Document:

Exhibit
10.26

 

DOUGLAS DYNAMICS, INC.

 

AMENDED AND RESTATED 2004 STOCK INCENTIVE PLAN

 

SECOND AMENDED AND RESTATED

 

MANAGEMENT NON-QUALIFIED OPTION AGREEMENT

 

This Second Amended and
Restated Non-Qualified Stock Option Agreement (“Agreement”) is made and entered
into as of                     ,
2010 by and between Douglas Dynamics, Inc., a Delaware corporation (the “Company”),
and the person named below as Optionee.

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE,
AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THAT ACT AND UNDER APPLICABLE STATE SECURITIES LAW OR THE
COMPANY SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH
SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.  THE
SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS ALSO SUBJECT TO COMPLIANCE
WITH THE TERMS AND CONDITIONS OF THAT CERTAIN SECOND AMENDED AND RESTATED
SECURITYHOLDERS AGREEMENT, DATED AS OF JUNE 30, 2004, AS SUPPLEMENTED,
MODIFIED AND AMENDED FROM TIME TO TIME, AMONG THE COMPANY AND THE
SECURITYHOLDERS SIGNATORY THERETO, A COPY OF WHICH AGREEMENT IS AVAILABLE FOR
INSPECTION DURING REGULAR BUSINESS HOURS AT THE PRINCIPAL EXECUTIVE OFFICES OF
THE COMPANY.

 

WHEREAS, Optionee is an
eligible participant in the Company’s Amended and Restated 2004 Stock Incentive
Plan (the “Plan”); and

 

WHEREAS, the Company and
Optionee entered into that certain Management Non-Qualified Stock Option
Agreement dated as of March 31,
2004 (as subsequently amended and restated, the “Original Agreement”) pursuant
to which Optionee was granted an option to purchase shares of the Company’s Common
Stock, $0.01 par value per share (the “Common Stock”), on the terms and
conditions set forth therein; and

 

WHEREAS, the Company and
Optionee desire to amend and restate the terms of the Original Agreement to, in
addition to certain ministerial changes, delete the ability of Optionee to use
a promissory note to pay any portion of the Exercise Price (as defined below) and
provide that the use of “net exercise” shall be at the sole discretion of the Committee.

 

 

NOW, THEREFORE, in
consideration of the foregoing recitals and the covenants set forth herein, the
parties hereto hereby agree as follows:

 

1.                                       Grant
of Option; Certain Terms and Conditions. 
The Company hereby grants to Optionee, and Optionee hereby accepts, as
of the Date of Grant, an option to purchase the number of shares of Common
Stock indicated below (the “Option Shares”) at the Exercise Price per share
indicated below, which option shall expire at 5:00 o’clock p.m.,
California time, on the Expiration Date indicated below and shall be subject to
all of the terms and conditions set forth in this Agreement (the “Option”).  On each of the first, second, third, fourth
and fifth anniversaries of March 31, 2004, the Option shall become
exercisable to purchase, and shall vest with respect to, that number of Option
Shares (rounded to the nearest whole share) equal to the total number of Option
Shares multiplied by the Vesting Rate indicated below.

 

	
  Optionee:

  	
   

  	
  James L. Janik

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  March 31,
  2004

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Number of shares
  purchasable:

  	
   

  	
  19,444

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exercise Price per
  share:

  	
   

  	
  $100.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  March 30,
  2014

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Vesting Rate:

  	
   

  	
  20% per year on
  a cumulative basis

  	
   

  

 

The Option is not
intended to qualify as an incentive stock option under Section 422 of the
Internal Revenue Code (an “Incentive Stock Option”).

 

2.                                       Acceleration
and Termination of Option.

 

(a)                                  Change
of Control and Other Events Causing Acceleration of Option.  All Options shall become fully exercisable
immediately prior to a Change of Control or the dissolution or liquidation of
the Company while the Optionee is employed by the Company.  In addition, the Committee, in its sole
discretion, may accelerate the exercisability of the Option at any time and for
any reason.

 

(b)                                 Termination
of Employment.

 

(i)                                     Termination
With Cause.  In the event that
Optionee shall cease to be an employee of the Company or any of its
subsidiaries (such event shall be referred to herein as Optionee’s “Termination”)
for reason of Cause (as defined below), all unexercised Options (whether vested
or unvested) shall terminate as of the date of such Termination.

 

(ii)                                  Retirement;
Death or Disability.  In the event
that Optionee shall retire, die or become Disabled (as defined below), then (A) the
portion of the Option that has not vested on or prior to the date of such
Termination shall terminate as of the 

 

2

 

date of such
Termination and (B) the vested portion of the Option shall terminate as of
the date that is twenty-four (24) months following the date of such
Termination.

