Common use of Salary, Bonus and Benefits Clause in Contracts

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by a. From the Commencement Date through October 31, 2008, Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, paid an annual base salary at of two hundred forty thousand dollars ($240,000), paid in the initial rate same intervals as other employees of One Hundred Ninety the Company; and, for fiscal year 2007, Employee has received all bonus amounts to which he is entitled. Further, if employed full-time through October 31, 2008, then Employee will be eligible to receive an executive bonus in accordance with the terms and conditions of the executive bonus program authorized by the Board of Directors of the Company (the “Board”) for other senior management executives of the Company for fiscal year 2008, in a range of percentages, but with a target bonus of 50% of Employee’s base salary, but, for fiscal year 2008, Employee is guaranteed to receive a bonus of no less than Sixty Thousand Dollars ($190,00060,000). b. For any subsequent year after fiscal year 2008, Employee will receive an annual base salary of no less than his annual base salary for the immediately prior fiscal year of this Agreement, and will also be eligible to participate in an executive bonus program and/or in an individual performance bonus program as authorized by the Board for said period. c. Other than the executive bonus program set forth herein, there are no other bonus programs or amounts, including Employee’s fiscal 2007 bonus program, applicable to Employee. d. At the next regular-scheduled Board meeting after the execution hereof, Company shall recommend to the Board that the Employee be issued 30,000 restricted stock units of the Company (the “RSUs”). This salary Notwithstanding any other provision contained herein, or in the Plan, the RSUs shall be subject to annual review vest one-half on the second (2nd) anniversary of the initial grant date by the Human Resources Committee Board of Directors (the “Grant Date”) and one-half on the fourth (4th) anniversary of the Board (Grant Date, provided the "Committee") and may be increasedEmployee is still employed, on a full-time basis, with the Company on each of said anniversary dates, but not decreasedsame may accelerate vest under certain conditions, to as set by the extentBoard. Future equity grants, if any, will be at the discretion of the Board of Directors, provided, however, that such RSUs will be treated in such a manner as to comply with Section 409A of the Committee may determineCode. e. Any stock options, the RSUs, and any other equity grants (b“Equity”) The issued at any time to Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") vest in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth grant by the Board, and, as may be otherwise applicable, with any relevant terms and conditions of the Company’s 2004 Equity Incentive Plan (the “Plan”), as amended, or any subsequent plan, provided, however, that such RSUs will be treated in such a manner as to comply with Section 7 hereof, 409A of the Code. f. During the Term and provided the Employee is employed with the Company on a full-time basis, Employee shall receive an annual golf membership allowance in an amount not be entitled to duplicative payments under this Agreement exceed Six Thousand One Hundred Dollars ($6,100) per year. The golf membership allowance shall include the golf membership fee and any golf course playing fees and cart fees. In the Executive Severance Benefit Planevent of a termination of Employee’s full-time employment by Company for just cause or a voluntary termination by Employee, Employee shall reimburse the Company for the prorated portion of the golf membership allowance remaining in the Company’s fiscal year. (d) Without limiting g. Employee’s salary is set in the generality of Subsection 3(c) above, for so long as such coverage shall expectation that Employee’s full professional time will be available devoted to the executive officers of Employee’s duties hereunder. h. During Employee’s employment with the Company, the Company will promptly pay or reimburse Employee for reasonable travel and other expenses incurred by Employee in the furtherance of or in connection with the performance of Employee’s duties. Such reimbursement will be in accordance with Company policies in existence from time to time. i. Notwithstanding any other provision contained herein, Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan and is an employee “at will,” terminable at any time, with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expenseor without just cause or notice. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee -------------------------- on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Seventy-One Thousand Five Hundred Dollars --------------------------------------------- ($190,000171,500.00). This salary shall be subject to annual review review, ---------- in December of each year commencing in December 1997, by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine.-------------------------------------------------------------------------------- Page 3 -------------------------------------------------------------------------------- (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- thirty-five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan, the 1996 Transitional Restricted Stock Plan and the 1998 1997 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar one-year period of commencing with December 1, 1996, during the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm the Employee's -------------------------------------------------------------------------------- Page 4 -------------------------------------------------------------------------------- entitlement to a number of restricted shares of Class A Common Stock of the Company ("Class A Shares"), as well as options to purchase additional Class A Shares pursuant to various benefit plans or agreements with the Company. The Parties agree that (a) such restricted Class A Shares and such options are in addition to, and not in lieu of, any shares or options which may be granted under any other plan or arrangement of the Company after the date of this Agreement, and (b) the various restricted stock agreements, agreements and stock option agreements, or and any related Stockholder Agreement previously entered into (the "Stockholder Agreement") between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company Company, during the Employment Term, Term the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's ’s then current practice for paying its executive officers in effect from time to time during the Employment Term, but in no case less frequently than monthly, an annual base salary at the initial rate of One Three Hundred Ninety Thousand Dollars ($190,000300,000). This salary shall be subject to annual review by the Board or the Human Resources Committee of the Board (the "“Committee"”) and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan Company’s annual bonus system (the "“Bonus Plan"”) in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target ’s “target annual bonus”, as established by the Board or the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five shall be sixty percent (3560%) of annual base salary (his "such percentage, the “Target Annual Bonus Percentage") of annual base salary” and such bonus, the “Target Bonus”), with a range of zero percent (0%) to seventy one hundred twenty percent (70120%) of annual base salarysalary based on achievement of financial targets established annually under the Bonus Plan by the Board or the Committee. The Employee is guaranteed a minimum bonus for his first fiscal year with the Company of one hundred thousand dollars ($100,000). (c) Within thirty (30) days hereof, the Employee shall be granted options (the “Options”) to purchase two hundred fifty thousand (250,000) shares of the Company’s common stock (the “Shares”) at a price per Share which is equal to an eight (8) times multiple of the Company’s twelve (12) months trailing EBITDA, less debt, divided by the fully diluted number of outstanding Shares (all as of January 28, 2001 and based on the Company’s performance for the fiscal year which ends on January 28, 2001). The Company’s stock option plan under which these Options are to be granted shall be consistent with this Agreement and essentially similar to the Employee’s current employer’s stock option plan. However, that stock option plan shall not require that the Options granted pursuant to this Agreement and the Shares acquired from those Options be sold to the Company or any other entity for a price below fair market value at the time of any such sale. These Options shall have a ten-year life and shall vest at the rate of 20% per year, with the first 20% vesting on January 25, 2002. These Options, at the sole discretion of the Employee, may be exercised by the Employee on a “cashless” basis in accordance with their terms (including vesting requirements) if the Employee terminates his employment with the Company for “Good Reason” (as defined below) or if the Company terminates his employment without “Cause” (as defined below). In addition, these Options shall fully vest if the Employee is employed by the Company under this Agreement at the time that an entity or entities unrelated to the current shareholders of the Company directly or indirectly acquire more than fifty percent (50%) of the outstanding shares of the voting stock of the Company or acquire all or substantially all of the assets of the Company (“Sale of the Company”). (d) During the period that the Employee is employed by the Company under this Agreement, the Company shall not enter into an agreement for the Sale of the Company, unless the Company provides the Employee the opportunity to participate in such transaction with respect to his Options and the Shares subject to his Options on the same terms and conditions available to all holders of Company common stock participating in such transaction. (e) The Employee shall be eligible for participation in the current Company provided executive benefits as outline in Exhibit A attached hereto but modified, as to the Employee, to provide the Employee term life insurance in an amount at least equal to one and one half times his base annual salary (initially $450,000 of coverage), a vehicle allowance of at least six hundred fifty dollars ($650) per month, and at least five (5) weeks of paid vacation per year. The Employee shall also be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, plans as the Board may adopt from time to time and in which the Company's ’s executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee The employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) aboveany other Company benefit plans, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termincluding severance benefits. (f) In addition, The Company shall reimburse the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties Employee for up to sixty (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force 60) days of reasonable commuting and effect except as otherwise provided herein. Notwithstanding the foregoing, temporary living expenses related to the extent that any provision contained herein is inconsistent commencement of his employment with the terms Company. The Employee’s expenses of commuting to and living in the Houston area after such initial sixty (60) days shall not be reimbursed by the Company. If the Employee remains employed by the Company until July 25, 2001, on that date the Company shall pay him a lump sum of one hundred thirty-five thousand dollars ($135,000) as a relocation allowance and shall then have no further obligation to pay any expenses of the Pre-existing AgreementsEmployee in relocating from North Carolina to the Company’s headquarters area. The amount of the Relocation Allowance may be reduced by all applicable tax withholding amounts, and will not be grossed up by the terms of this Agreement shall be controllingCompany for taxes.