Document:

exhibit101.htm

    AMENDED
AND RESTATED

     

    EMPLOYMENT
AND NONCOMPETITION AGREEMENT

     

    THIS
AMENDED AND RESTATED EMPLOYMENT AND NONCOMPETITION AGREEMENT (the “Agreement”) is dated
as of July 11, 2003 and amended and restated effective March 5, 2008 by and
among Tempur-Pedic International Inc. (the “Company”), Tempur
World, LLC, as successor to Tempur World, Inc. (“Tempur World”), and
Dale Williams, an individual (“Employee”).

     

    RECITALS

     

    WHEREAS,
Tempur World, Inc. and the Employee have entered into an Employment and
Noncompetition Agreement dated July 11, 2003 (the “Original
Agreement”).

     

    WHEREAS,
Tempur World desires to assign the Original Agreement to the Company, and the
Company desires to assume the Original Agreement.

     

    WHEREAS,
the Company, Tempur World and Employee wish to amend and restate the Original
Agreement by entering into this Agreement. 

     

    NOW
THEREFORE, in consideration of the premises and the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the Company and
Employee;

     

    Tempur
World hereby assigns to the Company all Tempur World’s rights, obligations and
interests as employer under the Original Agreement and the Company agrees to
assume and to perform all of the terms, covenants and conditions required to be
performed on the part of the Company under the Original Agreement effective
immediately.  Employee consents to Tempur World’s assignment and the
Company’s assumption of the Original Agreement.

     

    The
Company and the Employee agree to amend and restate the Original Agreement in
its entirety to read as follows:

     

    ARTICLE
I

     

    EMPLOYMENT

     

    1.1 Term of
Employment.  The Company employs Employee, and Employee accepts
employment by the Company, for the period commencing on July 7, 2003, and ending
on July 6, 2004, subject to earlier termination following the initial Employment
Term, as hereinafter set forth in Article III (the “Employment Term”).
Unless earlier terminated in accordance with Article III, following the
expiration of the Employment Term, the Employment Term shall be automatically
renewed for successive one-year periods (collectively, the “Renewal Terms”;
individually, a “Renewal Term”)
unless, at least 90 days prior to the expiration of the Employment Term or the
then current Renewal Term, either party provides the other with a written notice
of intention not to renew, in which case the Employee’s employment with the
Company, and the Company’s obligations hereunder, shall terminate as of the end
of the Employment Term or said Renewal Term, as applicable; provided, however,
that Employee shall agree to continue his employment hereunder at the option of
the Company for a period of six (6) months following written notice by either
party of intention to terminate or not to renew (other than any such written
notice given within ninety (90) days following a Change in Control). Except as
otherwise expressly provided herein, the terms of this Agreement during any
Renewal Term shall be the same as the terms in effect immediately prior to such
renewal, subject to any such changes or modifications as mutually may be agreed
between the parties as evidenced in a written instrument signed by both the
Company and Employee.  As used herein, “Change in Control” shall mean
a change in the ownership of the Company, such that more than 50% of the equity
securities of the Company are acquired by any person or group (as such terms are
defined for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended) that does not own common stock of the Company on the date of this
Agreement; provided, however, no Change in Control shall be deemed to occur if
such Change in Control is effected pursuant to any internal reorganization of
the Company (including, by way of example, establishment of a new holding
company for the Company) that does not result in a change of more than 50% of
the ultimate equity ownership of the Company.

     

    1.2 Position and Duties.
Employee shall be employed in the position of Executive Vice President, Chief
Financial Officer and Secretary or such other executive positions as may be
assigned from time to time by the Company’s Chief Executive Officer. In such
capacity, Employee shall be subject to the authority of, and shall report to,
the Company’s Chief Executive Officer. Employee’s duties and responsibilities
shall be as generally described in the letter agreement dated July 7, 2003,
incorporated herein by this reference (the “Letter Agreement”),
and shall include all those customarily attendant to such position and such
other duties and responsibilities as may be assigned from time to time by the
Chief Executive Officer. Employee shall devote Employee’s entire business time,
loyalty, attention and energies exclusively to the business interests of the
Company while employed by the Company, and shall perform his duties and
responsibilities diligently and to the best of his ability.

     

    ARTICLE
II

     

    COMPENSATION
AND OTHER BENEFITS

     

    2.1 Base Salary. The
Company shall pay Employee an initial annual salary of $225,000.00 (“Base Salary”),
payable in accordance with the normal payroll practices of the Company. The
Employee’s Base Salary will be reviewed and be subject to adjustment by the
Board of Directors on or about January 1 of each year beginning with January 1,
2004.

