EX-10.3 SUPPLEMENT TO EMPLOYMENT AGREEMENT



 






Exhibit 10.3



SUPPLEMENT TO EMPLOYMENT AGREEMENT




     This Supplement to the Employment Agreement (as defined below) effective as of the 7th day of
December, 2005 (the “Supplement Agreement”) is made between RHONDA C. ROUSCH (the “Executive”) and
SIMMONS COMPANY (p/k/a THL BEDDING HOLDING COMPANY), a Delaware corporation, (“Holdings”) and
SIMMONS BEDDING COMPANY (p/k/a SIMMONS COMPANY), a Delaware corporation, along with its
subsidiaries, parents, joint ventures, affiliated entities, and includes its successors and assigns
or any such related entities (the “Company”). In consideration of the payment in Section 1 below,
and pursuant to Section 14 of the Executive’s Employment Agreement made as of December 19, 2003
(“Employment Agreement”), the Executive, Holdings and the Company hereby acknowledge and agree that
this Supplement Agreement shall amend and supplement the Executive’s Employment Agreement. The
Executive, Holdings and the Company also acknowledge and agree that this Supplement Agreement
specifically supersedes Sections 5, 6, 7, and 9.5 of the Employment Agreement in their entirety and
Sections 14 and 19 of the Employment Agreement, but only for the purposes of interpretation of this
Supplement Agreement and only then to the extent the terms and conditions of Sections 14 and 19
conflict with this Supplement Agreement, so that such terms and conditions shall have no further
force or effect as of the effective date of this Supplement Agreement. Sections 14 and 19 of the
Employment Agreement continue to be in full force and effect with respect to the interpretation of
the remaining terms of the Employment Agreement (other than Section 5, 6, 7 and 9.5) and the
revisions set forth in this Supplement Agreement do not apply to the same. The parties agree to
the following:


1. Consideration: In consideration for the execution by the Executive of this Supplement
Agreement, Company is increasing the Executive’s Salary by $1,000 to $276,000 effective as of the
7th day of December, 2005. The Executive acknowledges the receipt and sufficiency of
this consideration.



2. Restrictive Covenants.




     a. Definitions: Unless otherwise specifically defined herein, each term used herein
that is defined in the Employment Agreement shall have the meaning assigned to such term therein.



          (1) “Business of the Company” means the highly competitive business of developing,
manufacturing, marketing, distributing, and/or selling sleep products, including mattresses,
foundations, changing pads and covers, and bedding components for the same.




          (2) “Competitive Business(es)” include any firm, partnership, corporation, joint venture
and/or any other entity and/or person, including but not limited to Sealy Corporation, Serta
International, Spring Air Company, Select Comfort Corporation, Tempur-Pedic International, Inc.,
King Koil Licensing Company, Inc., and/or any licensee of such entity, that develops, manufactures,
markets, distributes, and/or sells any of the sleep products described in Section 2.a.(1).




          (3) The Executive’s “Job Duties” are those duties set forth in Section 2 of the Employment
Agreement and those duties as may from time-to-time reasonably be prescribed by the Company during
the period of Executive’s employment with the Company.




          (4) “Customers” means any firm, partnership, corporation and/or any other entity and/or person
that purchased or purchases from the Company any of the sleep products described in Section
2.a.(1).




          (5) “Customer Prospects” means any firm, partnership, corporation and/or any other entity
and/or person that was reasonably expected by the Company to purchase from the Company any of the
sleep products described in Section 2.a.(1).


14









 







           (6) “Vendors” means any individual and/or entity that provided goods and services to the
Company.




          (7) “Material Contact” means personal contact or the supervision of the efforts of those who
have direct personal contact with Customers, Customer Prospects, or Vendors in an effort to
initiate or further a business relationship between the Company and such Customers, Customer
Prospects, or Vendors.




          (8) “Confidential Information” means information about the Company and its Customers, Customer
Prospects, and/or Vendors that is not generally known outside of the Company, which the Executive
learned or will learn of in connection with the Executive’s employment with the Company.
Confidential Information may include without limitation: (1) the Company’s business policies,
finances, and business plans; (2) the Company’s financial projections, including but not limited
to, annual sales forecasts and targets and any computation(s) of the market share of Customers
and/or Customer Prospects; (3) sales information relating to the Company’s product roll-outs; (4)
customized software, marketing tools, and/or supplies that the Executive was provided access to by
the Company and/or created; (5) the identity of the Company’s Customers, Customer Prospects, and/or
Vendors (including names, addresses, and telephone numbers of Customers, Customer Prospects, and/or
Vendors); (6) any list(s) of the Company’s Customers, Customer Prospects, and/or Vendors; (7) the
account terms and pricing upon which the Company obtains products and services from its Vendors;
(8) the account terms and pricing of sales contracts between the Company and its Customers; (9) the
proposed account terms and pricing of sales contracts between the Company and its Customer
Prospects; (10) the names and addresses of the Company’s employees and other business contacts of
the Company; and (11) the techniques, methods, and strategies by which the Company develops,
manufactures, markets, distributes, and/or sells any of the sleep products described in Section
2.a.(1).




