payment pursuant to Treas. Reg. 1.409A-1(b)(9)(v)(A) or (D) respectively,
but if not so deemed shall be administered to comply with the provisions of
Treas. Reg. 1.409A-3(i)(iv) with benefits provided as if the Participant
were an Employee.


 


5.4           Payment of Cash
Severance Pay.  Payment of the cash
severance pay specified in Section 5.1(a), as reduced pursuant to Section 5.2,
shall commence to be made within thirty (30) days following the determination
by the Plan Administrator, in accordance with Section 6.1, that the
Participant is entitled to benefits. 
Such payments shall be subject to the following rules:


 


(a)           Payments shall be made
on a semi-monthly basis;


 


(b)           Payments
shall continue, unless benefits are forfeited as provided elsewhere in this
Plan, for a number of semi-monthly payments equal to the Participant’s number
of weeks of cash severance pay (as determined pursuant to Section 5.1(a) hereof)
divided by two and fifteen-hundredths (2.15), with any fractional quotient
rounded up to the next greater integer;


 


(c)           Each
semi-monthly payment shall be equal, unless benefits are further reduced or
forfeited as provided elsewhere in this Plan, to his total cash severance pay
specified in Section 5.1(a), as reduced pursuant to Section 5.2,
divided by the number of payments determined pursuant to Section 5.3(b) above;
and


 


19

















 


(d)           Payments
shall be subject to all applicable tax withholding and authorized deductions.


 


For purposes
of this Plan, and in accordance with Treasury Regulation Section 1.409A-2(b)(2)(iii),
each semi-monthly payment is to be treated as one in a series of separate
payments.


 


5.5           Mitigation of Cash
Severance Payments.  The following
mitigation provisions shall apply to:


 


(a)           The
Cash Severance Segment of the Participant’s cash severance pay; and


 


(b)           The
Deferred Compensation Segment of the Participant’s cash severance pay to the
extent such mitigation provisions are permitted under Section 409A of the
Code to apply to such Deferred Compensation Segment.


 


If a
Participant becomes employed by an employer other than the Company or any
Affiliate, as an employee, consultant or other independent contractor, or
otherwise, prior to the completion of the payments described above in this Section 5.4
then his periodic cash severance benefits hereunder shall be forfeited to the
extent of his base compensation (calculated in a manner substantially similar
to the method described herein for calculating Annual Base Compensation) for
the corresponding period from his new employer. 
Such a Participant shall notify the Plan Administrator within thirty
(30) days of any such employment, of his base compensation from such employment
and of any changes thereto.  Failure to
notify the Plan Administrator within thirty (30) days of such employment,
compensation or changes shall result in forfeiture of all benefits hereunder
following the date of such employment or change of compensation, respectively,
and the Plan Administrator may recover amounts paid following such date of
employment or change of compensation plus the costs of such recovery.


 


If a
Participant becomes employed by the Company or any Affiliate, as an Employee,
consultant or other independent contractor, Leased Person or otherwise, prior
to the completion of the payments described above in this Section 5.4,
then his periodic cash severance benefits hereunder shall be forfeited upon the
commencement of such employment.   Such a



 


20

















 


Participant shall have the same
obligation to notify the Plan Administrator of such employment as a Participant
hired by an unrelated employer as described above in this Section 5.4; and
the Plan Administrator shall have the same remedies as described above for
breach of such obligation.  Such an
individual may again become a Participant in this Plan following such
employment upon satisfaction of the eligibility requirements contained in Article III
hereof but the forfeiture of benefits shall be permanent.


 


5.6           Recipient Of Cash
Severance Benefit Payments.  Cash
severance payments specified in Section 5.1(a) shall be made to the
Participant or his duly designated representative or guardian.  In the event a Participant dies before being
paid his total cash severance benefit, the remaining benefit shall be paid to
his estate in a single cash lump sum on a date selected by the Plan
Administrator within the ninety (90) day period beginning on the date which is
thirty (30) days following the date of the Participant’s death.