     

    2.2 Performance Bonus.
Employee will be eligible to earn an annual performance-based bonus based on a
formula approved by the Company’s Board of Directors or Compensation Committee
for each full or pro-rata portion of the fiscal year during which Employee is
employed by the Company (a “Bonus Year”), the
terms and conditions of which as well as Employee’s entitlement thereto shall be
determined annually in the sole discretion of the Company’s Board of Directors
or its Compensation Committee (the “Performance Bonus”).
The amount of the Performance Bonus will vary based on the achievement of
performance criteria in the formula established by the Company’s Board of
Directors, but the formula will be set to target a Performance Bonus equal to
not less than 50% of Base Salary as of January 1st of the Bonus Year if the
performance criteria in the formula are met. The Company’s Annual Performance
Bonus Program is generally described in the Letter Agreement, subject to
periodic adjustment by the Board of Directors.

     

    2.3 Benefit Plans.
Employee will be eligible to participate in the Company’s retirement plans that
are qualified under Section 401 (a) of the Internal Revenue Code of 1986, as
amended, and in the Company’s welfare benefit plans that are generally
applicable to all executive employees of the Company (the “Plans”), in
accordance with the terms and conditions thereof.

     

    2.4 Expenses. The Company
shall reimburse Employee for all authorized and approved expenses incurred in
the course of the performance of Employee’s duties and responsibilities pursuant
to this Agreement and consistent with the Company’s policies with respect to
travel, entertainment and miscellaneous expenses, and the requirements with
respect to the reporting of such expenses.

     

    2.5 Automobile Allowance.
The Company shall pay to Employee an automobile allowance of $600.00 per
month.

     

    2.6 Vacation. Employee
shall be entitled to 15 vacation days in any calendar year to be taken in
accordance with the Company’s general vacation policies for similarly situated
executive employees.

     

    2.7 Grant of Stock
Options. Employee shall be granted options to purchase 1,000 shares of
the Class B-1 Voting Common Stock of TWI Holdings, Inc. for a purchase price per
share equal to the fair market value per share of Class B-1 Voting Common Stock
of TWI Holdings, Inc. on the date hereof (as determined by the Board of
Directors of TWI Holdings, Inc., currently estimated to be $1,250 per share),
pursuant to a Stock Option Agreement between TWI Holdings, Inc. and Employee. On
the first anniversary of the date hereof, 25% of the options shall become
vested, and quarterly hereafter, 6.25% of the options shall become vested, such
that all of the options shall be vested on and after the fourth anniversary of
the date hereof. Such options, and any shares issued upon exercise of such
options, shall be subject to certain termination and repurchase rights of TWI
Holdings, Inc. upon termination of employment of Employee, and shall be subject
to restrictions on transfer as set forth in the Stock Option Agreement, the
Stock Repurchase Agreement attached thereto as an exhibit and the Stockholder
Agreement among TWI Holdings, Inc. and its stockholders. Future options may be
granted as determined by the Board of Directors of the Company.

     

    2.8 Additional Benefits.
The Company shall provide Employee with a Relocation Package and Major Company
Paid Benefits as described in the Letter Agreement.

     

    ARTICLE
III

     

    TERMINATION

     

    3.1 Right to Terminate;
Automatic Termination

     

    (a) Termination by Company
Without Cause. Subject to Section 3.2, the Company may terminate
Employee’s employment and all of the Company’s obligations under this Agreement
at any time and for any reason.

     

    (b) Termination by Employee for
Good Reason. Subject to Section 3.2, Employee may terminate his
employment obligation hereunder (but not his obligation under Article IV hereof)
for “Good Reason” (as hereinafter defined) if Employee gives written notice
thereof to the Company within thirty (30) days of the event he deems to
constitute Good Reason (which notice shall specify the grounds upon which such
notice is given) and the Company fails, within 30 days of receipt of such
notice, to cure or rectify the grounds for such Good Reason termination set
forth in such notice.

     

    “Good Reason” shall
mean any of the following: (i) relocation of Employee’s principal workplace over
60 miles from the Company’s existing workplaces without the consent of Employee
(which consent shall not be unreasonably withheld, delayed or conditioned), or
(ii) the Company’s material breach of the Agreement which is not cured within 30
days after receipt by the Company from Employee of written notice of such
breach.

     

    (c) Termination by Company For
Cause. Subject to Section 3.2, the Company may terminate Employee’s
employment and all of the Company’s obligations under this Agreement at any time
“For Cause” (as defined below)  by giving notice to Employee stating
the basis for such termination, effective immediately upon giving such notice or
at such other time thereafter as the Company may designate. “For Cause” shall
mean any of the following: (i) Employee’s willful and continued failure to
substantially perform the reasonably assigned duties with the Company which are
consistent with Employee’s position and job description referred to in this
Agreement, other than any such failure resulting from incapacity due to physical
or mental illness, after a written notice is delivered to Employee by the Board
of Directors of the Company which specifically identifies the manner in which
Employee has not substantially performed the assigned duties, (ii) Employee’s
willful engagement in illegal conduct which is materially and demonstrably
injurious to the Company, (iii) Employee’s conviction by a court of competent
jurisdiction of, or his pleading guilty or nolo contendere to, any felony, or
(iv) Employee’s commission of an act of fraud, embezzlement, or misappropriation
against the Company, including, but not limited to, the offer, payment,
solicitation or acceptance of any unlawful bribe or kickback with respect to the
Company’s business. For purposes of this paragraph, no act, or failure to act,
on Employee’s part shall be considered “willful” unless done, or omitted to be
done, in knowing bad faith and without reasonable belief that the action or
omission was in, or not opposed to, the best interests of the Company. Any act,
or failure to act, expressly authorized by a resolution duly adopted by the
Board of Directors or based upon the written advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, in good faith
and in the best interests of the Company. Notwithstanding the foregoing,
Employee shall not be deemed to have been terminated For Cause unless and until
there shall have been delivered to Employee a copy of a resolution, duly adopted
by the Board of Directors at a meeting of the Board called and held for such
purpose (after reasonable notice to Employee and an opportunity for Employee,
together with Employee’s counsel, to be heard before the Board), finding that in
the good faith opinion of the Board of Directors Employee committed the conduct
set forth above in (i), (ii), (iii) or (iv) of this Section and specifying the
particulars thereof in detail.