          (9) “Trade Secrets” means Confidential Information which meets the additional requirements of
the Delaware Uniform Trade Secrets Act (“DUTSA”), 6 Del. Code Ann. §§ 2001-2011, and/or
under any other applicable law.




          (10) “Proprietary Rights” means any and all inventions, discoveries, developments, methods,
processes, compositions, works, supplier and customer lists (including information relating to the
generation and updating thereof), concepts, and ideas (whether or not patentable or copyrightable)
conceived, made, developed, created, or reduced to practice by the Executive (whether at the
request or suggestion of the Company or otherwise, whether alone or in conjunction with others, and
whether during regular hours of work or otherwise) prior to or during the Executive’s employment,
which may be directly or indirectly useful in, or related to, the Business of the Company or any
business or products contemplated by the Company while the Executive was or is an employee,
officer, or director of the Company.




     b. The Executive agrees that Executive’s work for the Company has brought and will bring the
Executive into close contact with many of the Customers, Customer Prospects, Vendors, Trade
Secrets, and Confidential Information. The Executive further agrees that the covenants in this
Section 2 are reasonable and necessary to protect the Company’s legitimate business interests and
its Customer, Customer Prospects, and Vendor relationships, Trade Secrets, Confidential
Information, and Proprietary Rights.



     c. The Executive agrees to faithfully perform the duties assigned to the Executive and will
not engage in any other employment or business activity while employed by the Company that might
interfere with the Executive’s full-time performance of the Executive’s duties for the Company or



15









 







cause a conflict of interest. The Executive agrees to abide by all of the Company’s policies
and procedures, which may be amended from time-to-time.



     d. The Executive further agrees that, due to the Executive’s position, the Executive’s
engaging in any activity that may breach this Supplement Agreement will cause the Company great,
immediate and irreparable harm.



     e. Duty of Confidentiality. The Executive agrees that during Executive’s
employment with the Company and for a period of five (5) years following the termination of such
employment for any reason, the Executive shall not directly or indirectly divulge or make use of
any Confidential Information outside of Executive’s employment with the Company (so long as the
information remains confidential) without the prior written consent of the Company. The Executive
shall not directly or indirectly misappropriate, divulge, or make use of Trade Secrets for an
indefinite period of time, so long as the information remains a Trade Secret as defined by the
DUTSA and/or any other applicable law. The Executive further agrees that if the Executive is
questioned about information subject to this Supplement Agreement by anyone not authorized to
receive such information, the Executive will notify the Company’s General Counsel within 24 hours.
The Executive acknowledges that applicable law may impose longer duties of non-disclosure,
especially for Trade Secrets, and that such longer periods are not shortened by this Supplement
Agreement.



     f. Return of Confidential Information And Company Property. The Executive agrees
to return all Confidential Information and/or Trade Secrets within three (3) calendar days
following the termination of the Executive’s employment for any reason. To the extent the
Executive maintains Confidential Information and/or Trade Secrets in electronic form on any
computers or other electronic devices owned by the Executive, the Executive agrees to irretrievably
delete all such information and to confirm the fact of deletion in writing within three (3)
calendar days following termination of employment with the Company for any reason. The Executive
also agrees to return all property in the Executive’s possession at the time of the termination of
the employment with the Company, including but not limited to all documents, records, tapes, and
other media of every kind and description relating to the Business of the Company and its
Customers, Customer Prospects, and/or Vendors, and any copies, in whole or in part, whether or not
prepared by the Executive, all of which shall remain the sole and exclusive property of the
Company.



     g. Proprietary Rights. Proprietary Rights shall be promptly and fully disclosed by
the Executive to the Company’s General Counsel and shall be the exclusive property of the Company
as against the Executive and Executive’s successors, heirs, devisees, legatees and assigns. The
Executive hereby assigns to the Company Executive’s entire right, title, and interest therein and
shall promptly deliver to the Company all papers, drawings, models, data, and other material
relating to any of the foregoing Proprietary Rights conceived, made, developed, created or reduced
to practice by Executive as aforesaid. All copyrightable Proprietary Rights shall be considered
“works made for hire.” The Executive shall, upon the Company’s request and at its expense, execute
any documents necessary or advisable in the opinion of the Company’s counsel to assign, and confirm
the Company’s title in the foregoing Proprietary Rights and to direct issuance of patents or
copyrights to the Company with respect to such Proprietary Rights as are the Company’s exclusive
property as against the Executive and Executive’s successors, heirs, devisees, legatees and assigns
under this Section 2.g. or to vest in the Company title to such Proprietary Rights as against the
Executive and Executive’s successors, heirs, devisees, legatees and assigns, the expense of
securing any such patent or copyright, however, to be borne by the Company.