 

(iii)                               Voluntary
Termination for Material Breach; Termination Without Cause.  In the event of a Termination by Optionee of
his employment for a Material Breach (as defined below) or in the event of a
Termination of Optionee by the Company without Cause, then (A) the portion
of the Option that has not vested on or prior to the date of such Termination
shall terminate as of the date of such Termination; provided,
however, that the unvested portion of the Option that would otherwise
have vested at the end of the twelve (12) month period in which the Termination
by Optionee of his employment or Termination of Optionee by the Company without
Cause occurs, shall vest immediately on the date of such Termination on a pro
rata basis according to the number of months in which Optionee has been
employed during such 12-month period, and (B) the vested portion of the
Option shall terminate as of the date that is twenty-four (24) months following
the date of such Termination.

 

(iv)                              Voluntary
Termination for Any Reason Other than Material Breach.  In the event of a Termination by Optionee of
his employment for any reason other than a Material Breach (as defined below),
then (A) the portion of the Option that has not vested on or prior to the
date of such Termination shall terminate as of the date of such Termination and
(B) the vested portion of the Option shall terminate as of the date that
is one hundred eighty (180) days following the date of such Termination.

 

(c)                                  Other
Events Causing Termination of Option. 
Notwithstanding anything to the contrary in this Agreement, the Option
shall terminate (unless the terms of the transaction giving rise to such
termination provide otherwise) upon the consummation of the dissolution or
liquidation of the Company or a Change of Control, or, if later, the thirtieth
(30th) day following the first date upon which either of such events shall have
been approved by both the Board and the stockholders of the Company; provided however, that no such termination shall occur until
the Company shall have provided the Optionee with reasonable notice of such
pending termination and Optionee shall have been provided reasonable
opportunity to exercise the Option, as such Option may be accelerated pursuant
to Section 2(a) hereof.

 

3.                                       Adjustments.  In the event that the outstanding securities
of the class then subject to the Option are increased, decreased or exchanged
for or converted into cash, property and/or a different number or kind of
securities, or cash, property and/or securities are distributed in respect of
such outstanding securities, in either case as a result of a reorganization,
merger, consolidation, recapitalization, reclassification, dividend (other than
a regular, quarterly cash dividend) or other distribution, stock split, reverse
stock split or the like, or in the event that substantially all of the property
and assets of the Company are sold, then, unless (i) such event shall cause the
Option to terminate pursuant to Section 2(c) hereof, or (ii) the terms
of such transaction provide otherwise, the Committee shall make appropriate and
proportionate adjustments in the number and type of shares or other securities
or cash or other property that may thereafter be acquired upon the exercise of
the Option; provided,  however,
that any such adjustments in the Option shall be made without changing the
aggregate Exercise Price of the then unexercised portion of the Option.

 

3

 

4.                                       Exercise.  The Option shall be exercisable during
Optionee’s lifetime only by Optionee or by his or her guardian or legal
representative, and after Optionee’s death only by the person or entity
entitled to do so under Optionee’s last will and testament or applicable
intestate law.  The Option may only be
exercised by the delivery to the Company of a written notice of such exercise,
which notice shall specify the number of Option Shares to be purchased (the “Purchased
Shares”) and the aggregate Exercise Price for such shares, together with payment
in full of such aggregate Exercise Price in cash or by check payable to the
Company; provided, however, that payment of such
aggregate Exercise Price may instead be made, in whole or in part, by (i) the
delivery to the Company of a certificate or certificates representing shares of
Common Stock, duly endorsed or accompanied by a duly executed stock powers,
which delivery effectively transfers to the Company good and valid title to
such shares, free and clear of any pledge, commitment, lien, claim or other
encumbrance (such shares to be valued on the basis of the aggregate Fair Market
Value (as defined in the Plan) thereof on the date of such exercise), or (ii)
at the sole discretion of the Committee, by a reduction in the amount of
Purchased Shares or other property otherwise issuable pursuant to such Option
(such reduction to be valued on the basis of the aggregate Fair Market Value,
on the date of exercise, of the additional Purchased Shares that would have
been delivered to the Optionee upon exercise of the Option), provided that the
Company is not then prohibited from purchasing or acquiring such shares of
Common Stock.

 

5.                                       Securityholders
Agreement.  As of the Date of Grant,
the Optionee shall execute and agree to be bound by the terms of that certain Amended
and Restated Securityholders Agreement among the Company and certain of its
securityholders, dated as of April 12, 2004, as amended from time to time
(the “Securityholders Agreement”).