     

    (d) Termination Upon Death or
Disability. Subject to Section 3.2, Employee’s employment and the
Company’s obligations under this Agreement shall terminate: (1) automatically,
effective immediately and without any notice being necessary, upon Employee’s
death; and (ii) in the event of the disability of Employee, by the Company
giving notice of termination to Employee. For purposes of this Agreement,
“disability” means the inability of Employee, due to a physical or mental
impairment, for 90 days (whether or not consecutive) during any period of 360
days, to perform, with reasonable accommodation, the essential functions of the
work contemplated by this Agreement. In the event of any dispute as to whether
Employee is disabled, the matter shall be determined by the Company’s Board of
Directors in consultation with a physician selected by the Company’s health or
disability insurer or another physician mutually satisfactory to the Company and
the Employee. The Employee shall cooperate with the efforts to make such
determination or be subject to immediate discharge. Any such determination shall
be conclusive and binding on the parties. Any determination of disability under
this Section 3.1 is not intended to alter any benefits any party may be entitled
to receive under any long-term disability insurance policy carried by either the
Company or Employee with respect to Employee, which benefits shall be governed
solely by the terms of any such insurance policy. Nothing in this subsection
shall be construed as limiting or altering any of Employee’s rights under State
workers compensation laws or State or Federal Family and Medical Leave
laws.

     

    3.2 Rights Upon
Termination.

     

    (a)           Section 3.1(a) and 3.1(b)
Termination. If Employee’s employment terminates pursuant to Section
3.1(a) or 3.1(b) hereof, Employee shall have no further rights against the
Company hereunder, except for the right to receive, following execution of a
release and waiver in form satisfactory to the Company, (i) any unpaid Base
Salary, the value of any accrued but unused vacation, a pro-rata portion (based
on the number of days of the Bonus Year prior to the effective date of
termination) of any Performance Bonus that would be payable with respect to the
Bonus Year in which the termination occurs any stock options to which the
Employee is entitled under the Stock Option Agreement, and any and all rights
Employee may have pursuant to any stock option agreement between the Employee
and the Company, (ii) payment of Base Salary for a period of twelve (12) months
(the “Severance
Period”), payable in accordance with the normal payroll practices of the
Company, (iii) reimbursement of expenses to which Employee is entitled
under Section 2.4 hereof, and (iv) continuation of the welfare plans of the
Company as detailed in Section 2.3 hereof for the duration of the Severance
Period.

     

    (b)           Section 3.1(c) and 3.1(d)
Termination. If Employee’s employment is terminated pursuant to Sections
3.1(c) or 3.1(d) hereof, or if Employee quits employment (other than for Good
Reason) notwithstanding the terms of this Agreement, Employee or Employee’s
estate shall have no further rights against the Company hereunder, except for
the right to receive, following execution of a release and waiver in form
satisfactory to the Company, (i) any unpaid Base Salary, (ii) in the case of
Section 3.1(d) hereof, the value of any accrued but unused vacation, a pro-rata
portion (based on the number of days of the Bonus Year prior to the effective
date of termination) of any Performance Bonus that would be payable with respect
to the Bonus Year in which the termination occurs, and any stock options to
which the Employee is entitled under the Stock Option Agreement, (iii) any and
all rights Employee may have pursuant to any stock option agreements between the
Employee and the Company and (iv) reimbursement of expenses to which Employee is
entitled under Section 2.4 hereof.

     

    ARTICLE
IV

     

    CONFIDENTIALITY;
NONCOMPETITION; NONSOLICITATION

     

    4.1 Covenants Regarding
Confidential Information. Trade Secrets and Other Matters. Employee
covenants and agrees as follows:

     

    (a) Definitions.
For purposes of this Agreement, the following terms are defined as
follows:

     

    (1)
“Trade Secret”
means all information possessed by or developed for the Company or any of its
subsidiaries, including, without limitation, a compilation, program, device,
method, system, technique or process, to which all of the following apply: (i)
the information derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure or use
and (ii) the information is the subject of efforts to maintain its secrecy that
are reasonable under the circumstances.