 


5.7           Distributions Subject to 409A.  If the payment of any distribution or
provision of medical, dental or life insurance coverage within six (6) months
following the date of the Participant’s Separation from Service would cause all
or any portion of such distribution or provision to be subject to inclusion in
the Participant’s gross income for federal income tax purposes under Section 409A(a)(1)(A) of
the Code, then the payment of any such amount or such provision shall be
delayed until the first business day after such six (6) month period (or,
if earlier, the date which is thirty (30) days after the date of the
Participant’s death).  Without limiting
the generality of the foregoing, the six (6) month delay would apply to
the Deferred Compensation Segment of benefits under the Plan as described in Section 5.3
hereof.  Following such six (6) month
delay, payment of delayed amounts shall be made in a single sum payment on the
first business day following such six (6) month period and any remaining
payments will be made as previously scheduled. 
If provision of medical, dental or life insurance coverage must be
delayed, the Employee shall be required to pay all relevant costs and premiums
and shall be reimbursed on the first business day after the six (6) month
delay if permitted by law.


 


21

















 


ARTICLE VI


 


ADMINISTRATION


 


6.1           Appointment of Plan
Administrator.  The Plan
Administrator shall be appointed by the Board of Directors of the Company, and
may be removed or may resign upon thirty (30) days’ written notice, or such
lesser period of notice as is mutually agreeable.  In the absence of another designation, Sealy, Inc.,
an Ohio corporation, shall be the Plan Administrator.


 


6.2           Powers and Duties of
the Plan Administrator.  Except as
expressly otherwise set forth herein, the Plan Administrator shall be a named
fiduciary of the Plan and shall have the authority and responsibility granted
or imposed on a “plan administrator” by ERISA. 
The Plan Administrator shall be the agent for service of legal process
and presentation of claims for benefits hereunder.  The Plan Administrator shall determine any
and all questions of fact, resolve all questions of interpretation of this Plan
or related documents which may arise under any of the provisions of this Plan
or such documents as to which no other provision for determination is made
hereunder, and exercise all other powers and discretions necessary to be
exercised under the terms of this Plan which it is herein given or for which no
contrary provision is made.  Subject to
the provisions of any claims procedure hereunder, the Plan Administrator’s
decision with respect to any matter shall be final and binding on all parties
concerned, and neither the Plan Administrator nor any of its directors,
officers, employees or delegates nor, where applicable, the directors, officers
or employees of any delegate, shall be liable in that regard except for gross
abuse of the discretion given it and them under the terms of this Plan.  The Plan Administrator may, from time to
time, by action of its appropriate officers, delegate to designated persons or
entities the right to exercise any of its powers or the obligation to carry out
any or all of its duties as Plan Administrator.


 


6.3           Engagement of
Advisors.  The Plan Administrator may
employ actuaries, attorneys, accountants, brokers, employee benefit
consultants, and other specialists to render advice 


 


22

















 


concerning any responsibility
the Plan Administrator or Committee has under this Plan.  Such persons may also be advisors to the
Company or any Subsidiary.


 


6.4           Payment of Costs and
Expenses.  The costs and expenses
incurred in the administration of the Plan shall be paid directly by the
Company or one or more of the Subsidiaries, as directed by the Company.  Such costs and expenses include those
incident to the performance of the responsibilities of the Plan Administrator
or Committee, including but not limited to, fees of accountants, legal counsel
and other specialists, and other costs of administering this Plan.  Notwithstanding the foregoing, in no event
will any person serving in the capacity of Plan Administrator, or Committee
member who is a full-time employee of the Company or an Affiliate be entitled
to any compensation for such services.


 


6.5           Claims Procedure.  The Plan Administrator shall establish and
maintain a claims procedure under the Plan and shall establish and appoint the
members of a Benefit Appeals Committee with appropriate powers in connection
therewith.


 


6.6           Limitation of
Liability.  Except as otherwise
provided in ERISA, the Plan Administrator and the Committee, and their
respective officers, employees and members, and directors, officers and
employees of the Company, the Participating Subsidiaries and Affiliates, shall
incur no personal liability of any nature whatsoever in connection with any act
done or omitted to be done in the administration of this Plan. No person shall
be liable for the act of any other person.


 


23

















 


ARTICLE VII


 


AMENDMENT AND TERMINATION


 


7.1           Amendment Power.  The Company reserves the right (without the
consent of any Participating Subsidiary, Participant or other person) to amend
this Plan at any time, or from time to time, as evidenced by an instrument in
writing executed in the name of the Company by one (1) or more of its
officers who have the authority to do so. 
Any such amendment may be made retroactively effective and shall be
binding upon the Participants, except that no such amendment shall
retroactively deprive a Participant of a benefit hereunder.


