EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (the “Agreement”) is made as of
the 7th day of December, 2007 and is effective as of the 1st day of
January, 2008 (the “Effective Date”),
among XXXXXXX BEDDING COMPANY,
a Delaware corporation
(the “Company”), XXXXXXX HOLDCO,
INC., a Delaware corporation, (“Holdco”), and
XXXXXXX X. XXXXXXXX, an individual resident
of the State of
Georgia (the “Executive”).
W I T N E S S E T H:
WHEREAS,
the Company and Holdco desire that the Executive accept employment as President
and Chief Operating Officer of the Company as of the Effective Date;
and
WHEREAS,
the Company, Holdco and the Executive, each desire to enter into this Agreement
and set forth in writing the terms and conditions of the Executive’s employment
with the Company;
NOW,
THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, and other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
SECTION
1. EMPLOYMENT.
1.1. Agreement.
The Company hereby agrees to employ the Executive as of the Effective Date
as
its President and Chief Operating Officer, and the Executive hereby agrees
to
serve the Company in such capacities, in each case subject to the terms and
conditions set forth herein.
1.2. Term.
The period of the Executive’s employment under this Agreement shall commence on
the Effective Date, and shall continue thereafter for a continuously (on a
daily
basis) renewing two (2) year term, without any further action by either the
Company or the Executive, unless either the Executive or the Company shall
provide written notice to the other parties hereto not to renew such term,
specifying in such notice the date of such non-renewal, in which case this
Agreement shall expire on the date that is two (2) years after the date
specified in such non-renewal notice. Notwithstanding the foregoing, this
Agreement may be earlier terminated by the Company or the Executive in
accordance with the terms of Section 6 below. The date on which termination
or
expiration of this Agreement is effective pursuant to the provisions of this
Section 1.2 or of Section 6 shall be referred to herein as the “Termination
Date”. For all purposes of this Agreement, references to the
“Term” of the Executive’s employment hereunder shall mean the period
commencing on the Effective Date and ending on the Termination
Date.
SECTION
2. POSITION
AND DUTIES. The Executive shall serve as President
and Chief Operating Officer of the Company. Executive’s duties
and responsibilities as the President and Chief Operating Officer of the Company
shall include the day-to-day management and operation of the business, as well
as those duties customarily associated with an officer with a similar title,
and
Executive shall be accountable to, and shall have such additional powers, duties
and responsibilities as may from time to time be prescribed by, the Chairman
of
the Board of Directors of the Company (the “Company Board”) and Chief
Executive Officer, the Company Board or the Board of Directors of Holdco (the
“Holdco Board”). The Executive shall perform
and discharge, faithfully, diligently, competently and in good faith, such
duties and responsibilities. The Executive (a) shall devote all of his business
time and attention and his best efforts and ability to the business and affairs
of the Company and its Subsidiaries and (b) shall not engage in other business
activities whether or not compensated during the Term without the prior written
consent of the Holdco Board (provided, however, that Executive may devote a
reasonable amount of time and attention to the management of his personal
affairs and investments or serving as a director or officer of any charitable,
religious, civic, educational or trade organizations, so long as such
activities, individually or in the aggregate, do not interfere with the
performance of the Executive’s duties and responsibilities under this
Agreement). The services of the Executive shall be based at the
offices of the Company in the Metropolitan Area; provided,
however, that the Executive acknowledges that substantial travel will
be
required because the Company conducts operations and maintains facilities
throughout the United States and elsewhere around the world.
SECTION
3. COMPENSATION.
Subject to all of the terms and conditions hereof and to the performance by
the
Executive of his duties and obligations to the Company:
3.1. Salary. As
compensation for services performed during the Term, the Company shall pay
the
Executive a salary at a rate of $500,000 per annum or such other amount as
may
from time to time be established by the Holdco Board (such annual rate of salary
in effect from time to time referred to as the “Salary”), payable at
regular intervals in accordance with the Company’s normal payroll practices now
or hereafter in effect. The Holdco Board may consider and declare
from time to time increases in the salary it pays the Executive and thereby
increase the Salary. Any and all increases in the Executive’s Salary pursuant to
this Section 3.1 shall cause the level of the Executive’s Salary hereunder to be
increased by the amount of each such increase for all purposes of this
Agreement, and the increased level of Salary as provided in this Section 3.1
shall become the level of the Executive’s Salary for the remainder of the Term
unless and until there is a further increase in Salary as provided herein.