     

    (2)
“Confidential
Information” means information, to the extent it is not a Trade Secret,
which is possessed by or developed for the Company or any of its subsidiaries
and which relates to the Company’s or any of its subsidiaries’ existing or
potential business or technology, which information is generally not known to
the public and which information the Company or any of its subsidiaries seeks to
protect from disclosure to its existing or potential competitors or others,
including, without limitation, for example: business plans, strategies, existing
or proposed bids, costs, technical developments, existing or proposed research
projects, financial or business projections, investments, marketing plans,
negotiation strategies, training information and materials, information
generated for client engagements and information stored or developed for use in
or with computers. Confidential Information also includes information received
by the Company or any of its subsidiaries from others which the Company or any
of its subsidiaries has an obligation to treat as confidential.

     

    (b) Nondisclosure of
Confidential Information. Except as required in the conduct of the
Company’s or any of its subsidiaries’ business or as expressly authorized in
writing on behalf of the Company or any of its subsidiaries, Employee shall not
use or disclose, directly or indirectly, any Confidential Information during the
period of his employment with the Company. In addition, following the
termination for any reason of Employee’s employment with the Company, Employee
shall not use or disclose, directly or indirectly, any Confidential Information.
This prohibition does not apply to Confidential Information after it has become
generally known in the industry in which the Company conducts its business. This
prohibition also does not prohibit Employee’s use of general skills and know how
acquired during and prior to employment by the Company, as long as such use does
not involve the use or disclosure of Confidential Information or Trade
Secrets.

     

    (c) Trade Secrets. During
Employee’s employment by the Company, Employee shall do what is reasonably
necessary to prevent unauthorized misappropriation or disclosure and threatened
misappropriation or disclosure of the Company’s or any of its subsidiaries’
Trade Secrets and, after termination of employment, Employee shall not use or
disclose the Company’s or any of its subsidiaries’ Trade Secrets as long as they
remain, without misappropriation, Trade Secrets.

     

    4.2 Noncompetition.

     

    (a) During Employment.
During Employee’s employment hereunder, Employee shall not engage, directly or
indirectly, as an employee, officer, director, partner, manager, consultant,
agent, owner (other than a minority shareholder or other equity interest of not
more than 1% of a company whose equity interests are publicly traded on a
nationally recognized stock exchange or over-the-counter) or in any other
capacity, in any competition with the Company or any of its
subsidiaries.

     

    (b) Subsequent to
Employment. For a two year period following the termination of Employee’s
employment for any reason or without reason, Employee shall not in any capacity
(whether in the capacity as an employee, officer, director, partner, manager,
consultant, agent or owner (other than a minority shareholder or other equity
interest of not more than 1% of a company whose equity interests are publicly
traded on a nationally recognized stock exchange or over-the-counter), directly
or indirectly advise, manage, render or perform services to or for any person or
entity which is engaged in a business competitive to that of the Company or any
of its subsidiaries within any geographical location wherein the Company or any
of its subsidiaries produces, sells or markets its goods and services at the
time of such termination or within a one-year period prior to such
termination.

     

    4.3 Nonsolicitation. For
a two year period following the termination of Employee’s employment for any
reason or without reason, Employee shall not solicit or induce any person who
was an employee of the Company or any of its subsidiaries on the date of
Employee’s termination or within three months prior to leaving his or her
employment with the Company or any of its subsidiaries.

     

    4.4 Return of Documents.
Immediately upon termination of employment, Employee will return to the Company,
and so certify in writing to the Company, all the Company’s or any of its
subsidiaries’ papers, documents and things, including information stored for use
in or with computers and software applicable to the Company’s and its
subsidiaries’ business (and all copies thereof), which are in Employee’s
possession or under Employee’s control, regardless whether such papers,
documents or things contain Confidential Information or Trade
Secrets.

     

    4.5 No Conflicts. To the
extent that they exist, Employee will not disclose to the Company or any of its
subsidiaries any of Employee’s previous employer’s confidential information or
trade secrets. Further, Employee represents and warrants that Employee has not
previously assumed any obligations inconsistent with those of this Agreement and
that employment by the Company does not conflict with any prior obligations to
third parties.

     

    4.6 Agreement on
Fairness. Employee acknowledges that: (i) this Agreement has been
specifically bargained between the parties and reviewed by Employee, (ii)
Employee has had an opportunity to obtain legal counsel to review this
Agreement, and (iii) the covenants made by and duties imposed upon Employee
hereby are fair, reasonable and minimally necessary to protect the legitimate
business interests of the Company, and such covenants and duties will not place
an undue burden upon Employee’s livelihood in the event of termination of
Employee’s employment by the Company and the strict enforcement of the covenants
contained herein.