 

6.                                       Payment
of Withholding Taxes.  If the Company
becomes obligated to withhold an amount on account of any tax imposed as a
result of the exercise of the Option, including, without limitation, any
federal, state, local or other income tax, or any F.I.C.A., state disability
insurance tax or other employment tax, then Optionee shall, on the first day
upon which the Company becomes obligated to pay such amount to the appropriate
taxing authority, pay such amount to the Company in cash or by check or other
property acceptable to the Secretary of the Company in his sole discretion;
and, if the Optionee fails to make such payment, the Company is authorized by
the Optionee to withhold from any payments then or thereafter payable to the
Optionee, any such amounts or the Company may otherwise refuse to issue or
transfer any shares otherwise required to be issued or transferred pursuant to
the terms hereof.  The Committee may, in
its sole discretion, allow the Optionee to pay any such amounts through the
surrender of whole shares of Common Stock or by having the Company withhold whole
shares of Common Stock otherwise issuable upon the exercise of this
Option.  Any such shares surrendered or
withheld shall be valued at their market value, determined by such method as
the Secretary of the Company in his sole discretion shall determine, equal to
the sums required to be withheld as of the date on which the amount of tax to
be withheld is determined.

 

7.                                       Notices.  All notices and other communications required
or permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed given if delivered personally or five days after mailing by certified
or registered mail, postage prepaid, return receipt requested, to the Company
c/o Gibson, Dunn & Crutcher LLP, 333 S. Grand Avenue, Los Angeles,
California 90071, Attention: Bruce D. Meyer, Esq., or to Optionee at the
address set 

 

4

 

forth beneath his or her
signature on the signature page hereto, or at such other addresses as
Optionee may designate by written notice in the manner aforesaid.

 

8.                                       Compliance
with Legal Requirements.

 

(a)                                  No
Option Shares shall be issued or transferred pursuant to this Agreement unless
and until all legal requirements applicable to such issuance or transfer have,
in the opinion of counsel to the Company, been satisfied.  Such requirements may include, but are not
limited to, registering or qualifying such Option Shares under any state or
federal law, satisfying any applicable law relating to the transfer of unregistered
securities or demonstrating the availability of an exemption from applicable
laws, placing a legend on the Option Shares to the effect that they were issued
in reliance upon an exemption from registration under the Securities Act of
1933, as amended (the “Act”), and may not be transferred other than in reliance
upon Rule 144 or Rule 701 promulgated under the Act, if available, or
upon another exemption from the Act, or obtaining the consent or approval of
any governmental regulatory body.  The
Company shall use its best efforts to comply with all legal requirements
applicable to the issuance or transfer of Option Shares.

 

(b)                                 The
Optionee understands that the Company intends for the offering and sale of
Option Shares to be effected in reliance upon Rule 701 or another
available exemption from registration under the Act, and that the Company is
under no obligation to register for resale the Option Shares issued upon
exercise of the Option, subject to the Securityholders Agreement.  In connection with any such issuance or
transfer, the person acquiring the Option Shares shall, if requested by the
Company, provide information and assurances satisfactory to counsel to the
Company with respect to such matters as the Company reasonably may deem
desirable to assure compliance with all applicable legal requirements.

 

9.                                       Nontransferability.  Neither the Option nor any interest therein
may be Transferred in any manner other than by will or the laws of descent and
distribution.

 

10.                                 Plan.  The Option is granted pursuant to the Plan,
as in effect on the Date of Grant, and is subject to all the terms and
conditions of the Plan, as the same may be amended from time to time; provided, however, that no such amendment shall deprive
Optionee, without his or her consent, of the Option or of any of Optionee’s
rights under this Agreement.  The
interpretation and construction by the Committee of the Plan, this Agreement,
the Option and such rules and regulations as may be adopted by the
Committee for the purpose of administering the Plan shall be final and binding
upon Optionee.  Until the Option shall
expire, terminate or be exercised in full, the Company shall, upon written
request therefor, send a copy of the Plan, in its then-current form, to
Optionee or any other person or entity then entitled to exercise the Option.

 

11.                                 Stockholder
Rights.  No person or entity shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
any Option Shares until the Option shall have been duly exercised to purchase
such Option Shares in accordance with the provisions of this Agreement.

 

5

 

12.                                 Employment
Rights.  No provision of this
Agreement or of the Option granted hereunder shall (a) confer upon
Optionee any right to be or continue, as the case may be, in the employ of the
Company or any of its subsidiaries, (b) affect the right of the Company
and each of its subsidiaries to terminate the employment of Optionee, with or
without cause, or (c) confer upon Optionee any right to participate in any
employee welfare or benefit plan or other program of the Company or any of its
subsidiaries other than the Plan.  Optionee hereby acknowledges and agrees that the Company and each of
its subsidiaries may terminate the employment of Optionee at any time and for any
reason, or for no reason, unless Optionee and the Company or such subsidiary
are parties to a written employment agreement that expressly provides
otherwise.

 

13.                                 Governing
Law.  This Agreement and the Option
granted hereunder shall be governed by and construed and enforced in accordance
with the laws of the State of Delaware without reference to choice or conflict
of law principles.