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect Commencing on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater earlier of (i) the amount of vacation time to which -------------------------- effective date (the Employee is entitled per year as "IPO Date") of the date of this AgreementCompany's initial public offering -------- pursuant to an underwritten registration statement on Form S-1 declared effective by the Securities and Exchange Commission (the "IPO"), if any, or (ii) the amount of vacation time to --- that date on which the Employee would have become entitled if Board passes a resolution (based on the prior receipt of the approval of a majority of the Company's vacation policy shareholders) to commence compensating the Executive in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent accordance with the terms of this Section 1(b) notwithstanding that the IPO ------------ Date has not theretofore occurred, the Company will pay Executive a base salary of $215,000 per annum, payable on a bi-weekly basis or in accordance with the Company's normal payroll practices (the "Annual Base Salary"), subject to any -------------------- annual increase during the Employment Period as determined by the Board based upon the Company's achievements of budgetary and other objectives to be set by the Board and communicated to the Executive within ninety (90) days of the Pre-existing Agreementsdate hereof but no later than thirty (30) days after the IPO Date and as revised thereafter on or about the commencement of each fiscal year of the Company and in connection with the budget process for each fiscal year of the Company. Executive shall also receive a monthly automobile (or car lease) allowance of seven hundred and fifty dollars ($750.00). In addition, the terms of this Agreement Executive shall be controllingeligible to receive an annual bonus (commencing with the Company's fiscal year ending December 31, 1999) of up to fifty percent (50%) of the Annual Base Salary based upon the Company's achievement of budgetary and other objectives set by the Board. Executive's Annual Base Salary and bonus for any partial year will be prorated based upon the number of days elapsed in such year. In addition, during the Employment Period, Executive will be entitled to such other benefits approved by the Board and made available to the Company's senior executives, including four (4) weeks vacation time per annum, contributory and non- contributory Company welfare and benefit plans, medical, death benefit, disability and life insurance plans and reimbursement of reasonable business expenses.

Salary, Bonus and Benefits. For services rendered by a. From the Commencement Date through January 31, 2004, Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, paid an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000190,000.00). This salary shall be subject to annual review by , paid in the Human Resources Committee same intervals as other Employees of the Board (the "Committee") Company; and may if employed through October 31, 2003, Employee will be increased, but not decreased, eligible to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") receive an executive bonus in accordance with the provisions of that Plan as in effect as terms and conditions of the date of this Agreement. The Employee's Target annual bonus, as established executive bonus program authorized by the Committee under the Bonus Plan as Board of Directors of the date Company (the “Board”) for other senior management executives of the Company for fiscal year 2003, in a range of percentages, but with a target bonus of 50% of Employee’s base salary. b. During each of the last two years of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of Employee will receive an annual base salary, with a range salary of zero percent (0%) to seventy percent (70%) of no less than his annual base salarysalary for the first year of this Agreement, and will also be eligible to participate in an executive bonus program and/or in an individual performance bonus program as authorized by the Board for said two years. (c) The c. Employee shall receive stock option grants to purchase 40,000 shares of the Company’s common stock applicable for the first year of this Agreement, as determined by the Company’s Board of Directors. Future stock option grants will be at the discretion of the Board of Directors. d. The Company agrees to provide Employee with the same benefits it provides the other members of its senior management executive team. Employee will not, however, be eligible for participation to participate in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short’s non-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from executive bonus program. e. All stock options granted at any time to time and Employee shall vest in which the Company's executive officers are eligible to participate. Such participation shall be subject to accordance with the terms and conditions set forth in the applicable plan documents. As grant by the Board and, as otherwise may be applicable, with any relevant terms and conditions of either the 1993 Stock Option Plan, as amended, or the 2002 Stock Option Plan as amended (the “Plan”), whichever is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Planapplicable. f. Employee’s salary is set in the expectation that (dexcept for vacation days and holidays) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall Employee’s full time will be available devoted to the executive officers of Employee’s duties hereunder. g. During Employee’s employment with the Company, the Company will promptly pay or reimburse Employee shall be eligible to participate for reasonable travel, entertainment and other expenses incurred by Employee in the Company's Group Term Life Insurance Plan furtherance of or in connection with a death benefit to the performance of Employee’s duties. Such reimbursement will be provided at the level of one and one half (1 1/2) times annual base salary at in accordance with Company expense, plus extended coverage with a death benefit to be provided of at least the level policies in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation existence from time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termtime. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Six Hundred Ninety Twenty-five Thousand Dollars ($190,000625,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five sixty percent (3560%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy one hundred twenty percent (70120%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 6 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/211/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of during the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled four weeks per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termyear. (f) In addition, the Parties do hereby further confirm that any shares of Class A Common Stock of the Company ("Class A Shares"), and any options to purchase additional Class A Shares previously granted to Employee are in addition to, and not in lieu of, any shares or options which may be granted under any other plan or arrangement of the Company after the date of this Agreement, and (b) the various stock agreements, agreements and stock option agreements, or and any related Stockholder Agreement previously entered into (the "Stockholder Agreement") between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by Commencing on the Employee on -------------------------- behalf earlier of the Company during -------------------------- effective date (the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a"IPO Date") The Company shall pay to the Employee, in equal installments, according to of the Company's then current practice for paying its executive officers in effect from time initial public offering -------- pursuant to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000). This salary shall be subject to annual review underwritten registration statement on Form S-1 declared effective by the Human Resources Committee of the Board Securities and Exchange Commission (the "CommitteeIPO") and may be increased, but not decreased, to the extent), if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to --- that date on which the Employee would have become entitled if Board passes a resolution (based on the prior receipt of the approval of a majority of the Company's vacation policy shareholders) to commence compensating the Executive in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent accordance with the terms of this Section 1(b) ------------ notwithstanding that the IPO Date has not theretofore occurred, the Company will pay Executive a base salary of $180,000 per annum, payable on a bi-weekly basis or in accordance with the Company's normal payroll practices (the "Annual Base Salary"), subject to any ------------------ annual increase during the Employment Period as determined by the Board based upon the Company's achievements of budgetary and other objectives to be set by the Board and communicated to the Executive within ninety (90) days of the Pre-existing Agreementsdate hereof but no later than thirty (30) days after the IPO Date and as revised thereafter on or about the commencement of each fiscal year of the Company and in connection with the budget process for each fiscal year of the Company. Executive shall receive a monthly automobile (or car lease) allowance of seven hundred and fifty dollars ($750.00). In addition, the terms of this Agreement Executive shall be controllingeligible to receive an annual bonus (commencing with the Company's fiscal year ending December 31, 1999) of up to fifty percent (50%) of the Annual Base Salary based upon the Company's achievement of budgetary and other objectives set by the Board. Executive's Annual Base Salary and bonus for any partial year will be prorated based upon the number of days elapsed in such year. In addition, during the Employment Period, Executive will be entitled to such other benefits approved by the Board and made available to the Company's senior executives, including four (4) weeks vacation time per annum, contributory and non- contributory Company welfare and benefit plans, medical, death benefit, disability and life insurance plans and reimbursement of reasonable business expenses.

