Exhibit 10.39


 


AMENDMENT NUMBER TWO


TO THE


SEALY CORPORATION BONUS PLAN


 


WHEREAS,
the Sealy Corporation, a Delaware Corporation (“Company”), maintains this
incentive compensation plan (“Plan”) for the benefit of its eligible employees;
and


 


WHEREAS,
the company now desires to amend the plan to reflect changes in the performance
goals and eligibility and treatment of certain participants,


 


NOW,
THEREFORE, the Company does hereby amend the Plan, to be effective retroactive
to November 29, 1999, as follows:


 


FIRST,
Section 5 of the Plan is deleted in its entirety and the following is
substituted therefore:


 


5.               Special Circumstances.  A participant’s bonus award will be prorated
based upon the number of days of active employment during the fiscal year under
any of the following circumstances occurring during the fiscal year:


 


a)              the participant
is hired or rehired after the beginning of the fiscal year, and on or before
October 31st of the fiscal year;


 


b)             the participant
terminates employment by reason of


(1)          death


(2)          long-term disability, or


(3)          retirement (after attainment of age 65 or attainment
of age 62 with 10 or more years of service); or


 


c)              the participant
experience a period of unpaid leave of absence (whether by layoff, workers
compensation leave or other leave of absence) for a continuous period of 30
days or more.


 


A participant who is hired,
transferred, or promoted during the fiscal year will receive a prorated bonus
based upon the number of days worked in each position and at each
location/segment and in each bonus group. 
Hires, transfers, or promotions, which occur after October 31st
shall not take effect for bonus purposes until the following fiscal year.


 


SECOND,
Section 6 of the Plan is deleted in its entirety and the following is
substituted therefore:


 


6.               Goals.  The performance goals for business segments
will be based on corporate cash requirements, budgets, and expected results.
One or more goals are defined annually for each business segment at the
following achievement levels:


 


Maximum is the goal assigned to each segment that provides
a bonus payout of two times the target payment amount.


 


Target is the goal assigned to each segment that provides
a bonus payout at the target payment level


 


Minimum is the goal assigned to each segment that must be
achieved prior to any bonus payout for the segment.


 





















 


Each
year a communication will be issued to segment managers defining the corporate
and segment goals and quantifying the achievement levels for each goal.  Segment managers will receive a list of
participants in their area and periodic updates on corporate and segment
performance against goals.


 


Adjustments
to goals may be provided for i) Extraordinary Items as defined by APB 30, i.e. “unusual
in nature and infrequent in occurrence”; ii) any financial impact of new
accounting pronouncements; and iii) any other items approved by the the Board
or the HR Committee.


 


THIRD,
Section 7 of the Plan is deleted in its entirety and the following is
substituted therefore:


 


7.               Eligibility and
Method of Payment of Award.  In order to be eligible to receive a bonus
payment for a given fiscal year, a participant must be hired on or before
October 31st of the fiscal year and must remain employed by the
Company through the last day of the fiscal year, unless employment is
terminated by reason set forth in Section 5(b).  All such bonus awards shall be paid in a
single cash lump sum (less applicable withholding) on the January 31st
immediately following the end of the fiscal year, or if later, promptly
following the completion of the outside audit of the Company’s financial
statements.


 


FOURTH,
Section 8 of the Plan is deleted in its entirety and the following is
substituted therefore:


 


8.               Amendment and
Termination.  The Plan is effective
November 29, 1999 for fiscal years 2000 and beyond.  The Board of Directors may amend, amend,
terminate, or otherwise modify the Plan at any time.


 


IN WITNESS WHEREOF, the Company, by its duly
authorized officers, has executed this instrument in several counterparts this
11th day of October, 2000.


 


 


	
   

  	
  SEALY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/ Kenneth L. Walker

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:
  

  	
  VP General Counsel & Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  And:
  

  	
  /s/ Jeffrey C. Claypool

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:
  

  	
  VP Human Resources

  	
   

  



 


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