 


7.2           Termination.  The Company reserves the right (without the
consent of any Participating Subsidiary, Participant or other person) to
terminate this Plan at any time as evidenced by an instrument in writing
executed in the name of the Company by three (3) or more of its officers
who have the authority to do so provided such termination shall not be
retroactive.


 


7.3           Result of
Termination.  If the employment of an
Employee terminates, whether voluntarily or involuntarily, after the effective
date of the Plan termination, he shall not be eligible to receive any severance
benefits under this Plan.


 


7.4           Restrictions on
Amendment and Termination. 
Notwithstanding any contrary provision of this Plan, no amendment or
termination of this Plan shall be effective to:


 


(a)           restrict eligibility to
participate in this Plan;


 


(b)           restrict eligibility
for benefits under this Plan;


 


(c)           reduce benefit levels
under this Plan; or


 


(d)           otherwise curtail
benefits under this Plan,


 


without a written notice to
substantially all of the affected Participants, who are employed by the Company
or a Participating Subsidiary on the date of such notice, at least one year
prior to the effective date of such amendment or termination, except for any
amendment necessary to comply with ERISA or other applicable law.


 


24

















 


7.5           No Liability for
Plan Amendment or Termination. 
Neither the Company, nor any Participating Subsidiary, nor any officer,
Employee or director thereof shall have any liability because this Plan is
amended or terminated.  Without limiting
the generality of the foregoing, none of the foregoing shall have any liability
due to the Company terminating this Plan notwithstanding the fact that a
Participant may have expected to have benefited from the Plan in a future
Separation from Service had this Plan remained in effect without change until
such time.


 


25

















 


ARTICLE VIII


 


PARTICIPATING SUBSIDIARIES


 


8.1           Initial Participating Subsidiaries.  The initial Participating Subsidiaries were
defined as of the Effective Date.


 


8.2           Designation of Participating Subsidiaries.  A Subsidiary of the Company will become a
Participating Subsidiary under this Plan as of the date it becomes a
Subsidiary.  Such a Subsidiary’s status
as a Participating Subsidiary may be reflected by an amendment to Section 9.1
hereof which specifies the name of the Subsidiary and its adoption date, but
such an amendment shall not be required in order for the Subsidiary to be a
Participating Company.  Any such
amendment need only be executed by the Subsidiary.


 


8.3           Adoption of Supplements.  The Company may determine that special
provisions shall be applicable to some or all of the Employees of a
Participating Subsidiary, either in addition to or in lieu of the provisions of
this Plan, or may determine that certain Employees otherwise eligible to
participate in this Plan shall not be eligible to participate in this
Plan.  In such event, the Company shall
adopt a Supplement with respect to the Participating Subsidiary which employs
such individuals which Supplement shall specify the Employees of the
Participating Subsidiary covered thereby and the special provisions applicable
to such Employees.  Any Supplement shall
be deemed to be a part of this Plan solely with respect to the Employees
specified therein.


 


8.4           Amendment of Supplements.  The Company, from time to time, may amend,
modify or terminate any Supplement; provided, however, that any such amendment
or termination shall be subject to the Plan’s general rules with respect
to amendment or termination of the Plan.


 


8.5           Termination of Participation of
Participating Company.  The Company
may terminate the status of a Subsidiary as a Participating Subsidiary or such
status may be terminated by events, as when a Participating Subsidiary ceases
to be a Subsidiary.  Termination of
Participating Subsidiary status by the Company shall be subject to the Plans
general rules with respect to amendment or termination of the Plan.


 


26

















 


8.6           Delegation of Authority.  The Company is hereby fully empowered to act
on behalf of itself and the other Participating Subsidiaries as it may deem
appropriate in maintaining the Plan. 
Without limiting the generality of the foregoing, such actions include
obtaining and retaining the status of the Plan as described in Article 1
of the Plan and appointing attorneys-in-fact in pursuit thereof.  Furthermore, the adoption by the Company of
any amendment to the Plan or the termination thereof, will constitute and
represent, without any further action on the part of any Participating
Subsidiary, the approval, adoption, ratification or confirmation by each
Participating Subsidiary of any such amendment or termination.  In addition, the appointment of or removal by
the Company of any member of the Benefit Appeals Committee, any Plan
Administrator or other person under the Plan shall constitute and represent,
without any further action on the part of any Participating Subsidiary, the
appointment or removal by each Participating Subsidiary of such person.