Salary, Bonus and Benefits. For services rendered by the a. Upon execution of this Agreement, Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to paid a sign-on bonus of Fifteen Thousand Dollars ($15,000.00). From the Commencement Date through October 31, 2004, Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, be paid an annual base salary at the initial rate of One Two Hundred Ninety Fifty Thousand Dollars ($190,000250,000.00). This salary shall be subject to annual review by , paid in the Human Resources Committee same intervals as other Employees of the Board (the "Committee") and may Company. If Employee is employed through October 31, 2004, Employee will be increased, but not decreased, eligible to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") receive an executive bonus in accordance with the provisions of that Plan as in effect as terms and conditions of the date executive bonus program authorized by the Board of this Agreement. The Directors of the Company (the "Board") for other senior management executives of the Company for fiscal year 2004, in a range of percentages, but with a target bonus of 50% of Employee's Target annual bonus, as established by base salary. b. During the Committee under the Bonus Plan as of the date second year of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of Employee will receive an annual base salary, with a range salary of zero percent (0%) to seventy percent (70%) of no less than his annual base salarysalary for the first year of this Agreement, and will also be eligible to participate in an executive bonus program and/or in an individual performance bonus program as authorized by the Board. (c) The c. Employee shall be eligible for participation in such other benefit plans, including, but not limited to, receive stock option grants to purchase 100,000 shares of the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, common stock applicable for the 401(k) feature first year of the Profit Sharing Plan and the 1998 Stock Option Planthis Agreement, as the Board may adopt from time to time and in which determined by the Company's Board of Directors. Future stock option grants will be at the discretion of the Board of Directors. d. The Company agrees to provide Employee with the same benefits it provides the other members of its senior management executive officers are team. Employee will not, however, be eligible to participate. Such participation participate in the Company's non-executive bonus program. e. All stock options granted at any time to Employee shall be subject to vest in accordance with the terms and conditions set forth in the applicable plan documents. As is more fully set forth grant by the Board (i.e., in Section 7 hereofincrements of 25% after each 12 months of continuous employment) and as determined by the Board, otherwise may be applicable, with any relevant terms and conditions of the Employee shall not be entitled to duplicative payments under this Agreement and 2002 Stock Option Plan as amended (the Executive Severance Benefit "Plan"). f. Employee's salary is set in the expectation that (dexcept for vacation days and holidays) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall Employee's full time will be available devoted to the executive officers of Employee's duties hereunder. g. During Employee's employment with the Company, the Company will promptly pay or reimburse Employee for reasonable travel, entertainment and other expenses incurred by Employee in the furtherance of or in connection with the performance of Employee's duties. Such reimbursement will be in accordance with Company policies in existence from time to time. h. A relocation reimbursement will be provided in order to allow Employee to move from Florida to Las Vegas. The relocation expenses, not to exceed $45,000, shall be eligible for actual closing costs related to participate in the sale of Employee's present home, as well as the actual, verifiable and reasonable expenses of moving Employee's household belongings, plus transportation for Employee and his family from Florida to Las Vegas. If, prior to October 31, 2004, Employee leaves the Company's Group Term Life Insurance Plan employment voluntarily (or is terminated with a death benefit cause), then Employee agrees to be provided at reimburse the level Company for all of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided the costs of at least the level in effect on relocation paid by the date of this Agreement for the Employee under such Plan at the Company. Until Employee's discretion and expense. Florida residence sells, the Company will also cover up to six months of Employee's actual, out of pocket temporary Las Vegas housing costs (e) The Employee shall be entitled to takei.e., during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreementrent or mortgage payment), or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which $6,000, whichever is applicable to its executive officers remained in effect throughout the Employment Term. (f) less. In addition, the Parties do hereby further confirm Company will "gross-up" the portion of reimbursed relocation expenses, if any, that any stock agreementsare paid to Employee under this paragraph 2(h) if, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, only to the extent that any provision contained herein Employee: i. is inconsistent taxed on such portion of reimbursed relocation expenses; and ii. does not otherwise receive a tax deduction benefit or credit in connection with the terms such portion of any of the Pre-existing Agreements, the terms of this Agreement shall be controllingreimbursed relocation expenses.