     

    4.7 Equitable Relief and
Remedies. Employee acknowledges that any breach of this Agreement will
cause substantial and irreparable harm to the Company for which money damages
would be an inadequate remedy. Accordingly, notwithstanding the provisions of
Article V below, the Company shall in any such event be entitled to obtain
injunctive and other forms of equitable relief to prevent such breach and the
prevailing party shall be entitled to recover from the other, the prevailing
party’s costs (including, without limitation, reasonable attorneys’ fees)
incurred in connection with enforcing this Agreement, in addition to any other
rights or remedies available at law, in equity, by statute or pursuant to
Article V below.

     

    ARTICLE
V

     

    AGREEMENT
TO SUBMIT ALL EXISTING OR FUTURE DISPUTES TO BINDING ARBITRATION

     

    The
Company and Employee agree that any controversy or claim arising out of or
related to this Agreement or Employee’s employment with or termination by the
Company that is not resolved by the parties shall be settled by arbitration
administered by the American Arbitration Association under its National Rules
for the Resolution of Employment Disputes. Said arbitration shall be conducted
in Lexington, Kentucky. The parties further agree that the arbitrator may
resolve issues of contract interpretation as well as law and award damages, if
any, to the extent provided by the Agreement or applicable law. The parties
agree that the costs of the arbitrator’s services shall be borne by the Company.
The parties further agree that the arbitrator’s decision will be final and
binding and enforceable in any court of competent jurisdiction. In addition to
the A.A.A.’s Arbitration Rules and unless otherwise agreed to by the parties the
following rules shall apply:

     

    (a) Each
party shall be entitled to discovery exclusively by the following means: (i)
requests for admission, (ii) requests for production of documents, (iii) up to
15 written interrogatories (with any subpart to be counted as a separate
interrogatory), and (iv) depositions of no more than six
individuals.

     

    (b) Unless
the arbitrator finds that delay is reasonably justified or as otherwise agreed
to by the parties, all discovery shall be completed, and the arbitration hearing
shall commence within five months after the appointment of the
arbitrator.

     

    (c) Unless
the arbitrator finds that delay is reasonably justified, the hearing will be
completed, and an award rendered within 30 days of commencement of the
hearing.

     

    The
arbitrator’s authority shall include the ability to render equitable types of
relief and, in such event, any aforesaid court may enter an order enjoining
and/or compelling such actions or relief ordered or as found by the
arbitrator.

     

    The
arbitrator also shall make a determination regarding which party’s legal
position in any such controversy or claim is the more substantially correct (the
“Prevailing
Party”) and the arbitrator shall require the other party to pay the legal
and other professional fees and costs incurred by the Prevailing Party in
connection with such arbitration proceeding and any necessary court
action.

     

    Notwithstanding
the foregoing provisions of this Article V, the parties expressly agree that a
court of competent jurisdiction may enter a temporary restraining order or an
order enjoining a breach of Article IV of this Agreement without submission of
the underlying dispute to an arbitrator. Such remedy shall be cumulative and
nonexclusive, and shall be in addition to any other remedy to which the parties
may be entitled.

     

    ARTICLE
VI

     

    GENERAL
PROVISIONS

     

    6.1 Notices. Any and all
notices provided for in this Agreement shall be given in writing and shall be
deemed given to a party at the earlier of (i) when actually delivered to such
party, or (ii) when mailed to such party by registered or certified mail (return
receipt requested) or sent to such party by courier, confirmed by receipt, and
addressed to such party at the address designated below for such party as
follows (or to such other address for such party as such party may have
substituted by notice pursuant to this Section 6.1):

     

    (a)           If
to the
Company:               Tempur
World International Inc.

    1713 Jaggie Fox Way

    Lexington, KY 40511

    Attention:  Chief Executive
Officer

    

     

    

     

    (b)           If
to
Employee:                     Mr.
Dale Williams

                                    c/o Tempur-Pedic
International Inc.

    1713 Jaggie Fox Way

    Lexington, KY 40511

     

    6.2 Entire Agreement.
This Agreement supersedes in its entirety the Original Agreement and contains
the entire understanding and the full and complete agreement of the
parties.

     

    6.3 Amendment. This
Agreement may be altered, amended or modified only in a writing, signed by both
of the parties hereto. Headings included in this Agreement are for convenience
only and are not intended to limit or expand the rights of the parties hereto.
References to Sections herein shall mean sections of the text of this Agreement,
unless otherwise indicated.

     

    6.4 Assignability. This
Agreement and the rights and duties set forth herein may not be assigned by
either of the parties without the express written consent of the other party.
This Agreement shall be binding on and inure to the benefit of each party and
such party’s respective heirs, legal representatives, successors and
assigns.

     

    6.5 Severability. If any
court of competent jurisdiction determines that any provision of this Agreement
is invalid or unenforceable, then such invalidity or unenforceability shall have
no effect on the other provisions hereof, which shall remain valid, binding and
enforceable and in full force and effect, and such invalid or unenforceable
provision shall be construed in a manner so as to give the maximum valid and
enforceable effect to the intent of the parties expressed therein.

     

    6.6 Waiver of Breach. The
waiver by either party of the breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach by either
party.