 

14.                                 Definitions.

 

An “Affiliate”
of a specified Person means a Person that controls, is controlled by, or is
under common control with, the specified Person, and in this context, “control”,
“controls” and “controlled” mean the direct or indirect power to
direct the management and policies or affairs of a Person through the ownership
of voting securities or by contract or otherwise and, in the case of a limited
partnership, shall include, but shall not be limited to, all of the limited
partnership’s general partners and their respective Affiliates.

 

“Ares” means Ares
Corporate Opportunities Fund, L.P., a Delaware limited partnership.

 

“Ares Purchasers”
means Ares and its Affiliates.

 

“Aurora Purchasers”
means Aurora Equity Partners II L.P., a Delaware limited partnership, Aurora
Overseas Equity Partners II, L.P., a Cayman Islands limited partnership, and
their respective Affiliates and co-investors.

 

“Beneficial Owner”
has the meaning attributed to it in Rules 13d-3 and 13d-5 of the rules and
regulations promulgated by the Securities and Exchange Commission (the “Commission”)
under the Securities Exchange Act of 1934 (as in effect on the date hereof),
whether or not applicable, except that a Person shall be deemed to have “beneficial
ownership” of any securities that such Person has the right to acquire, whether
or not such right is exercisable immediately or within 60 days after the date
as of which such determination is being made. 
“Beneficially Owned” and “Beneficial Ownership” shall have
correlative meanings to the term “Beneficial Owner.”

 

“Board”
means the Board of Directors of the Company.

 

“Capital Stock”
means any and all shares, interests, participations or other equivalents  (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation), including, without limitation, partnership interests and membership
interests, and any and all warrants, rights or options to purchase or other
arrangements or rights to acquire any of the foregoing.

 

6

 

“Cause”
means (i) if a definition of “Cause” is included in the then effective
employment agreement between the Optionee and the Company (the “Employment
Agreement”), such definition, or (ii) if no such definition exists, the
occurrence or existence of any of the following with respect to Optionee, as
determined by a majority of the disinterested directors of the Board:  (a) a material breach by Optionee of any
of his obligations under the Employment Agreement, provided,
however, that Cause shall not be deemed to exist under this clause (a) until
the Company shall have given written notice specifying the claimed material
breach and Optionee fails to correct the claimed breach within thirty (30) days
after the receipt of the applicable notice; (b) any transaction by
Optionee that represents direct or indirect self-dealing with the Company or
any of its Affiliates that was not approved in advance by a majority of the
disinterested directors of the Board, provided, however,
that Cause shall not be deemed to exist under this clause (b) until the
Company shall have given written notice specifying the claimed self-dealing and
Optionee fails to correct the claimed self-dealing within thirty (30) days
after the receipt of the applicable notice; (c) the repeated material
breach by Optionee of any material duty referred to in clause (a) or (b) above
as to which at least two (2) written notices have been given pursuant to
such clause (a) or (b), (d) any act of dishonesty, misappropriation,
embezzlement, fraud or similar conduct involving the Company or any of its
Affiliates; (e) the conviction or the plea of nolo contendere or the
equivalent in respect of a felony involving moral turpitude; (f) the
intentional infliction by Optionee of any damage of a material nature to any
property of the Company or any of its Affiliates; or (g) the repeated use
of any controlled substance or alcohol or any other non-controlled substance
which, in any case described in this clause (f), the Board reasonably
determines renders the Optionee unfit to serve in his capacity as an officer or
employee of the Company or its Affiliates.

 

“Change of Control”
means, at any time, (i) the Aurora Purchasers and Ares Purchasers shall
cease to collectively beneficially own and control at least 51%, on a fully
diluted basis, of the outstanding Capital Stock of the Company entitled
(without regard to the occurrence of any contingency) to vote for the election
of members of the Board (or similar governing body) of the Company, unless the
Aurora Purchasers and Ares Purchasers collectively beneficially own and control
(a) at least 35%, on a fully diluted basis, of the outstanding Capital
Stock of the Company entitled (without regard to the occurrence of any
contingency) to vote for the election of members of the Board (or similar
governing body) of the Company and (b) on a fully diluted basis, more of
the outstanding Capital Stock of the Company entitled (without regard to the
occurrence of any contingency) to vote for the election of members of the Board
(or similar governing body) of the Company than any other Person or “group”
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act); (ii) any
Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the
Exchange Act) other than the Aurora Purchasers and Ares Purchasers collectively
shall have obtained the power (whether or not exercised) to elect a majority of
the members of the Board (or similar governing body) of the Company; (iii) the
Company shall cease to beneficially own and control 100% on a fully diluted
basis of the economic and voting interests in the Capital Stock of Douglas
Dynamics, L.L.C.; or (iv) the majority of the seats (other than vacant
seats) on the Board (or similar governing body) of the Company cease to be
occupied by Persons who either (a) were members of the Board of the
Company on the Initial Date or (b) were nominated for election by the
Board of the Company, a majority of whom were directors on the Initial Date or
whose election or nomination for election was previously approved by a majority
of such directors.