Salary, Bonus and Benefits. For services rendered by Commencing on the Employee on -------------------------- behalf earlier of the Company during -------------------------- effective date (the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a"IPO Date") The Company shall pay to the Employee, in equal installments, according to of the Company's then current practice for paying its executive officers in effect from time initial public offering -------- pursuant to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000). This salary shall be subject to annual review underwritten registration statement on Form S-1 declared effective by the Human Resources Committee of the Board Securities and Exchange Commission (the "CommitteeIPO") and may be increased, but not decreased, to the extent), if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to --- that date on which the Employee would have become entitled if Board passes a resolution (based on the prior receipt of the approval of a majority of the Company's vacation policy shareholders) to commence compensating the Executive in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent accordance with the terms of this Section 1(b) ------------ notwithstanding that the IPO Date has not theretofore occurred, the Company will pay Executive a base salary of $180,000 per annum, payable on a bi-weekly basis or in accordance with the Company's normal payroll practices (the "Annual Base Salary"), ------------------ subject to any annual increase during the Employment Period as determined by the Board based upon the Company's achievements of budgetary and other objectives to be set by the Board and communicated to the Executive within ninety (90) days of the Pre-existing Agreementsdate hereof but no later than thirty (30) days after the IPO Date and as revised thereafter on or about the commencement of each fiscal year of the Company and in connection with the budget process for each fiscal year of the Company. Executive shall receive a monthly automobile (or car lease) allowance of seven hundred and fifty dollars ($750.00). In addition, the terms of this Agreement Executive shall be controllingeligible to receive an annual bonus (commencing with the Company's fiscal year ending December 31, 1999) of up to fifty percent (50%) of the Annual Base Salary based upon the Company's achievement of budgetary and other objectives set by the Board. Executive's Annual Base Salary and bonus for any partial year will be prorated based upon the number of days elapsed in such year. In addition, during the Employment Period, Executive will be entitled to such other benefits approved by the Board and made available to the Company's senior executives, including four (4) weeks vacation time per annum, contributory and non- contributory Company welfare and benefit plans, medical, death benefit, disability and life insurance plans and reimbursement of reasonable business expenses.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Two Hundred Ninety Thousand Dollars ($190,000200,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by (i) Promptly upon the Employee on -------------------------- behalf commencement of the Company during the Employment TermPeriod, the following salary, Company paid Executive a cash signing bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine300,000. (bii) The Employee shall participate in During the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as remainder of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of Employment Period commencing on the date of this Agreement, is thirty- five percent the Company will pay Executive a base salary (35%) (his the "Target Annual Bonus PercentageBase Salary") of annual base salaryat least $600,000 per annum, subject to any increase as determined by the Board from time to time. The Annual Base Salary shall be payable in accordance with the regular payroll practices of the Company but, in any event, no less frequently than monthly. (iii) During the remainder of the Employment Period commencing on the date of this Agreement, Executive shall be entitled to participate in the Company's Annual Incentive Plan, as in effect from time to time, with a range target performance level equal to at least 120% of zero percent (0%) his Annual Base Salary or such greater percentage as determined by the Compensation Committee of the Board, except in the event of the Sale of the Company then Executive shall be entitled to seventy percent (70%) participate in the Company's or Parent's Annual Incentive Plan, as in effect from time to time, with a target performance level equal to at least 85% of annual base salaryhis Annual Base Salary. In addition, the Board or the Compensation Committee of the Board may award a special or additional bonus to Executive in its sole discretion from time to time. In the event of a Sale of the Company in calendar year 2002, there shall be a pro-ration of the bonus such that Executive shall be paid a bonus based on 120% of Annual Base Salary for the period from February 1, 2002 through the date of the Sale of the Company and another bonus based on 85% of Annual Base Salary for the period from the date of the Sale of the Company through December 31, 2002. (civ) The Employee On October 27, 1998, the Performance Compensation Committee of the Board awarded Executive (A) an option on 400,000 shares of the Company's common stock and (B) subject to the approval by the Company's stockholders of certain amendments to the Company's stock option plan, an option on 600,000 shares of the Company's common stock. (v) During the Employment Period, Executive shall be eligible for participation entitled to participate in all employee pension and welfare benefit plans and programs made available to the Company's senior level executives or to its employees generally, as such other benefit plansplans or programs may be in effect from time to time, including, but not limited towithout limitation, pension, profit sharing, savings and other retirement plans or programs, medical, dental, hospitalization, short-term and long-term disability and life insurance plans, accidental death and dismemberment protection, travel accident insurance, and any other pension or retirement plans or programs and any other employee welfare benefit plans or programs that may be sponsored by the Company and/or, on a selected basis, plans of the Parent from time to time, including plans that supplement the above-listed types of plans or programs, whether funded or unfunded. (vi) During the Employment Period, Executive shall participate in all benefits and perquisites available to senior executives of the Company at levels, and on terms and conditions, that are commensurate with his positions and responsibilities at the Company's Profit Sharing Plan , and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term shall receive such additional benefits and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, perquisites as the Board may adopt may, in its sole discretion, from time to time and in which provide. (vii) During the Employment Period, Executive shall have use of the Company's executive officers are eligible to participate. Such participation shall be subject to the terms plane in commuting between Florida and conditions set forth Wisconsin and, in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality event of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers a Sale of the Company, use of the Employee Company's or the Parent's plane for such commute. (viii) During the Employment Period, Executive shall be eligible to participate in any long-term incentive plans of the Company's Group Term Life Insurance Plan with a death benefit to be provided at Company and its affiliates (including the level of one and one half (1 1/2) times annual base salary at Company expenseParent), plus extended coverage with a death benefit to be provided of at least the level as in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled from time to taketime, during each calendar year period in which other senior executives of the Employment TermCompany are eligible to participate, commencing on the 1st of January after execution of this Agreement, vacation time equal with benefits that are no less favorable than those provided to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termsuch other executives. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Fifty Eight Thousand Dollars ($190,000158,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee -------------------------- on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Ninety-Eight Thousand Dollars ($190,000198,000.00). This salary shall be subject to annual review review, in December of each year commencing in December 1997, by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine.-------------------------------------------------------------------------------- Page 3 -------------------------------------------------------------------------------- (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan, the 1996 Transitional Restricted Stock Plan and the 1998 1997 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar one-year period of commencing with December 1, 1996, during the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm the Employee's -------------------------------------------------------------------------------- Page 4 -------------------------------------------------------------------------------- entitlement to a number of restricted shares of Class A Common Stock of the Company ("Class A Shares"), as well as options to purchase additional Class A Shares pursuant to various benefit plans or agreements with the Company. The Parties agree that (a) such restricted Class A Shares and such options are in addition to, and not in lieu of, any shares or options which may be granted under any other plan or arrangement of the Company after the date of this Agreement, and (b) the various restricted stock agreements, agreements and stock option agreements, or and any related Stockholder Agreement previously entered into (the "Stockholder Agreement") between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Two Hundred Ninety Thousand Dollars ($190,000200,000.00). This salary shall be subject to annual review review, in December of each year commencing in December 1997, by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine.-------------------------------------------------------------------------------- Page 3 -------------------------------------------------------------------------------- (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan, the 1996 Transitional Restricted Stock Plan and the 1998 1997 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar one-year period of commencing with December 1, 1996, during the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm the Employee's -------------------------------------------------------------------------------- Page 4 -------------------------------------------------------------------------------- entitlement to a number of restricted shares of Class A Common Stock of the Company ("Class A Shares"), as well as options to purchase additional Class A Shares pursuant to various benefit plans or agreements with the Company. The Parties agree that (a) such restricted Class A Shares and such options are in addition to, and not in lieu of, any shares or options which may be granted under any other plan or arrangement of the Company after the date of this Agreement, and (b) the various restricted stock agreements, agreements and stock option agreements, or and any related Stockholder Agreement previously entered into (the "Stockholder Agreement") between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered While employed by the Company as its CEO: a. From the Commencement Date and if employed through October 31, 2009, Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, paid an annual base salary at the initial rate of One Five Hundred Ninety Thousand Dollars ($190,000500,000). This salary shall , paid in the same intervals as other employees of the Company; and if employed as the Company’s CEO through October 31, 2009, Employee will also be subject eligible to annual review receive a cash bonus in accordance with the terms and conditions of the executive bonus program authorized by the Human Resources Compensation Committee of the Board (the "“Committee"”) and may be increasedratified by the Board for other senior management executives of the Company for fiscal year 2009, which, for Employee, shall have a “target” cash bonus of 50% of Employee’s base salary and a maximum cash bonus of 100% of Employee’s base salary, but in no event less than $75,000. For purposes of determining Employee’s cash bonus, the Committee, the Board and the Employee shall mutually agree upon certain Company financial metrics and certain other non-financial goals which shall be factors in determining the amount of Employee’s cash bonus. b. For any subsequent year after fiscal year 2009, Employee will receive an annual base salary of no less than his annual base salary for the immediately prior year of this Agreement and will also be eligible to participate in an executive bonus program and/or in an individual performance bonus program as authorized by the Committee and/or the Board for said period for senior management executives of the Company. c. In addition, in the Committee’s sole discretion, the Employee shall be considered for an annual long-term incentive bonus which may take the form, at the Committee’s sole discretion, of either cash, equity or a combination thereof. d. At the first regularly scheduled Board meeting after the Commencement Date, Employee shall receive 300,000 options to purchase the Company’s common stock (the “Options”), as per the recommendation of the Committee, and the approval of the Board. The Options shall not decreasedbe issued out of any option or equity plan, but shall qualify as an inducement grant under Rule 4350(i)(1)(A)(iv) of the NASDAQ Stock Market Rules. The Options shall expire ten (10) years from the grant date. The shares underlying the Options shall be registered on Form S-8 within nine (9) months of the grant date. Except as otherwise set forth in and subject to paragraph 2(e) hereof, one-quarter (1/4) of the extentOptions shall vest on each 12-month anniversary date of the grant date, commencing on the first 12-month anniversary date thereof and continuing for three years thereafter, such that full vesting will occur at the end of four years. The exercise price of the Options shall be the Company’s closing stock price on the date of the grant. All vesting of the Options shall be subject to Employee being employed with the Company on each scheduled vesting date. Notwithstanding the above vesting schedule, all Options shall accelerate vest in the event of the Employee’s death or total disability while the Employee is employed by the Company, or in the event a Change in Control of the Company closes while the Employee is employed as the Chief Executive Officer of the Company. Any future stock options, restricted shares or other equity grants (“Equity”), if any, that will be at the Committee may determinesole discretion of the Board. (b) The e. Except as modified herein, any other Equity issued at any time to Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") vest in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable grant by the Board (upon recommendation of the Committee) and, as otherwise may be applicable, with any relevant terms and conditions of the applicable Company equity incentive plan documents. As is more fully set forth in Section 7 hereof(the “Plan”), except as modified by the terms and conditions of the applicable grant by the Board. f. During the Term, the Company agrees to provide Employee shall not be entitled to duplicative payments under this Agreement and with the Executive Severance Benefit Plan. (d) Without limiting same benefits it provides all of the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers other senior executive-level employees of the Company. Employee will not, the Employee shall however, be eligible to participate in the Company's Group ’s non-executive bonus program. g. Except as otherwise set forth herein, Employee’s salary is set in the expectation that Employee’s full professional time during the Term Life Insurance Plan will be devoted to Employee’s duties hereunder. h. During Employee’s employment with a death benefit the Company, the Company will pay or reimburse Employee for reasonable travel and other expenses incurred by Employee in the furtherance of or in connection with the performance of Employee’s duties. Such reimbursement will be in accordance with Company policies in existence from time to be provided at time. Separate from the foregoing and consistent with its practices for the other senior executive-level employees of one the Company, the Company shall pay all gaming licensing fees of and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit all gaming investigative costs relating to be provided of at least the level Employee. i. Notwithstanding any other provision contained in effect on the date of this Agreement for which may be to the contrary: i) Employee under such Plan at shall be an employee-at-will with no guaranteed term of employment, and either Employee or the Employee's discretion and expense. (e) The Employee Company shall be entitled to taketerminate said employment with or without any prior notice, during each calendar year period of the Employment Termor with or without any cause; and ii) Except as otherwise expressly set forth in paragraph 2(a) hereof, commencing on the 1st of January after execution of Employee is not guaranteed any bonus (or specific amount thereof) which may be mentioned in this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by a. From the Commencement Date through January 31, 2004, Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, paid an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000190,000.00). This salary shall be subject to annual review by , paid in the Human Resources Committee same intervals as other Employees of the Board (the "Committee") Company; and may if employed through October 31, 2003, Employee will be increased, but not decreased, eligible to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") receive an executive bonus in accordance with the provisions of that Plan as in effect as terms and conditions of the date of this Agreement. The Employee's Target annual bonus, as established executive bonus program authorized by the Committee under the Bonus Plan as Board of Directors of the date Company (the “Board”) for other senior management executives of the Company for fiscal year 2003, in a range of percentages, but with a target bonus of 50% of Employee’s base salary. b. During each of the last two years of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of Employee will receive an annual base salary, with a range salary of zero percent (0%) to seventy percent (70%) of no less than his annual base salarysalary for the first year of this Agreement, and will also be eligible to participate in an executive bonus program and/or in an individual performance bonus program as authorized by the Board for said two years. (c) The c. Employee shall receive stock option grants to purchase 40,000 shares of the Company’s common stock applicable for the first year of this Agreement, as determined by the Company’s Board of Directors. Future stock option grants will be at the discretion of the Board of Directors. d. The Company agrees to provide Employee with the same benefits it provides the other members of its senior management executive team. Employee will not, however, be eligible for participation to participate in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short’s non-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from executive bonus program. e. All stock options granted at any time to time and Employee shall vest in which the Company's executive officers are eligible to participate. Such participation shall be subject to accordance with the terms and conditions set forth in the applicable plan documents. As grant by the Board and, as otherwise may be applicable, with any relevant terms and conditions of either the 1993 Stock Option Plan, as amended, or the 2002 Stock Option Plan as amended (the “Plan”), whichever is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Planapplicable. f. Employee’s salary is set in the expectation that (dexcept for vacation days and holidays) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall Employee’s full time will be available devoted to the executive officers of Employee’s duties hereunder. g. During Employee’s employment with the Company, the Company will promptly pay or reimburse Employee for reasonable travel, entertainment and other expenses incurred by Employee in the furtherance of or in connection with the performance of Employee’s duties. Such reimbursement will be in accordance with Company policies in existence from time to time. h. During the Term, and provided Employee remains employed on a full-time basis with the Company, Employee shall be eligible to participate receive a car allowance in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled $700.00 per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termmonth. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (ai) The Company shall pay to Executive a base salary in the Employee, annual amount of $350,000 payable bi-weekly or in equal installments, according to such other manner as is consistent with the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determinenormal payroll practices. (bii) The Employee Company shall participate in (subject to the Sealy Corporation Annual Bonus Plan (review and approval by the "Bonus Plan") in accordance with the provisions of that Plan as in effect as compensation committee of the board of directors) establish a performance based program pursuant to which Executive shall receive, if performance targets are met, an additional annual cash payment of up to fifty percent (50%) of Executive's then current base salary paid during the preceding twelve months (or such higher amount as the compensation committee may approve, provided that the compensation committee will, upon the request of the Executive, review the foregoing target bonus on or about the first anniversary of the effective date of this Agreement. The Employee's Target annual bonusagreement and determine whether, as established by based on the Committee under the Bonus Plan as performance of the date of this AgreementCompany and Executive, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time bonus structure applicable to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers other senior executives of the Company, the Employee target bonus should be increased). (iii) As a further inducement to Executive to enter into this Agreement, subject to approval of the compensation committee of the board of directors, the Company shall be eligible grant to participate in Executive (A) 1,000,000 restricted shares (the "Restricted Shares") of the Company's Group Term Life Insurance Plan with Class A common stock, subject to annual vesting at a death benefit to be provided at the level rate of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided 50% of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during grant upon each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as anniversary of the date of this Agreement provided that Executive remains employed with the Company as of such anniversary, and which (B) an option to purchase 1,000,000 shares of the Company's Class A common stock at a price of $2.00 per share pursuant to the Company's 2003 Employee Stock Option Plan, subject to annual vesting at a rate of 25% of such grant upon each anniversary of the date of this Agreement provided that Executive remains employed with the Company as of such anniversary. Executive shall also be paid on April 10, 2005 an amount equal to Executive's tax liability associated with the grant identified in (A) above resulting from making a Section 83(b) election, as such amount is applicable reasonably determined by the Company or as finally determined by the Internal Revenue Service. Such payment shall be grossed-up to its executive officers remained fully take into account the tax effect of the payment (including the gross-up) to the Executive. In the event that Executive's employment is terminated without "Cause" or for "Good Reason," or by reason of his death or disability, all unvested Restricted Shares shall vest immediately. In the event that Executive's employment is terminated for "Good Reason," or by reason of his death or disability, any unvested options that would otherwise have vested in effect throughout the Employment Termensuing twelve (12) months shall vest immediately. In the event that Executive terminates his employment with the Company without "Good Reason," prior to the second anniversary hereof, all Restricted Shares, whether vested or unvested, shall be cancelled. (fiv) In additionThe Company shall offer to Executive a benefits package equivalent to that provided to the Company's other employees and senior-level executives (including, without limitation, participation in the Company's medical, dental, vision, life and disability insurance programs, the Parties do hereby further confirm that any Company's 401(k) plan, the Company's stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties purchase program (if and when such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"program is implemented), all remain in full force and effect except such other plans or programs as otherwise provided herein. Notwithstanding may be made available) (v) For so long as this Agreement is renewed, the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any compensation committee of the Pre-existing Agreements, board of directors shall each year on or before the terms anniversary date of this Agreement shall review the Executive's base salary and bonus payment in light of the performance of Executive and the Company, and may increase (but not decrease) such base salary and bonus payment by an amount it determines to be controllingappropriate.

Salary, Bonus and Benefits. For services rendered Subject to each of the terms and conditions in this agreement, and while employed by the Company as its CFO: a. From the Commencement Date and if employed through July 31, 2010, Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, paid a monthly base salary based on an annual base salary at the initial rate of One Three Hundred Ninety Thousand Dollars ($190,000300,000), paid in the same intervals as other employees of the Company; and if employed through October 31, 2009, Employee will also be eligible to receive a discretionary, pro-rata bonus for the fourth fiscal quarter of fiscal year 2009 worked by Employee. b. After the first 12 months of Employee’s employment, Employee will continue to receive an annual base salary of no less than his annual base salary for the immediately prior 12 months of this Agreement, and will also be eligible to participate in an executive bonus program and/or in an individual performance bonus program as authorized by the Board of Directors of the Company (the “Board”) for the other senior management executives of the Company for fiscal year 2010 and thereafter, which, for fiscal year 2010, shall have a target bonus of no less than 50% of Employee’s base salary; provided that, if Employee is still employed by the Company as its CFO through July 31, 2010, then Employee’s fiscal year 2010 bonus shall be no less than $40,000 (the “Minimum Bonus”), which Minimum Bonus shall be due and paid on August 1, 2010. c. At the first regularly scheduled Board meeting held after the Commencement Date, Employee shall receive 60,000 options to purchase the Company’s common stock (the “Options”), as per the recommendation of the Compensation Committee (the “Committee”), and the approval of the Board. This salary The Options shall not be issued out of any option or equity plan, but shall qualify as an inducement grant under Rule 4350(i)(1)(A)(iv) of the NASDAQ Stock Market Rules. The Options shall expire ten (10) years from the grant date. The shares underlying the Options shall be registered on Form S-8 within nine (9) months of the grant date. Except as otherwise set forth in and subject to paragraph 2(d) hereof, one-quarter (1/4) of the Options shall vest on each 12-month anniversary date of the grant date, commencing on the first 12-month anniversary date thereof and continuing for three years thereafter, such that full vesting will occur at the end of four years. The exercise price of the Options shall be the Company’s closing stock price on the date of the grant. The vesting of the Options on each such anniversary date shall be subject to annual review by Employee being employed with the Human Resources Committee Company on each such anniversary date. Notwithstanding the above vesting schedule, all Options shall accelerate vest in the event of the Board Employee’s death or total disability while the Employee is employed as the Chief Financial Officer of the Company, or in the event a change in control of the Company closes while the Employee is employed as the Chief Financial Officer of the Company. Any future stock options, restricted shares or other equity grants (the "Committee") and may be increased, but not decreased, to the extent“Equity”), if any, that will be at the sole discretion of the Committee may determineand the Board. (b) The d. Except as modified herein, any Equity issued at any time to Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") vest in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereofgrant by the Board and, as otherwise may be applicable, with any relevant terms and conditions of Shuffle Master, Inc.’s 2004 Equity Incentive Plan (the “Plan”), as amended, or any subsequent plan, except as modified by the terms and conditions of the applicable grant by the Committee and the Board. e. During the Term, the Company agrees to provide Employee shall not be entitled to duplicative payments under this Agreement and with the Executive Severance Benefit Plan. (d) Without limiting same benefits it provides all of the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers other senior management employees of the Company. Employee will not, the Employee shall however, be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense’s non-executive bonus program. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except f. Except as otherwise provided set forth herein, Employee’s salary is set in the expectation that Employee’s full professional time during the Term will be devoted to Employee’s duties hereunder. Notwithstanding the foregoing, and subject to paragraph 3 hereof, Employee may (i) engage in charitable or civic activities and (ii) manage his personal investments so long as such activities individually, and in the aggregate, do not interfere with his performance of duties for the Company. g. During Employee’s employment with the Company, the Company will promptly pay or reimburse Employee for reasonable travel and other expenses incurred by Employee in the furtherance of or in connection with the performance of Employee’s duties. Such reimbursement will be in accordance with Company policies in existence from time to time. h. A relocation expense reimbursement (collectively “Relocation Expenses”) will be provided in order to assist Employee and his spouse to move from Rancho Bxxxxxxx, California, to Las Vegas. The Relocation Expenses, not to exceed $20,000, shall be for actual costs related to the extent relocation of Employee and his spouse from Rancho Bxxxxxxx, California, to Las Vegas, including the actual, verifiable and reasonable expenses of moving his furniture and household effects, plus transportation for Employee and his spouse from Rancho Bxxxxxxx, California, to Las Vegas, and up to three (3) months of paid rent at an “Oakwood-type” apartment in Las Vegas if Employee requires temporary housing in Las Vegas between August 1, 2009 and October 31, 2009. If, prior to twelve months after the date that Employee and his spouse relocate to Las Vegas, Employee leaves the Company’s employment voluntarily (or is terminated with just cause), then Employee agrees to reimburse the Company for the costs of the Relocation Expenses paid by the Company on a pro rated basis based upon the number of months Employee was employed by the Company. i. Notwithstanding any other provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of in this Agreement which may be to the contrary: i) Employee shall be controllingan employee-at-will with no guaranteed term of employment, and either Employee or the Company shall be entitled to terminate said employment with or without any prior notice, or with or without any cause; and ii) Except as otherwise expressly set forth in paragraph 2(b) hereof, Employee is not guaranteed any bonus (or specific amount thereof) which may be mentioned in this Agreement.