     

    6.7 Governing Law:
Construction. This Agreement shall be governed by the internal laws of
the State of Kentucky, without regard to any rules of construction concerning
the party responsible for the drafting hereof.

     

    6.8 Tax
Compliance.  All payments due hereunder shall be made net of
all federal, state or local taxes required by law to be withheld with respect to
such payments and any other deductions required by law or authorized by
Employee.  If any payment otherwise due hereunder would be, when
otherwise due, subject to additional taxes and interest under Section 409A of
the Internal Revenue Code of 1986, as amended, then such payment shall be
deferred to the extent required to avoid such additional taxes and
interest.

    

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Blank]

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

      

    

    

    

    IN
WITNESS WHEREOF, the parties have executed this Agreement as of this day and
year written above.

     

    
      
         

        
          
            	 	TEMPUR WORLD,
    LLC	 
	 	 	 	 
	
                    
                       

                    

                  	
                    By:
      

                  	/s/  H.
      Thomas Bryant    	 
	 	 	Name:
      H. Thomas Bryant	 
	 	 	Title:
      President and CEO	 
	 	 	 	 

          

        

      

    

     

    
      
         

        
          
            	 	TEMPUR-PEDIC INTERNATIONAL
      INC.	 
	 	 	 	 
	
                    
                       

                    

                  	
                    By:
      

                  	/s/  H.
      Thomas Bryant   	 
	 	 	Name:
      H. Thomas Bryant	 
	 	 	Title:
      President and CEO	 
	 	 	 	 

          

        

      

    

     

     

    
      
        
          
            	 	EMPLOYEE	 
	 	 	 	 
	
                    
                       

                    

                  	
                     

                  	/s/  Dale
      E. Williams    	 
	 	 	Name:
      Dale E. Williams	 
	 	 	 	 
	 	 	 	 

          

        

      

    

      
        
          
             

             

          

           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    ATTACHMENT
TO DALE WILLIAMS AGREEMENT

     

    “LETTER
AGREEMENT”

     

    July 3, 2003

    Mr. Dale Wiliams

     

     

    Dear
Dale,

     

    On behalf
of the Board of Directors, Tom Bryant, and the Tempur World organization, I’m
pleased to present you this offer to join the company as Senior Vice President
and Chief Financial Officer. We feel very strongly that you will be a key
addition to the company’s success as we grow.

     

    The
following is a confirmation of the employment specifics as we
discussed.  Please let me know if you have any questions on any of
these items.

     

    Employment
Agreement: Pending your acceptance of the terms below, the company will prepare
an Employment and Non-Competition Agreement for your signature.  This
document contains additional specifics concerning the terms and conditions of
your employment.

     

    Position:
Senior Vice President and Chief Financial Officer, Tempur World

     

    Reports
To: This position reports directly to the Chief Executive Officer,

     

    Tempur
World

     

    Start
Date: July 7, 2003.

     

    Compensation:
Your base salary will be $225,000

     

    Annual
Performance Bonus Program: The company’s annual performance bonus is based on a
quantitative and qualitative formula approved by the Company’s Board of
Directors. Specifically, 25% Sales, 25% EBITDA and 50% Board discretion. The
formula is set to target a bonus equal to 30% of your Base Salary as of January
1st of each year.

     

    You are
eligible to participate in the 2003 plan and your award level will be prorated
to your length of employment with the company.

     

    The Sales
and EBITDA segments are based on the current prorated 2003
forecast.  Eighty percent of these targets would equal zero bonus and
100% would equal the target bonus of 30%. The bonuses are not capped i.e., if
the actual sales and EBITDA are 110% of plan, then a bonus of 110% of target
percentage would be achieved. For the discretionary element of the bonus, the
Board will weigh other items such as net working capital, free cash flow and
other intangibles.

     

    Salary
Reviews: Your Base Salary will be reviewed and be subject to adjustment by the
Board of Directors on or about January 1 of each year beginning with January 1,
2004.

     

    Equity
Incentive: 1000 stock options per Tempur World Stock Option Plan (qualified) at
a $1250 strike price (Fair Market Value to be confirmed by valuation consultant
so as to create no income to you at issuance). Options vest 25% per year for
four (4) years and are then exercisable over 10 years. The vesting schedule is
25% in the first 12 months and 6.25% per quarter thereafter. Future options may
be granted as determined by the Board of Directors of Tempur World.

     

    Auto
Allowance: You’ll receive an automobile allowance of $600.00 per
month.

     

    Salary
Continuation/Severance: Six months per the terms of your Employment
Agreement.

     

    Relocation:
Your relocation package is designed to make the transition to Lexington as
smooth as possible. It includes.

     

    
      	
              ·  

            	
              Reimbursement
      of up to 6% Real Estate Commission on the sale of your primary
      residence.

            

    

     

    
      	
              ·  

            	
              Usual
      and customary Closing Costs on the sale of your
  home.