 

7

 

“Committee” means
a committee of the Board administering the Plan pursuant to the terms of the
Plan, or in the absence of such a committee, the Board itself.

 

“Disabled” or “Disability”
means, if a definition of “Disabled” or “Disability” is included in the
Employment Agreement, such definition or, if no such definition exists, the
occurrence of an event or events that renders Optionee unable to perform the
essential functions of his position, even with reasonable accommodation.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, and
any successor statute.

 

“Initial Date”
means the date of the filing of the Second Amended and Restated Certificate of
Incorporation of the Company with the Secretary of State of the State of
Delaware.

 

“Material Breach”
means the definition of “Material Breach” included in the Employment Agreement.

 

“Person” means a
company, a corporation, an association, a partnership, a limited liability
company, an organization, a joint venture, a trust or other legal entity, an
individual, a government political subdivision thereof or a governmental
agency.

 

“Transfer” means
any sale, exchange, assignment, transfer, pledge, mortgage, hypothecation,
gift, grant, encumbrance or other disposition of any kind, whether voluntary,
involuntary or by operation of law and whether direct or indirect by transfer
of any interest in the subject property or otherwise.

 

15.                                 Optionee
Address.  Optionee represents that
the address set forth on the signature page hereto is Optionee’s true and
correct address, and acknowledges that the Company is relying upon such
representations for securities law purposes.

 

8

 

IN WITNESS WHEREOF, the
Company and Optionee have duly executed this Agreement as of date set forth
above.

 

	
   

  	
  DOUGLAS DYNAMICS, INC.,

  
	
   

  	
    a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
      Name:

  	
   

  
	
   

  	
      Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  James L. Janik

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Street Address

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  City, State and Zip Code

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Social Security Number

  
				

 

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  Exhibit 10.43    
    

 
 

  THE AMENDED AND RESTATED
  SEALY CORPORATION BONUS PLAN    
    

        Sealy Corporation (the "Company") hereby adopts the Amended and Restated Sealy
Corporation Bonus Plan, as it may be amended from time to time (the "Plan") for the benefit of certain employees and subject to the terms and provisions
set forth below.

1.     Purpose of the Plan

The
Plan is intended to: (i) attract and retain employees in key positions of the Company and any other Service Recipient (as defined below) (collectively, the "Sealy
Group"); (ii) motivate Participants (as defined below) toward achieving the Company's objectives; and (iii) reward Participants for their contributions to the
success of the Sealy Group. 

2.     Definitions

The
following capitalized terms used in the Plan have the respective meanings set forth in this Section: 

        (a)   "Board" shall mean the Board of Directors of the Company. 

        (b)   "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor thereto. 

        (c)   "Committee" shall mean the Compensation Committee of the Board (or a subcommittee thereof), which Committee shall, to the
extent an award granted hereunder is intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, be constituted of at least two members who satisfy
the definition of "outside director" within the meaning of Section 162(m) of the Code. 

        (d)   "Covered Employee" shall have the meaning set forth in Section 162(m) of the Code. 

        (e)   "Disability" shall mean either a disability under the Social Security Act or under the long term disability program
provided by the Company. 

        (f)    "Participant" shall mean each exempt salaried employee of the Sealy Group whom the Committee designates as a participant
under the Plan in accordance with Section 4 of the Plan. 

        (g)   "Performance Period" shall mean each fiscal year or multi-year cycle, as determined by the Committee. 

        (h)   "Retirement" shall mean, unless otherwise agreed by the Company (or any member of the Sealy Group) in a written
employment agreement or employment letter with such Participant, the Participant's retirement from the Company or any other member of the Sealy Group meeting either of the following criteria:
(a) the Participant is at least 65 years of age or (b) the Participant is at least 62 years of age with at least
10 years of service with the Sealy Group. 

        (i)    "Section 162(m) of the Code" shall mean Section 162(m) of the Code and the regulations, guidance and
pronouncements promulgated thereunder. 

        (j)    "Section 409A of the Code" shall mean Section 409A of the Code and the rules, regulations, guidance and
pronouncements promulgated thereunder. 

        (k)   "Service Recipient" shall mean the Company, any of its subsidiaries, or any of its affiliates that satisfies the
definition of "service recipient" within the meaning of Treasury Regulation Section 1.409A-1 (or any successor regulation), with respect to which the person is a "service provider"
(within the meaning of Treasury Regulation Section 1.409A-1 (or any successor regulation). 

1

 

        (l)    "Share" shall mean a share of Class A common stock, par value $0.01 per share, of the Company, which may be
authorized but unissued, or issued and reacquired. 