     h. Non-Competition. The Executive covenants and agrees that, during the term of the
Executive’s employment with the Company and for two (2) years after the termination thereof,
regardless of the reason for the employment termination, the Executive will not, directly or
indirectly, anywhere in the Continental United States, on behalf of any Competitive Business: (1)
perform the same or substantially the same Job Duties described in Section 2.a.(3), (2) assume a
position that is the senior most human resources executive of the business, and/or (3) assume a
position which is



16









 







responsible for the overall strategic leadership for and authority over human resource
functions, including the management of equal employment obligations, employee wages and benefits,
and/or labor, or for any such sub-function of human resources.



     i. Non-Solicitation of Customers, Customer Prospects, and Vendors. The Executive also
covenants and agrees that during the term of the Executive’s employment with the Company and for
two (2) years after the termination thereof, regardless of the reason for the employment
termination, the Executive will not, directly or indirectly, solicit or attempt to solicit any
business from any of the Company’s Customers, Customer Prospects, and/or Vendors with whom the
Executive had Material Contact during the last two (2) years of the Executive’s employment with the
Company.



     j. Non-Solicitation of Employees. The Executive also covenants and agrees that
during the term of the Executive’s employment with the Company and for two (2) years after the
termination thereof, regardless of the reason for the employment termination, the Executive will
not, directly or indirectly, on Executive’s own behalf or on behalf of or in conjunction with any
person or legal entity, recruit, solicit, or induce, or attempt to recruit, solicit, or induce, any
non-clerical employee of the Company with whom Executive had personal contact or supervised while
performing Executive’s Job Duties, to terminate their employment relationship with the Company.



     k. Ownership of Securities. Notwithstanding the provisions set forth herein, the
Executive shall have the right to (a) invest in or acquire any class of securities issued by any
firm, partnership, corporation, and/or any other entity and/or person not engaged in any
Competitive Business, or (b) acquire as a passive investor (with no involvement in the operations
or management of the business) up to 1% of any class securities which is (i) issued by any
Competitive Business, and (ii) publicly traded on a national securities exchange or
over-the-counter market.



     l. No Disparagement. Each of the parties hereto covenants and agrees that, during the
term of the Executive’s employment with the Company and for two (2) years after the termination
thereof, regardless of the reason for the employment termination, such party will not, directly or
indirectly, either in writing or by any other medium, make any disparaging, derogatory or negative
statement, comment or remark about the other parties hereto, or any of them, of Thomas H. Lee
Partners, or any other their respective officers, directors, employees, affiliates, subsidiaries,
successors and assigns, as the case may be; provided, however, that this Section 2.l. shall not be
construed to require a party to provide other than truthful testimony when compelled to testify.



     m. Advanced Notice of Proposed Actions. The Executive agrees that, before
Executive commences employment, solicitations, or any other activity that could possibly violate
this Supplement Agreement and/or brings any claim or cause of action concerning this Supplement
Agreement, the Executive will notify the Company’s General Counsel of Executive’s intent to
commence such actions. The Company’s General Counsel will then advise the Executive whether the
Executive’s proposed actions would violate terms and conditions of this Supplement Agreement. Any
claim or cause of action brought by the Executive prior to Executive’s notice and the General
Counsel’s response shall be dismissed. Nothing within this Section limits the Company’s ability to
enforce this Supplement Agreement, and seek any and all relief to which it would be entitled,
should the Executive violate this Supplement Agreement without providing advanced notice.



     n. False Claims Representations, Cooperation and Promises. Executive agrees to
disclose to Company any information Executive learns concerning any conduct involving Company that
Executive has any reason to believe may be unlawful. Executive promises to cooperate fully with
Company during and after Executive’s employment with the Company in any investigation Company
undertakes into matters occurring during Executive’s employment with Company. Executive agrees
that, as and when requested by Company whether during or after Executive’s employment with the
Company, Executive will fully cooperate with Company in effecting a smooth transition of
Executive’s responsibilities to others. If requested by Company, Executive will promptly and fully
respond to all inquiries from Company and its representatives relating to any claims or lawsuits
which relate to matters which occurred during Executive’s employment with Company. If Executive is
contacted as a potential witness to any claim or in any litigation at any time, Executive will
notify



17









 







Company of any such contact or request within one (1) day after learning of it and will permit
Company to take all steps it deems to be appropriate, if any, to prevent Executive’s involvement,
or to be present during any such discussions. This section does not prohibit Executive’s
participation as a witness to the extent otherwise legally required, but does require that
Executive provide Company with notice and the opportunity to object and/or participate.