            

    

     

    
      	
              ·  

            	
              Full
      packing and transportation of typical household goods (booked by the
      company).

            

    

     

    
      	
              ·  

            	
              Furnished
      temporary housing in Lexington for up to 90 days (booked by the
      company).

            

    

     

    
      	
              ·  

            	
              Incidental
      travel expenses.

            

    

     

    
      	
              ·  

            	
              One-time
      gross-up on the 2003 taxable portion of relocation
      reimbursements.

            

    

     

    
      	
              ·  

            	
              Home
      Commute: The company agrees to provide you bi-weekly RT travel to
      Minneapolis, per the company’s standard travel policy. All flights should
      be booked by TPI’s travel desk.

            

    

     

    Major
Company Paid Benefits:

     

    
      	
              ·  

            	
              Vacation
      - Fifteen (15) vacation days effective upon hire. Three Sick days are also
      part of the benefits package.

            

    

     

    
      	
              ·  

            	
              Company
      paid life insurance equal to three times your base salary, capped at
      $250k, ADD, short-term and long-term disability insurance.  You
      can also voluntarily buy additional Life Insurance and Long Term
      Disability coverage at attractive group
rates.

            

    

     

    
      	
              ·  

            	
              Company
      paid Health Insurance for the employee (employees currently pay $39.77 per
      biweekly pay period for employee plus spouse
      coverage).  Additionally, you can enroll in our “Section 125”,
      or Cafeteria plan.  This allows you to deduct for certain
      benefits on a Pre-Tax basis i.e., using whole
  dollars.

            

    

     

    
      	
              ·  

            	
              401K
      Retirement Plan whereby the Company will match dollar for dollar up to 3%
      of your savings and $.50 for each dollar of your savings on the 4th and
      5th %. There is a one year waiting period before participation begins. You
      will receive more information on the plan closer to your entry
      date.

            

    

     

    
      	
              ·  

            	
              Liberal
      Employee Purchase plan including a free Tempur-Pedic mattresses after 90
      days employment and again on every employment
  anniversary.

            

    

     

    
      	
              ·  

            	
              Nine
      paid holidays.

            

    

     

    Job
Description:

     

    Responsibilities:  The
Chief Financial Officer will formulate and lead the firm’s overall financial
plans and activities. This will include financial reporting and controls,
treasury, tax, investor and lender relations, strategic planning, financial
analysis, financial systems management, and budgeting. Specific responsibilities
include:

     

    
      	
              ·  

            	
              Focus
      on growing the business, optimizing existing systems, and bringing the
      financial picture into sharp focus.

            

    

     

    
      	
              ·  

            	
              Provide
      the strategic and financial leadership to position the company for a
      liquidity event, most likely through an
IPO.

            

    

     

    
      	
              ·  

            	
              Act
      as a business partner to the Chief Executive Officer and a significant
      contributor to the strategic management of the
  firm.

            

    

     

    
      	
              ·  

            	
              Work
      with the CEO in coordinating the company’s strategic planning
      process.  Ensure that efficient and accurate financial
      forecasting, planning and capital budgeting systems are in place. Direct
      the preparation of realistic operating budgets and management reports.
      Develop costing systems and coordinate critical and ongoing financial
      analysis activities of the company’s operations focusing on cost
      containment and asset maximization.

            

    

     

    
      	
              ·  

            	
              Present,
      analyze and interpret relevant financial data to the CEO, other line
      managers, and the Board of Directors. Develop financial performance
      measurements and make appropriate
  recommendations.

            

    

     

    
      	
              ·  

            	
              Develop
      and implement plans to optimize the corporation’s capital structure and
      the financial strategies to support growth and
  development.

            

    

     

    
      	
              ·  

            	
              Direct
      all treasury activities, including maintaining and expanding relationships
      with commercial and investment
banks.

            

    

     

    
      	
              ·  

            	
              Provides
      financial leadership in mergers and acquisitions, joint ventures, and
      partnerships including due diligence, deal structuring, negotiations,
      integration, etc.

            

    

     

    
      	
              ·  

            	
              Manage
      tax planning and reporting activities and provides a liaison with
      regulatory authorities.

            

    

     

    
      	
              ·  

            	
              Maintain
      a system of internal controls and audit procedures including managing the
      company’s relationship with its outside audit
  firm.

            

    

     

    
      	
              ·  

            	
              Responsible
      for the development and management of the financial organization and
      professional staff.

            

    

     

    Thank you
again, Dale. I look forward to having you join the company.

     

    To
indicate your agreement with the essential terms of our offer I would appreciate
your signing as indicated below and returning this page via fax to Hugh Murphy
at: 859-514-5778.