3.     Administration

        (a)   The
Plan shall be administered, operated and interpreted by the Committee, to the extent reasonably possible, in a manner which would be expected to cause any award
intended to be qualified as performance-based compensation under Section 162(m) of the Code to so qualify. The Committee shall establish the performance objectives for any Performance Period in
accordance with Section 5 and certify whether and to what extent such performance objectives have been obtained. Any determination made by the Committee under the Plan shall be final,
conclusive and binding on any member of the Sealy Group, any Participant and any other person dealing with the Plan. 

        (b)   The
Committee may employ such legal counsel, consultants and agents (including counsel or agents who are employees of a member of the Sealy Group) as it may deem
desirable for the administration of the Plan and may rely upon any opinion received from any such counsel, consultant or agent and any computation received from such consultant or agent. All expenses
incurred in the administration of the Plan, including, without limitation, for the engagement of any counsel, consultant or agent, shall be paid by the Company. No member or former member of the Board
or the Committee shall be liable for any act, omission, interpretation, construction or determination made in connection with the Plan other than as a result of such individual's willful misconduct. 

        (c)   The
Committee may delegate its authority under this Plan; provided that, the Committee shall in no event delegate its authority with respect to the compensation of the
Chief Executive Officer of the Company, the four most highly compensated executive officers, or such other Covered Employees of the Company as may be determined under Section 162(m) of the
Code, or any other individual whose compensation the Board or Committee reasonably believes may become subject to Section 162(m) of the Code. 

4.     Participation

Participants
in the Plan are selected during each Performance Period by the Committee from exempt salaried employees of the Sealy Group. Participants are assigned to a bonus group (each, a
"Group") at the sole discretion of the Committee, with groupings generally as follows: 

 

 

			
	Group 8:	 	Selected Senior Company Executives
	Group 7:	 	Senior Company Executives
	Group 6:	 	Corporate and Regional Sales & Operations Vice Presidents
	Group 5:	 	Other Senior Management
	Group 4:	 	Plant Managers, Sales Managers
	Group 3:	 	Other Middle Management
	Group 2:	 	Senior Professionals and Plant Supervisors
	Group 1:	 	Selected Exempt Employees

 

         Non-exempt
employees (i.e., employees eligible for overtime) and sales representatives of the Sealy Group shall not be
eligible to participate in the Plan. Participants may be added or have their Group changed during a Performance Period on a pro-rated basis at the discretion of the Committee. 

5.     Bonuses

        (a)    Performance Criteria.    No later than 90 days after each Performance Period begins (or such other date
as may be required or permitted under Section 162(m) of the Code), the Committee shall establish the performance objective or objectives that must be satisfied in order for a Participant to
receive a bonus for each such Performance Period. Any such performance objectives will be based upon 

2

 

the
relative or comparative achievement of one or more of the following criteria, as determined by the Committee: (i) consolidated earnings before or after taxes (including earnings before
interest, taxes, depreciation and amortization); (ii) net income; (iii) operating income; (iv) earnings per Share; (v) book value per Share; (vi) return on
shareholders' equity; (vii) expense management; (viii) return on investment; (ix) improvements in capital structure; (x) profitability of an identifiable business unit or
product; (xi) maintenance or improvement of profit margins; (xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow;
(xvii) working capital; (xviii) return on assets; (xix) total shareholder return; (xx) enterprise value; (xxi) total business return; (xxii) return on
invested capital; and (xxiii) return on investment. The foregoing criteria may relate to the Company, one or more of the members of the Sealy Group or one or more of their respective divisions
or units, or any combination
of the foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group companies or indices, or any combination thereof, all as the Committee shall determine. 

        The
performance objective(s) established by the Committee will be established at the following achievement levels: 

	(i)
	Maximum shall be the goal assigned to each performance objective that provides a bonus payment of two
(2) times the target payment amount;

	(ii)
	Target shall be the is goal assigned to each performance objective that provides a bonus payment at the
target payment level; and

	(iii)
	Minimum shall be the goal assigned to each performance objective that must be achieved prior to any bonus
payment. 

        The
Committee may adjust, upward or downward, the performance objective(s) in respect of a given Performance Period to reflect: 

	(i)
	"Extraordinary
Items" as defined by Accounting Principles Board Opinion No. 30;

	(ii)
	Any
financial impact of new accounting pronouncements; and

	(iii)
	Any
other items approved by the Board or the Committee; 

provided,
that such adjustments may only apply with respect to bonuses payable to Covered Employees to the extent permitted by Section 162(m) of the Code, to the extent that such bonuses are
intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code. 

