Exhibit 10.38


AMENDMENT NUMBER ONE


TO THE


SEALY 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,
Section 8 of the Plan reserves to the Company the right to amend the Plan;
and


 


WHEREAS,
the Company now desires to amend the Plan to increase the potential bonus
payout for certain participants,


 


NOW,
THEREFORE, the Company does hereby amend the Plan, to be effective retroactive
to December 1, 1995, as follows:


 


FIRST:                                   Section 3
of the Plan is deleted in its entirety and the following is substituted
therefor:


 


3.     Participation.   Participants in the Plan are selected during
each fiscal year by the Board from exempt salaried employees. Participants are
assigned to a bonus group at the sole discretion of the Board, with groupings
generally as follows:


 


	
  Group
  8:

  	
   

  	
  Selected
  Senior Company Executives

  
	
   

  	
   

  	
   

  
	
  Group
  7:

  	
   

  	
  Senior
  Company Executives

  
	
   

  	
   

  	
   

  
	
  Group
  6:

  	
   

  	
  Corporate
  and Regional Vice Presidents

  
	
   

  	
   

  	
   

  
	
  Group
  5:

  	
   

  	
  Other
  Senior Management

  
	
   

  	
   

  	
   

  
	
  Group
  4:

  	
   

  	
  Plant
  Managers, Sales Managers

  
	
   

  	
   

  	
   

  
	
  Group
  3:

  	
   

  	
  Other
  Middle Management

  
	
   

  	
   

  	
   

  
	
  Group
  2:

  	
   

  	
  Plant
  Controllers, Senior Professionals and Supervisors

  
	
   

  	
   

  	
   

  
	
  Group
  1:

  	
   

  	
  Selected
  Exempt Employees

  



 


SECOND:                    Section 4 of the Plan
is deleted in its entirety and the following is substituted therefor:


 


4.     Amount of Award.  Bonus awards under the Plan are based on the
degree to which the financial performance of the Company, its operating plants,
regions and selected subsidiaries meet the goals established for each fiscal
year.


 





















 


Individual awards under the
Plan are based on the performance of the business segment (i.e., Company,
division, plant and/or region) to which such participant is assigned. The
percentage of salary used in the bonus award calculation for each Group
increases from zero to a stated maximum as performance exceeds the minimum goal
according to the following Schedule of Bonus Awards:


 


	
  GROUP

  	
   

  	
  MINIMUM

  	
   

  	
  TARGET

  	
   

  	
  MAXIMUM

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
  (As
  determined by the Board for each participant)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
  0%

  	
   

  	
  35%

  	
   

  	
  70%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
  0%

  	
   

  	
  30%

  	
   

  	
  60%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
  0%

  	
   

  	
  25%

  	
   

  	
  50%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
  0%

  	
   

  	
  20%

  	
   

  	
  40%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
  0%

  	
   

  	
  15%

  	
   

  	
  30%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
  0%

  	
   

  	
  10%

  	
   

  	
  20%

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  0%

  	
   

  	
  5%

  	
   

  	
  10%

  



 


Subject to section 5
below, bonus awards will be calculated as a percentage of a participant’s
weighted average annual rate of base salary in effect for the fiscal year for
which a bonus is payable.


 


IN
WITNESS WHEREOF, the Company, by its duly authorized officers, has executed
this instrument in several counterparts this 30th day of Oct., 1996.


 


 


	
   

  	
  SEALY
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ron L. Jones

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President
  / C.E.O.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  And:

  	
  /s/
  Jeffrey C. Claypool

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  V.P.
  Human Resources

  	
   

  



 


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