 


27














 


ARTICLE IX


 


MISCELLANEOUS


 


9.1           Exclusive Benefit.  This Plan has been adopted for the exclusive
benefit of the eligible Participants. 
Nothing herein contained shall be construed as giving to any Employee or
any other person any legal or equitable right against the Company or any
Affiliate unless such right shall exist by reason of the express provisions of
this Plan or any action taken pursuant thereto and in compliance therewith.


 


9.2           Right of Discharge
Reserved.  Neither the establishment
of the Plan nor anything herein contained shall be construed to confer upon any
persons the right to be continued in the employ of the Company or any
Subsidiary or to be employed in any particular position therewith nor shall it
in any way affect the right of the Company or any Subsidiary to control its
Employees and to terminate the service of any Employee at any time, for any
reason and with or without notice.


 


9.3           Right of Set Off.  To the extent allowable under applicable law,
in the event that any amount is distributable to a Participant under this Plan
and the Participant owes any amount to the Company or any Subsidiary for any
reason, including, but not limited to, possible embezzlement that can only be
proven through accounting evidence, the Plan Administrator may, in its sole
discretion, deduct from the amount distributable to the Participant an amount
equal to the amount owed to the Company or any Subsidiary.  As of the Restatement Date, such right of set
off shall apply to the Cash Severance Segment as defined in Section 5.3
but shall apply to the Deferred Compensation Segment, as defined in that
Section, only in an amount not to exceed Five Thousand Dollars ($5,000.00).


 


9.4           No Liability.  No liability shall be incurred by the Company
or any Affiliate beyond the specific provisions of this Plan.


 


9.5           Satisfaction of
Claims.  Any payment to any
participant, or to his legal representative in accordance with the provisions
of this Plan shall to the extent thereof be in full 


 


28

















 


satisfaction of all claims
hereunder against the Plan Administrator and the Company or any Affiliate, and
the Plan Administrator may require such participant or legal representative as
a condition precedent to such payment, to execute a receipt and release
therefor in such form as shall be determined by the Plan Administrator.


 


9.6           Construction.  The Plan shall be construed in accordance
with, and governed by, ERISA in a manner which will assure compliance of the
Plan’s operation therewith and, to the extent applicable, the laws of the State
of Delaware without respect to conflict of law provisions thereof.


 


9.7           Impossibility.  In the event that it becomes impossible for
the Company, Subsidiary, Committee or Plan Administrator to perform any act
under this Plan, that act shall be performed which, in the judgment of the
Company, Subsidiary, Committee, or Plan Administrator, as the case may be, will
most nearly carry out the intent and purpose of this Plan.


 


9.8           No Assignment.  Except as set forth herein, no rights of any
kind under this Plan shall, without the written consent of the Plan
Administrator, be transferable, assignable or encumberable (including as
collateral or a pledge on any loan) by a Participant or any other person.


 


9.9           Notice.  In the event that the Plan Administrator or
the Committee shall be required under the Plan to notify any Participant of any
occurrence or action taken under the Plan, such notice requirement shall be
satisfied by mailing to the Participant a written notice of such occurrence or
action addressed to the Participant at the last address on file with the
Company, or by delivering such written notice to the Participant at such
address.


 


9.10         Multiple Fiduciary
Capacities.  A person may serve in
more than one fiduciary capacity hereunder.


 


9.11         Tax Withholding.  The Company or any other Participating
Company may withhold from a Participant’s Compensation or any payment made by
it under this Plan such amount or amounts as may be required for purposes of
complying with the tax withholding or other provisions 


 


29

















 


of the Code or the Social Security Act or any
state or local income or employment tax act or for purposes of paying any
estate, inheritance or other tax attributable to any amounts payable hereunder.


 


9.12         Incapacity.  If the Plan Administrator determines that any
Participant or beneficiary entitled to payments under this Plan is incompetent
by reason of physical or mental incapacity disability and is consequently
unable to give a valid receipt for payments made hereunder, or is a minor, the
Plan Administrator may order the payments becoming due to such person to be
made to another person for his benefit, without responsibility on the part of
the Plan Administrator to follow the application of amounts so paid.  Payments made pursuant to this Section shall
completely discharge the Plan Administrator, the Company and the other
Participating Companies and the Benefit Appeals Committee with respect to such
payments.


 


9.13         Administrative Forms.  All applications, elections and designations
in connection with this Plan made by a Participant or beneficiary shall become
effective only when received by the Plan Administrator in a form acceptable to
the Plan Administrator.