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's ’s then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Seven Hundred Ninety Thousand Dollars ($190,000700,000). This salary shall be subject to annual review by the Human Resources Compensation Committee of the Board (the "“Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "“Bonus Plan"”) in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's ’s Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five one-hundred percent (35100%) (his "His “Target Annual Bonus Percentage"”) of annual base salary, with a range of zero percent (0%) to seventy two hundred percent (70200%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's ’s Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 and 2004 Stock Option PlanPlans, as the Board may adopt from time to time and in which the Company's ’s executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 6 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's ’s Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2½) times annual base salary at Company expenseexpense (up to a maximum of $1 million in coverage), plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's ’s discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of during the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled four weeks per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termyear. (f) In addition, the Parties do hereby further confirm that any shares of Class A Common Stock of the Company (“Class A Shares”), and any options to purchase additional Class A Shares previously granted to Employee are in addition to, and not in lieu of, any shares or options which may be granted under any other plan or arrangement of the Company after the date of this Agreement, and (b) the various stock agreements, agreements and stock option agreements, or and any related Stockholder Agreement previously entered into (the “Stockholder Agreement”) between the Parties (such agreements being hereinafter referred to collectively as the "“Pre-existing Agreements"”), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee -------------------------- on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Five Hundred Ninety Thirty Thousand Dollars ($190,000530,000.00). This salary shall be subject to annual review review, in December of each year commencing in December 1997, by the Human Resources Committee of the Board -------------------------------------------------------------------------------- Page 3 -------------------------------------------------------------------------------- (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that the Bonus Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five will be eighty percent (3580%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy one hundred and twenty percent (70120%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan, the 1996 Transitional Restricted Stock Plan and the 1998 1997 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers officers, or employees in general, are eligible to participate. This Subsection 3(c) shall not be deemed to prevent participation in any special plan or arrangement providing special benefits to the Employee which are not available to other employees. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar one-year period of commencing with December 1, 1996, during the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreementfour weeks, or (ii) the amount of vacation time to which the Employee would have become is entitled if under the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termofficers. -------------------------------------------------------------------------------- Page 4 -------------------------------------------------------------------------------- (f) The Employee shall be entitled to an automobile allowance of not less than Seven Thousand Five Hundred Dollars ($7,500.00) per year and a personal financial planning allowance of not less than Five Thousand Dollars ($5,000.00) per year. (fg) In addition, the Parties do hereby further confirm the Employee's entitlement to sixty seven thousand six hundred and thirty-five (67,635) restricted shares of Class A Common Stock of the Company ("Class A Shares") pursuant to the Restricted Stock Grant Agreement dated as of March 4, 1996, between the Parties (the "Restricted Stock Agreement") and options to purchase five hundred and eighty-seven thousand three hundred and forty-two (587,342) additional Class A Shares at the exercise price of Seven and 23/100 Dollars ($7.23) per Class A Share, all vesting at a rate of twenty-five percent (25%) per year (unless accelerated as hereinafter provided) commencing March 4, 1996, pursuant to that Stock Option Agreement dated as of March 4, 1996, between the Parties (the "First Option Agreement"). The Parties also do hereby confirm the grant of options to purchase seventy-five thousand (75,000) additional Class A Shares at an exercise price of Nine and 60/100 Dollars ($9.60) under the Company's 1997 Stock Option Plan, pursuant to that certain Stock Option Agreement dated as of December 4, 1996, between the Parties (the "Second Option Agreement"). The Parties agree that (a) such restricted Class A Shares and such options are in addition to, and not in lieu of, any stock agreementsshares or options which may be granted under any other plan or arrangement of the Company after the date of this Agreement, stock option agreementsand (b) the Restricted Stock Agreement, or the First Option Agreement, the Second Option Agreement, and the related Stockholder Agreement previously entered into (the "Stockholder Agreement") dated as of March 4, 1996, between the Parties (such four (4) agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-Pre- existing Agreements, the terms of this Agreement shall be controlling.

Salary, Bonus and Benefits. For services rendered by the Employee Rhein on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee Rhein by the CompanyCompany during such Employment Term: (a) The Company shall pay to the EmployeeRhein, in equal installments, according to the Company's ’s then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary Base Salary at the initial rate of: (i) The rate then in effect from the Effective Date through March 31, 2006; and (ii) The rate of One Seven Hundred Ninety Twenty-Five Thousand Dollars ($190,000)725,000.00) effective April 1, 2006. This salary shall be subject to annual review review, at the beginning of each fiscal year of the Company commencing with Fiscal Year 2008, by the Human Resources Compensation Committee of or the Board (the "Committee") and may be increased, but not decreased, to the extent, if any, that the Committee Compensation Committee, or the Board, may determine. It is not anticipated that this amount will be increased during the Employment Term. (b) The Employee Rhein shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Incentive Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Rhein’s Target Annual Bonus Percentage"will be one hundred percent (100%) of his annual base salaryBase Salary, with a range of zero percent (0%) to seventy two hundred fifty percent (70250%) of his annual base salaryBase Salary. (c) The Employee Rhein shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust’s Retirement Plan, Executive Severance Benefit Plan, 2000 Stock Incentive Plan, Supplemental Executive Retirement Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Dental Plan, as the Board Company may adopt from time to time and in which the Company's ’s executive officers officers, or employees in general, are eligible to participate. This Subsection 5(c) shall not be deemed to prevent participation in any special plan or arrangement providing special benefits to Rhein which are not available to other employees. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 9 hereof, the Employee Rhein shall not be entitled to duplicative payments under this Agreement and the Executive any Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c5(c) above, for so long as such coverage soon as reasonably possible following the Effective Date, and thereafter throughout the Employment Term, Rhein shall be available to the executive officers of provided with life insurance protection, at the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company ’s expense, plus extended coverage with a death benefit to be provided in an aggregate amount of at least not less than two hundred percent (200%) of his earnings from the level in effect Company as reported on the date of this Agreement IRS Form W-2 for the Employee under such Plan at the Employee's discretion and expensepreceding calendar year. (e) The Employee Without limiting the generality of Subsection 5(c) above, Rhein shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if an automobile allowance in accordance with the Company's vacation ’s automobile policy in effect as of the date of this Agreement and which is applicable to for its executive officers remained in effect throughout (but not less than Twelve Thousand Dollars ($12,000.00) per year), an allowance for estate, financial and tax planning of Ten Thousand Dollars ($10,000.00) per year, and reimbursement for reasonable club dues and membership fees consistent with the Employment TermCompany’s past practice. (f) In additionWithout limiting the generality of Subsection 5(c) above, the Parties do hereby further confirm that any stock agreements, stock option agreements, Rhein shall be entitled to director’s and officer’s liability insurance coverage with respect to claims against Rhein arising in connection with his activities performed on behalf of or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively in connection with his service as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any an officer or Director of the Pre-existing Agreements, the terms of this Agreement shall be controllingCompany or any affiliate.