Except as otherwise provided in this Agreement, the Salary shall be prorated
for
any period of less than a full fiscal year.
3.2. Annual
Bonus. As additional compensation for services hereunder, the Executive
shall be eligible for a bonus for each Bonus Year during the Term. The amount
of
any such bonus shall be determined based upon the achievement of specified
levels of operating performance by the Company for such Bonus Year measured
by
the business plan approved by the Board for such fiscal year (the
“EBITDA Performance”). The target bonus payable for any Bonus
Year with respect to the EBITDA Performance shall equal
70% of the Salary. The actual bonus payable for
any Bonus Year with respect to the EBITDA Performance shall be computed as
set
forth on Exhibit A attached hereto and incorporated herein by this
reference; provided, however, that the actual bonus payable, if any, in for
the
fiscal year in which termination occurs shall be determined in accordance with
the provisions in Section 7. Any bonus payable under this Section 3.2 is
referred to herein as an “Annual Bonus”. For the purpose of calculating
Executive’s Annual Bonus for each fiscal year pursuant to this Section 3.2, the
target bonus payable with respect to such fiscal year shall equal 70% of
Executive’s actual salary earned at Xxxxxxx for such year (excluding any special
bonuses paid pursuant to Section 3.4 below).
3.3. Current
Shares and Additional Stock Options. The parties acknowledge that
the Executive currently holds (a) 30,000 Class B Common Stock of Holdco (“Class
B Shares”) pursuant to the Amended and Restated Restricted Stock Agreement
between the Executive and Holdco (which superseded Xxxxxxx Company) dated April
18, 2006, as amended from time to time, and (b) 12,500 Class B Shares pursuant
to the Restricted Stock Agreement between the Executive and Holdco (which
superseded Xxxxxxx Company which superseded THL Bedding Holding Company) dated
February 21, 2004, which 12,500 Class B Shares vested upon the sale of Sleep
Country USA, Inc. on or about July 24, 2006 (collectively, the “Previous
Stock Agreements”). Pursuant to the Previous Stock Agreements,
the Executive is a participant in the Second Amended and Restated Xxxxxxx
Holdco, Inc. Equity Incentive Plan, as amended from time to time (the
“Plan”) and has also entered into the Securityholders Agreement between
Holdco and Executive dated as of February 9, 2007 (“Securityholders
Agreement”) and the Registration Rights Agreement between Holdco and
Executive dated as of February 9, 2007 (“Registration Rights
Agreement”). Holdco will issue Executive options to purchase an
additional 30,000 shares of the Class B Shares under the Plan, which options
will be subject to vesting and terms and conditions as provided in the stock
option agreement between Holdco and the Executive dated as of the date of
issuance (the “Stock Option Agreement”). These options
to purchase Class B Shares will be issued after formal approval by the Holdco
Board of the same.
3.5. Business
Expenses. During the Term, the Executive shall be entitled to receive prompt
reimbursement by the Company for all reasonable business expenses incurred
by
him on behalf of the Company or any of its Subsidiaries or
Affiliates in performing services hereunder; provided,
however, that the Executive shall properly account therefor in accordance
with requirements for federal income tax deductibility and the Company’s and/or
Company Board’s policies and procedures.
3.6. Fringe
Benefits. At the election of the Executive and during the Term,
the Executive shall be entitled to participate in or receive benefits under
any
life insurance, health and accident plans, retirement plans and other similar
fringe benefit arrangements made generally available by the Company to its
executives and key management employees, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans and
arrangements. The Company acknowledges and agrees that the Executive will
continue to participate in and receive benefits under (at the current level)
the
employee benefit plans which the Executive is currently participating, subject
to changes in such plans applicable to all other employees similarly
situated. These benefits include an annual executive physical,
financial planning, an additional long term disability insurance policy provided
at no cost to Executive, and a $1.0 million term life insurance policy,
convertible to whole life, which can be assumed by the Executive.
Notwithstanding any other arrangements that the Company may make available
from
time to time to its other executives or key management employees, the Salary,
the bonuses payable under this Agreement and participation in the
Plan as provided in Section 3.3 of this Agreement shall be
in lieu of the Executive’s participation in any other bonus, equity incentive or
equity-type incentive plans established by the Company, except that the
Executive shall be entitled to participate in any supplemental executive
retirement plans, “401(k) plans” and profit sharing plans.