 


9.14         Independence of Plan.  Except as otherwise expressly provided
herein, this Plan shall be independent of, and in addition to, any other
benefit agreement or plan of a Participating Company or any rights that may
exist from time to time thereunder.


 


9.15         Responsibility for Legal Effect.  Neither the Company, nor any other
Participating Company, nor the Plan Administrator or the Benefit Appeals
Committee, nor any officer, member, delegate or agent of any of them, makes any
representations or warranties, express or implied, or assumes any
responsibility concerning the legal, tax, or other implications or effects of
this Plan.  Without limiting the
generality of the foregoing, no Participating Company shall have any liability
for the tax liability which a Participant may incur resulting from
participation in this Plan or the accrual or payment of benefits hereunder.


 


9.16         Successors.  The terms and conditions of this Plan shall
inure to the benefit of and bind the Company, the other Participating Companies
and Affiliates, their respective successors and


 


30

















 


assigns, and the Participants, their
beneficiaries, and the personal representatives of the Participants and their
beneficiaries.


 


9.17         Execution in Counterparts.  This Plan may be executed in any number of
counterparts each of which shall be deemed an original and said counterparts
shall constitute but one and the same instrument and may be sufficiently
evidenced by any one counterpart.


 


9.18         Severability.  In the event that any provision or term of
this Plan, or any agreement or instrument required by the Plan Administrator
hereunder, is determined by a judicial, quasi-judicial or administrative body
of competent jurisdiction to be void or not enforceable for any reason, all
other provisions or terms of this Plan or such agreement or instrument shall
remain in full force and effect and shall be enforceable as if such void or
nonenforceable provision or term had never been a part of this Plan, or such
agreement or instrument except as to the extent the Plan Administrator
determines such result would have been contrary to the intent of the Company in
establishing and maintaining this Plan.


 


9.19         Indemnification.  The Company and its Affiliates shall jointly
and severally indemnify, defend, and hold harmless any officer, Employee or
director of the Company or an Affiliate (hereinafter an “Indemnified Individual”),
for all acts taken or omitted in carrying out the responsibilities of the
Company, Affiliate, Plan Administrator, Benefit Appeals Committee or
Compensation Committee  under the
terms of this Plan or other responsibilities imposed upon such Indemnified
Individual by ERISA.  This
indemnification for all such acts taken or omitted is intentionally broad, but shall
not provide indemnification for any civil penalty that may be imposed on such
Indemnified Individual under ERISA Section 502(i), nor shall it provide
indemnification for any liability imposed upon such Indemnified Individual for
his embezzlement or diversion of Plan funds for the benefit of such Indemnified
Individual.  The Company and all
Affiliates shall jointly and severally indemnify any such Indemnified
Individual for expenses of defending a claim brought by a Participant,
beneficiary, service provider, government entity or other person, including all
legal fees and other costs of such 


 


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defense and shall advance funds as necessary
for such defense on a timely basis. 
The Company and all Affiliates shall also reimburse promptly or advance
funds to any such Indemnified Individual for any monetary payment or obligation
to pay of such Indemnified Individual arising from a successful claim against
such Indemnified Individual in any court or arbitration.  In addition, if a claim is settled (whether
or not in connection with a formal legal action or arbitration) with the
concurrence of the Company, the Company and all Affiliates shall jointly and
severally indemnify any such Indemnified Individual for any monetary liability
under any such settlement, and the expenses thereof.  Such indemnification will not be provided to
any person who is not, at the time of the events for which indemnity is sought,
a present or former officer, Employee or director of the Company or an
Affiliate, nor shall it be provided for any claim by the Company or an
Affiliate against any such Indemnified Individual.


 


9.20         Titles and Headings.  The titles and headings are for reference
only.  In the event of a conflict between
a title or heading and the content of a Section, the content of the Section shall
control.


 


IN WITNESS
WHEREOF, Sealy Corporation, by its duly authorized officers, has executed this
instrument in several counterparts, as of the 18th day of December, 2008.


 


	
   

  	
  SEALY CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth L. Walker

  
	
   

  	
  Its:

  	
  Senior Vice President, General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  And:

  	
  /s/ Lawrence J. Rogers

  
	
   

  	
  Its:

  	
  President & CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  And:

  	
  /s/ Michael Q. Murray

  
	
   

  	
  Its:

  	
  Assistant Secretary

  
							



 


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