     

    Sincerely,

     

    

     

    Bob
Trussell, Chief Executive Officer

     

    

     

    AGREED TO
BY: ________________________ DATE: ________________________EX-10.1

Exhibit 10.1

Summary of 2008 Fiscal Year Executive Officer Bonus Plan

The purpose of the Bancinsurance Corporation (the “Company”) 2008 Fiscal Year Executive Officer
Bonus Plan (the “Plan”) is to attract, retain and motivate high quality executives and reward
executives for Company profitability. Under the Plan, each executive officer is eligible to receive
a cash bonus equal to a specified percentage of his base salary based upon the achievement of
pre-established Company and individual performance goals (with each component being weighted
differently based on the executive officer’s position with the Company). For fiscal year 2008, the
target bonus and the weighting of the Company goal and individual goal components for each named
executive officer are as follows:

	 	 	 	 	 	 	 	 	 
	 	 	Target Bonus as a % of	 	Company
	 	 	Base	 	Goal/Individual Goal
	Named Executive Officer	 	Salary(1)	 	Weighted Component
	John S. Sokol, Chairman,
Chief Executive Officer
and President
	 	 	60	%	 	 	100%/0	%
	Matthew C. Nolan, Vice
President, Chief
Financial Officer,
Treasurer and Secretary
	 	 	25	%	 	 	100%/0	%
	Daniel J. Stephan,
President of OIC Lender
Services, a division of
Ohio Indemnity Company
	 	 	50	%	 	 	50%/50	%
	Stephen J. Toth, Vice
President of Specialty
Products of Ohio
Indemnity Company
	 	 	25	%	 	 	50%/50	%

	 	 	(1) For fiscal year 2008, the base salaries for Messrs. Sokol, Nolan, Stephan and Toth
are $349,650, $210,000, $180,810 and $120,120, respectively.

Company Performance Goal Component

For fiscal year 2008, the Compensation Committee has established a 15% return on beginning
equity (“ROE”) as the target Company performance goal. Under the Plan, ROE is calculated by
dividing (1) the Company’s net income for fiscal year 2008 (excluding the after-tax effect of
expenses incurred for fiscal year 2008 relating to the Company’s ongoing SEC investigation) by (2)
total shareholders’ equity at the beginning of fiscal year 2008.

The minimum and maximum Company performance goals for fiscal year 2008 were set by the
Compensation Committee at a 7.5% ROE and a 20% ROE, respectively. Under the Plan:

	 	•	 	if ROE for fiscal year 2008 is less than 7.5%, no bonus will be awarded for the
Company goal component;

	 	•	 	if the Company achieves ROE of 7.5% for fiscal year 2008, each executive officer
will be entitled to receive a bonus equal to the product of (1) 50% of the amount of
the executive officer’s target bonus and (2) the percentage of his bonus allocated to
the Company goal component;

	 	•	 	if the Company achieves ROE of 15% for fiscal year 2008, each executive officer will
be entitled to receive a bonus equal to the product of (1) 100% of the amount of the
executive officer’s target bonus and (2) the percentage of his bonus allocated to the
Company goal component; and

	 	•	 	if the Company achieves ROE of at least 20% for fiscal year 2008, each executive
officer will be entitled to receive a bonus equal to the product of (1) 125% of the
amount of his target bonus and (2) the percentage of his bonus allocated to the Company
goal component.

If ROE for fiscal year 2008 falls between 7.5% and 15%, a straight-line schedule will be used to
determine the percentage of the amount of target bonus (ranging between 50% and 100%) each
executive officer will be entitled to receive in respect of the Company goal component.

Individual Performance Goal Component

Under the Plan, the Compensation Committee has established individual performance goals for each
applicable executive officer. For fiscal year 2008, the individual performance goals consist of
product line financial targets with respect to the product line for which the applicable executive
officer has responsibility (Daniel J. Stephan has responsibility for the Company’s lender service
product line and Stephen J. Toth has responsibility for the Company’s unemployment compensation
product line). Following the completion of the 2008 fiscal year, the Compensation Committee will
evaluate each applicable executive officer’s performance with respect to his individual performance
goals and determine his bonus relating to the individual goal component (equal up to the product of
(1) the amount of the executive officer’s target bonus and (2) the percentage of his bonus
allocated to the individual goal component).

Total Cash Bonus 

Following the 2008 fiscal year, each executive officer will be entitled to receive a cash bonus
equal to the sum of the Company performance goal component achieved and the individual performance
goal component achieved. Under the Plan, bonuses for fiscal year 2008 performance will be paid to
participants in early 2009.

Miscellaneous

Notwithstanding anything to the contrary set forth in the Plan, the Compensation Committee shall
have the right, in its sole discretion and for any reason, to reduce or eliminate the amount of any
cash bonus otherwise payable to any executive officer under the Plan.

In the event that, at any time prior to the payment date of a cash bonus under the Plan, (1) an
executive officer’s employment with the Company is terminated for any reason (whether voluntarily
or involuntarily) or (2) a “change in control event” (as such term is defined in the Treasury
Regulations promulgated under Section 409A of the Internal Revenue Code of 1986, as amended) occurs
with respect to the Company, the Compensation Committee shall have the right, in its sole
discretion and for any reason, to determine whether, and the extent to which, cash bonuses shall be
paid to any executive officer under the Plan.

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