3.7. Vacations.
During the Term, the Executive shall be entitled to twenty (20) working days
of
paid vacation in each year and shall also be entitled to all paid holidays
given
by the Company to its employees. The paid vacation days shall be prorated for
any period of service hereunder less than a full year. The Executive shall
not
be entitled to cash compensation for any vacation time not taken during the
Term
and shall not be entitled to accrue unused vacation.
3.8. Transportation
Stipend. During the Term, the Executive shall be entitled to a stipend of
$750 each month to cover expenses associated with transportation, including
leasing or owning an automobile; provided, however, that the
Executive shall properly account therefor on his federal and applicable state
tax returns and related documentation in accordance with the requirements for
federal income tax deductibility and the Company’s policies and
procedures.
SECTION
4. OFFICES;
SUBSIDIARIES AND AFFILIATES; INDEMNIFICATION.
4.1. Generally.
The Executive agrees to serve during the Term, if elected or appointed thereto,
in one or more positions as an officer or director of the Company or any of
its
Subsidiaries or Affiliates, or as an officer, trustee, director or other
fiduciary of any pension or other employee benefit plan of the Company or any
of
its Subsidiaries or Affiliates. Service in such additional positions will be
without additional compensation except for reimbursement of reasonably related
business expenses on the same terms as provided elsewhere in this
Agreement.
4.2. Indemnification.
The Company agrees that in connection with the Executive’s service in additional
positions as provided under Section 4.1, the Executive shall be entitled to
the
benefit of any indemnification provisions in the charter and by-laws of the
Company and any of its Subsidiaries and Affiliates for which the Executive
serves in such an additional position and any director and officer liability
insurance coverage carried by the Company and any of its Subsidiaries and
Affiliates for which the Executive serves as an officer or director;
provided, however, that this Section 4.2 shall not impose on
the Company or any of its Subsidiaries or Affiliates any obligation to include
any such indemnification provisions in its charter or by-laws or to maintain
any
such insurance coverage.
SECTION
5. RESTRICTED
ACTIVITIES.
(A) Executive
acknowledges that (1) the Company has separately bargained and paid additional
consideration for the restrictive covenants herein; and (2) the Company will
provide certain benefits to Executive hereunder in reliance on such covenants
in
view of the unique and essential nature of the services Executive will perform
on behalf of the Company and its Subsidiaries and Affiliates and the great,
immediate and irreparable injury that would befall the Company, its Subsidiaries
and Affiliates should Executive breach such covenants.
(B) Executive
further acknowledges that his services are of a special, unique and
extraordinary character and that his position with the Company will place him
in
a position of confidence and trust with employees of the Company and its
Subsidiaries and Affiliates and with the Company’s other constituencies and will
bring him into close contact with many of the Company’s, its Subsidiaries’ and
Affiliates’ Customers, Customer Prospects, Vendors, Trade Secrets, and
Confidential Information.
(C) Executive
further acknowledges that the type and periods of restrictions imposed by the
covenants in this Section 5 are fair, reasonable and necessary to protect
the Company’s legitimate business interests and its Customer, Customer Prospect,
and/or Vendor relationships, Trade Secrets, and Confidential Information and
that such restrictions will not prevent Executive from earning a
livelihood.
(D) Having
acknowledged the foregoing, Executive covenants and agrees with Company as
follows:
5.1. Duty
of Confidentiality. Executive agrees that during his employment with the
Company and for a period of five (5) years following the termination of such
employment for any reason, Executive shall not directly or indirectly divulge
or
make use of any Confidential Information outside of his employment with
the Company (so long as the information remains confidential) without the prior
written consent of the Company. Executive shall not directly or
indirectly misappropriate, divulge, or make use of Trade Secrets for an indefinite
period of time, so long as the
information remains a Trade Secret as defined by the DUTSA and/or any other
applicable law. Executive further agrees that if he is questioned
about information subject to this agreement by anyone not authorized to receive
such information, Executive will notify the Company’s General Counsel within 24
hours. Executive acknowledges that applicable law may impose longer
duties of non-disclosure, especially for Trade Secrets, and that such longer
periods are not shortened by this Agreement.