        (b)    Target Incentive Bonuses.    No later than 90 days after each Performance Period begins (or such other
date as may be required or permitted under Section 162(m) of the Code), the Committee shall establish target incentive bonuses for each individual Participant. Unless otherwise determined by
the Committee in its sole and absolute discretion, the percentage of a Participant's annual rate of base salary to be used in the bonus award calculation for each Group shall increase 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 Committee 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	%

 

 3

 
 
 Subject
to Sections 5(e)–5(i) below and unless otherwise determined by the Committee in its sole discretion, bonus awards under the Plan will be calculated as a percentage of a
Participant's weighted average annual rate of base salary in effect for the Performance Period for which a bonus is payable. 

        (c)    Maximum Amount Payable.    As soon as practicable after the applicable Performance Period ends but in no event
later than February 25th of the year immediately following the fiscal year in respect of which bonuses under the Plan may be payable, the Committee shall
(x) determine (i) whether and to what extent any of the performance objectives established for the relevant Performance Period under Section 5(a) have been satisfied and
(ii) for each Participant who is employed by a member of the Sealy Group through the last day of the applicable Performance Period, except as otherwise provided for herein, the actual bonus to
which such Participant shall be entitled, taking into consideration the extent to which the performance objectives have been met, and (y) cause such bonus to be paid to such Participant in
accordance with Section 6. Any provision of this Plan notwithstanding, in no event shall any Participant receive a bonus under this Plan in respect of any fiscal year of the Company in excess
of $2.5 million. 

        (d)    Negative Discretion.    Notwithstanding anything else contained in Section 5(c) to the contrary, the
Committee shall have the right, in its absolute discretion, (i) to reduce or eliminate the amount otherwise payable to any Participant under Section 5(c) based on individual performance
or any other
factors that the Committee, in its discretion, shall deem appropriate and (ii) to establish rules or procedures that have the effect of limiting the amount payable to each Participant to an
amount that is less than the maximum amount otherwise authorized under Section 5(c). 

        (e)    Death/Disability/Retirement.    To the extent permitted under Section 162(m) of the Code if an award
granted hereunder is intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, if a Participant dies or terminates employment due to Disability or
Retirement, in each case, prior to the last day of a Performance Period for which a bonus is payable hereunder, such Participant may receive an annual bonus equal to the bonus otherwise payable to
such Participant based upon actual Company performance for the applicable Performance Period, multiplied by a fraction, the numerator of which is the number of days that have elapsed during the
Performance Period in which the Participant's death or termination due to Disability or Retirement occurs prior to and including the date of the Participant's death or termination due to Disability or
Retirement and the denominator of which is the total number of days in the Performance Period. In addition, if such an event occurs in the calendar year in which the Performance Period begins, the
foregoing pro-ration shall be calculated using the Participant's weighted average annual rate of base salary in effect for the fiscal year in which such termination occurs and applying the
target percentage (i.e., Minimum, Target or Maximum) applicable based upon the Company's actual performance for the applicable Performance Period. 

        (f)    Other Termination of Employment.    Unless otherwise determined by the Committee and except as may otherwise be
provided in Section 5(e) above, no bonuses shall be payable under this Plan to any Participant whose employment terminates prior to the end of the applicable Performance Period. 

        (g)    Partial Performance Period.    To the extent permitted under Section 162(m) of the Code if an award
granted hereunder is intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, if a Participant is hired or rehired by a member of the Sealy Group
after the beginning of a Performance Period, but prior to November 1 during such Performance Period for which a bonus is payable hereunder, such Participant may receive an annual bonus equal to
the bonus otherwise payable to such Participant based upon actual Company performance for the applicable Performance Period, multiplied by a fraction, the numerator of which is the number of days of
active employment with the Sealy Group during the Performance Period and the denominator of which is the total number of days in the Performance Period. 

4

 

        (h)    Leave of Absence.    To the extent permitted under Section 162(m) of the Code if an award granted
hereunder is intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, if a Participant experiences 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 during a Performance Period for which a bonus is payable hereunder, such Participant may
receive an annual bonus equal to the bonus otherwise payable to such Participant based upon actual Company performance for the applicable Performance Period, multiplied by a fraction, the numerator of
which is the number of days of active employment with the Sealy Group during the Performance Period and the denominator of which is the total number of days in the Performance Period. 

        (i)    Transfers of Employment.    To the extent permitted under Section 162(m) of the Code if an award granted
hereunder is intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code, a Participant who is hired, transferred or promoted during a Performance
Period for which a bonus is payable hereunder, will receive a pro-rated bonus based upon the number of days worked in each position during the Performance Period and at each
location/segment and in each Group. Hires, transfers or promotions which occur after October 31 of a Performance Period shall not take effect for bonus purposes until the next Performance
Period, if any. 