3. Early Termination of Severance Benefits. If the Executive is entitled to compensation
pursuant to Section 9.4 of the Employment Agreement or otherwise and engages in activities
prohibited by Section 2 of this Supplement Agreement, then the Company may thereafter immediately
terminate and shall not be required to continue to pay the Executive, or Executive’s dependants and
beneficiaries, any compensation provided for in Section 9.4 of the Employment Agreement, other than
those benefits that the Company may be required to maintain for the Executive under applicable law.



4. Remedies, Choice of Law, and Forum Selection. In addition to any other remedies at law
or in equity it may have, each party shall be entitled to seek equitable relief, including
injunctive relief and specific performance, in connection with a breach of the provisions of this
Supplement Agreement. All provisions of this Supplement Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware exclusively and without reference to
principles of conflict of laws. Any lawsuit, claim, or other legal proceeding arising out of or
relating to this Supplement Agreement shall be brought exclusively in the Delaware Court of
Chancery, and the Executive and the Company hereby submit to personal jurisdiction within the State
of Delaware and to venue in such courts.





	 	 	_/s/ RR___  Executive’s initials to acknowledge agreement to Remedies, Choice of Law, and Forum
Selection provision in Section 4.





     5. Construction of Supplement Agreement. The covenants contained herein shall be
presumed to be enforceable, and any reading causing unenforceability shall yield to a construction
permitting enforcement. If any single covenant or clause shall be found unenforceable, it shall be
severed and the remaining covenants and clauses enforced in accordance with the tenor of the
Supplement Agreement. In the event the court should determine not to enforce a covenant as written
due to overbreadth, the parties specifically agree that said covenant shall be modified and
enforced to the extent reasonable, whether said modifications be in time, territory, or scope of
prohibited activities.



     6. Entire Agreement. This Supplement Agreement represents the entire understanding between
the Executive, Holdings and the Company on the matters addressed herein and may not be modified,
changed or altered by any promise or statement by Holdings or the Company other than in writing
signed by the Executive and an authorized representative of Holdings and Company. In addition to
the Employment Agreement sections specifically set forth above, this Supplement Agreement
supersedes the Employment Agreement and/or other prior agreement(s) between the Executive and
Holdings and/or the Company, to the extent the terms of the Employment Agreement and/or such
agreement(s) conflict with this Supplement Agreement. Otherwise, this Supplement Agreement
supplements the Employment Agreement and other prior agreement(s). The waiver by Holdings and/or
the Company of a breach of any provision of this Supplement Agreement by any employee shall not be
construed as a waiver of rights with respect to any subsequent breach by the Executive.



The Executive acknowledges that Executive has carefully read and understands the provisions of this
Supplement Agreement, and understands that Executive has the right to seek independent advice at
the Executive’s expense or to propose modifications prior to signing the Supplement Agreement and
has negotiated proposed modifications to the extent Executive deemed necessary. Nothing contained
in this Supplement Agreement creates a contractual right to a continued employment for a definite
term. The Executive represents and warrants that the Executive has entered into this Supplement
Agreement voluntarily and after consulting with whomsoever the Executive wished.



	 	 	 	 	 
	Executed this                     

	 	 7th                      day of                     
	 	 December                                                             , 2005.
	 

	 	(day)
	 	     (month)






	 	 	 	 	 
	RHONDA C. ROUSCH

	 	SIMMONS BEDDING COMPANY	 	 
	/s/ Rhonda C. Rousch

	 	/s/ Kristen K. McGuffey	 	 
	 
	 	 	 	 
	 


	 	 

	 	 






	 	 	 	 	 	 	 
	(Print Name)

	 	 	 	 	 	By:           Kristen K. McGuffey                    
	 

	 	 

	 	 	 	 
	Social Security #:

	 	 	 	 	 	Title:           SVP and General Counsel                    
	 

	 	 

	 	 	 	 






	 	 	 	 	 
	 

	 	SIMMONS COMPANY	 	 
	 

	 	/s/ Kristen K. McGuffey	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	By:           Kristen K. McGuffey                    	 	 
	 
	 	 	 	 
	 

	 	Title:           SVP and General Counsel                    	 	 







18