Salary, Bonus and Benefits. For services rendered by Commencing on the Employee on -------------------------- behalf earlier of the Company during -------------------------- effective date (the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a"IPO Date") The Company shall pay to the Employee, in equal installments, according to of the Company's then current practice for paying its executive officers in effect from time initial public offering -------- pursuant to time during the Employment Term, an annual base salary at the initial rate of One Hundred Ninety Thousand Dollars ($190,000). This salary shall be subject to annual review underwritten registration statement on Form S-1 declared effective by the Human Resources Committee of the Board Securities and Exchange Commission (the "CommitteeIPO") and may be increased, but not decreased, to the extent), if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "Bonus Plan") in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five percent (35%) (his "Target Annual Bonus Percentage") of annual base salary, with a range of zero percent (0%) to seventy percent (70%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled per year as of the date of this Agreement, or (ii) the amount of vacation time to --- that date on which the Employee would have become entitled if Board passes a resolution (based on the prior receipt of the approval of a majority of the Company's vacation policy shareholders) to commence compensating the Executive in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Term. (f) In addition, the Parties do hereby further confirm that any stock agreements, stock option agreements, or Stockholder Agreement previously entered into between the Parties (such agreements being hereinafter referred to collectively as the "Pre-existing Agreements"), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent accordance with the terms of this Section 1(b) notwithstanding that the IPO ------------ Date has not theretofore occurred, the Company will pay Executive a base salary of $215,000 per annum, payable on a bi-weekly basis or in accordance with the Company's normal payroll practices (the "Annual Base Salary"), subject ------------------ to any annual increase during the Employment Period as determined by the Board based upon the Company's achievements of budgetary and other objectives to be set by the Board and communicated to the Executive within ninety (90) days of the Pre-existing Agreementsdate hereof but no later than thirty (30) days after the IPO Date and as revised thereafter on or about the commencement of each fiscal year of the Company and in connection with the budget process for each fiscal year of the Company. Executive shall also receive a monthly automobile (or car lease) allowance of seven hundred and fifty dollars ($750.00). In addition, the terms of this Agreement Executive shall be controllingeligible to receive an annual bonus (commencing with the Company's fiscal year ending December 31, 1999) of up to fifty percent (50%) of the Annual Base Salary based upon the Company's achievement of budgetary and other objectives set by the Board. Executive's Annual Base Salary and bonus for any partial year will be prorated based upon the number of days elapsed in such year. In addition, during the Employment Period, Executive will be entitled to such other benefits approved by the Board and made available to the Company's senior executives, including four (4) weeks vacation time per annum, contributory and non-contributory Company welfare and benefit plans, medical, death benefit, disability and life insurance plans and reimbursement of reasonable business expenses.

Salary, Bonus and Benefits. For services rendered by the Employee on -------------------------- behalf of the Company during the Employment Term, the following salary, bonus and benefits shall be provided to the Employee by the Company: (a) The Company shall pay to the Employee, in equal installments, according to the Company's ’s then current practice for paying its executive officers in effect from time to time during the Employment Term, an annual base salary at the initial rate of One Four Hundred Ninety Fifty Thousand Dollars ($190,000450,000). This salary shall be subject to annual review by the Human Resources Committee of the Board (the "“Committee") and may be increased, but not decreased, to the extent, if any, that the Committee may determine. (b) The Employee shall participate in the Sealy Corporation Annual Bonus Plan (the "“Bonus Plan"”) in accordance with the provisions of that Plan as in effect as of the date of this Agreement. The Employee's ’s Target annual bonus, as established by the Committee under the Bonus Plan as of the date of this Agreement, is thirty- five sixty percent (3560%) (his "“Target Annual Bonus Percentage"”) of annual base salary, with a range of zero percent (0%) to seventy one hundred twenty percent (70120%) of annual base salary. (c) The Employee shall be eligible for participation in such other benefit plans, including, but not limited to, the Company's ’s Profit Sharing Plan and Trust, Executive Severance Benefit Plan, Benefit Equalization Plan, Short-Term and Long Term Disability Plans, Group Term Life Insurance Plan, Medical Plan or PPO, Dental Plan, the 401(k) feature of the Profit Sharing Plan and the 1998 Stock Option Plan, as the Board may adopt from time to time and in which the Company's ’s executive officers are eligible to participate. Such participation shall be subject to the terms and conditions set forth in the applicable plan documents. As is more fully set forth in Section 7 6 hereof, the Employee shall not be entitled to duplicative payments under this Agreement and the Executive Severance Benefit Plan. (d) Without limiting the generality of Subsection 3(c) above, for so long as such coverage shall be available to the executive officers of the Company, the Employee shall be eligible to participate in the Company's ’s Group Term Life Insurance Plan with a death benefit to be provided at the level of one and one half (1 1/2½) times annual base salary at Company expense, plus extended coverage with a death benefit to be provided of at least the level in effect on the date of this Agreement for the Employee under such Plan at the Employee's ’s discretion and expense. (e) The Employee shall be entitled to take, during each calendar year period of during the Employment Term, commencing on the 1st of January after execution of this Agreement, vacation time equal to at least the greater of (i) the amount of vacation time to which the Employee is entitled four weeks per year as of the date of this Agreement, or (ii) the amount of vacation time to which the Employee would have become entitled if the Company's vacation policy in effect as of the date of this Agreement and which is applicable to its executive officers remained in effect throughout the Employment Termyear. (f) In addition, the Parties do hereby further confirm that any shares of Class A Common Stock of the Company (“Class A Shares”), and any options to purchase additional Class A Shares previously granted to Employee are in addition to, and not in lieu of, any shares or options which may be granted under any other plan or arrangement of the Company after the date of this Agreement, and (b) the various stock agreements, agreements and stock option agreements, or and any related Stockholder Agreement previously entered into (the “Stockholder Agreement”) between the Parties (such agreements being hereinafter referred to collectively as the "“Pre-existing Agreements"”), all remain in full force and effect except as otherwise provided herein. Notwithstanding the foregoing, to the extent that any provision contained herein is inconsistent with the terms of any of the Pre-existing Agreements, the terms of this Agreement shall be controlling.