6.     Payment

        (a)    In General.    Except as otherwise provided hereunder, payment of any bonus amount determined under
Section 5 shall be made to each Participant on February 25th of the year immediately following the fiscal year in respect of which the applicable bonuses are
payable, after the Committee certifies that one or more of the applicable performance objectives have been attained or, in the case of any bonus payable under the provisions of Section 5(d),
after the Committee determines the amount of any such bonus; provided, however, that in any event all payments made hereunder shall be in accordance with the requirements of Section 409A of the
Code. 

        (b)    Form of Payment.    All bonuses payable under this Plan shall be payable in a cash lump sum payment, unless
otherwise provided by the Committee. 

7.     General Provisions

        (a)    Effectiveness of the Plan.    The Plan shall become effective on the date on which it is adopted by the Board,
subject to the approval of the shareholders of the Company. The Plan shall remain in effect until such time as it is terminated by the Board or the Committee. 

        (b)    Amendment and Termination.    The Board or the Committee may at any time amend, suspend, discontinue or
terminate the Plan; provided, however, no such action shall be effective without approval by the
shareholders of the Company to the extent necessary to continue to qualify the amounts payable hereunder to Covered Employees as under Section 162(m) of the Code, if such amounts are otherwise
intended by the Committee to be so qualified. 

        (c)    Designation of Beneficiary.    Each Participant may designate a beneficiary or beneficiaries (which beneficiary
may be an entity other than a natural person) to receive any payments which may be made following the Participant's death. Such designation may be changed or canceled at any time without the consent
of any such beneficiary. Any such designation, change or cancellation must be made in a form approved by the Committee and shall not be effective until received by the Committee. If no beneficiary has
been named, or the designated beneficiary or beneficiaries shall have predeceased the Participant, the beneficiary shall be the Participant's spouse or, if no spouse survives the Participant, the
Participant's estate. If a Participant designates more than one beneficiary, the rights of such beneficiaries shall be payable in equal shares, unless the Participant has designated otherwise. 

5

 

        (d)    No Right to Continued Employment or Awards.    Nothing in this Plan shall be construed as conferring upon any
Participant any right to continue in the employment of any member of the Sealy Group. No Participant shall have any claim to be granted any award, and there is no obligation for uniformity of
treatment of Participants or beneficiaries. The terms and conditions of awards and the Committee's determinations and interpretations with respect thereto need not be the same with respect to each
Participant (whether or not the Participants are similarly situated). 

        (e)    No Limitation on Corporate Actions.    Nothing contained in the Plan shall be construed to prevent any member
of the Sealy Group from taking any corporate action which is deemed by it to be appropriate or in its best interest, whether or not such action would have an adverse effect on any awards made under
the Plan. No employee, beneficiary or other person shall have any claim against any member of the Sealy Group as a result of any such action. 

        (f)    Nonalienation of Benefits.    Except as expressly provided herein, no Participant or beneficiary shall have the
power or right to transfer, anticipate, or otherwise encumber the Participant's interest under the Plan. The Company's obligations under this Plan are not assignable or transferable except to
(i) a corporation which acquires all or substantially all of the Company's assets or (ii) any corporation into which the Company may be merged or consolidated. The provisions of the Plan
shall inure to the benefit of each Participant and the Participant's beneficiaries, heirs, executors, administrators or successors in interest. 

        (g)    Withholding.    A Participant may be required to pay to a member of the Sealy Group and each member of the
Sealy Group shall have the right and is hereby authorized to withhold from any payment due under this Plan or from any compensation or other amount owing to the Participant, applicable withholding
taxes with respect to any payment under this Plan and to take such action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such withholding taxes. 

        (h)    Severability.    If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue
in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not contained in the Plan. 

        (i)    Governing Law.    The Plan shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflicts of laws. 

        (j)    Headings.    Headings are inserted in this Plan for convenience of reference only and are to be ignored in a
construction of the provisions of the Plan. 

        (k)    Compliance with Section 409A of the Code.    The Plan is intended to comply with Section 409A of
the Code and will be interpreted in a manner intended to comply with Section 409A of the Code. Notwithstanding anything herein to the contrary, if at the time of the Participant's termination
of employment with any Service Recipient the Participant is a "specified employee" as defined in Section 409A of the Code, and the deferral of the commencement of any payments or benefits
otherwise payable hereunder as a result of such termination of service is necessary in order to prevent the imposition of any accelerated or additional tax under Section 409A of the Code, then
the Company will defer the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Participant) to
the minimum extent necessary to satisfy Section 409A of the Code until the date that is six months and one day following the Participant's termination of employment with all Service Recipients
(or the earliest date as is permitted under Section 409A of the Code), if such payment or benefit is payable upon a termination of employment. Each payment made under the Plan shall be
designated as a "separate payment" within the meaning of Section 409A of the Code. 

        Approved
by stockholders on April 14, 2010.

6

QuickLinks

Exhibit 10.43

THE AMENDED AND RESTATED SEALY CORPORATION BONUS PLAN

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