5.2. Return
of Confidential Information And Company Property. Executive
agrees to return all Confidential Information and/or Trade Secrets within three
(3) calendar days following the termination of his employment for any
reason. To the extent Executive maintains Confidential Information
and/or Trade Secrets in electronic form on any computers or other electronic
devices owned by him, Executive agrees to irretrievably delete all such
information and to confirm the fact of deletion in writing within three (3)
calendar days following termination of employment with the Company for any
reason. Executive also agrees to return all property in his
possession at the time of the termination of his employment with the Company,
including but not limited to all documents, records, tapes, and other media
of
every kind and description relating to the Business of the Company and its
Customers, Customer Prospects, and/or Vendors, and any copies, in whole or
in
part, whether or not prepared by you, all of which shall remain the sole and
exclusive property of the Company.
5.3. Proprietary
Rights. Proprietary Rights shall be promptly and fully disclosed
by Executive to the Company’s General Counsel and shall be the exclusive
property of the Company as against Executive and Executive’s successors, heirs,
devisees, legatees and assigns. Executive hereby assigns to the
Company his entire right, title, and interest therein and shall promptly deliver
to the Company all papers, drawings, models, data, and other material relating
to any of the foregoing Proprietary Rights conceived, made, developed, created
or reduced to practice by Executive as aforesaid. All copyrightable
Proprietary Rights shall be considered “works made for
hire.” Executive shall, upon the Company’s request and at its
expense, execute any documents necessary or advisable in the opinion of the
Company’s counsel to assign, and confirm the Company’s title in the foregoing
Proprietary Rights and to direct issuance of patents or copyrights to the
Company with respect to such Proprietary Rights as are the Company’s exclusive
property as against Executive and Executive’s successors, heirs, devisees,
legatees and assigns under this Section 5.3. or to vest in the Company
title to such Proprietary Rights as against Executive and Executive’s
successors, heirs, devisees, legatees and assigns, the expense of securing
any
such patent or copyright, however, to be borne by the Company.
5.4. Non-Competition. Executive
covenants and agrees that, during the term of his employment with the Company
and for two (2) years after the termination thereof, regardless of the reason
for the employment termination, Executive will not, directly or indirectly,
anywhere in the Continental United States, on behalf of any Competitive Business
serve in a senior executive or similar capacity, whether as owner, partner,
investor, consultant, agent, employee or co-venturer, or undertake any planning
for any Competitive Business.
5.5. Non-Solicitation
of Customers, Customer Prospects, and Vendors. Executive also
covenants and agrees that during the term of his employment with the Company
and
for two (2) years after the termination thereof, regardless of the reason for
the employment termination, Executive will not, directly or indirectly, solicit
or attempt to solicit any business from any of the Company’s Customers, Customer
Prospects, and/or Vendors with whom he had business related contact during
the
last two (2) years of his employment with the Company.
5.6. Non-Solicitation
of Employees. Executive also covenants and agrees that during the
term of his employment with the Company and for two (2) years after the
termination thereof, regardless of the reason for the employment termination,
Executive will not, directly or indirectly, on his own behalf or on behalf
of or
in conjunction with any person or legal entity, recruit, solicit, or induce,
or
attempt to recruit, solicit, or induce, any non-clerical employee of the Company
with whom Executive had personal contact or supervised while performing his
Job
Duties, to terminate their employment relationship with the
Company.
5.7. No
Disparagement. Executive will not make any negative, disparaging
or defamatory statement, comment, or remark, directly or indirectly, either
in
writing or any other medium, regarding the Company, Xxxxxx X. Xxx Partners,
or
any of their respective officers, directors, employees, affiliates,
subsidiaries, successors and assigns, compelled truthful testimony under oath
being expressly accepted.
5.8. False
Claims Representations, Cooperation and Promises. Executive also
agrees to disclose to the Company any information he learns concerning any
conduct involving the Company that he has any reason to believe may be
unlawful. Executive promises to cooperate fully with the Company
during and after his employment with the Company in any investigation the
Company undertakes into matters occurring during his employment with
Company. Executive agrees that, as and when requested by the Company
whether during or after his employment with the Company, he will fully cooperate
with Company in effecting a smooth transition of his responsibilities to
others. If requested by the Company, Executive will promptly and
fully respond to all inquiries from the Company and its representatives relating
to any claims or lawsuits which relate to matters which occurred during his
employment with the Company. If Executive is contacted as a potential
witness to any claim or in any litigation at any time, he will notify Company
of
any such contact or request within one (1) day after learning of it and will
permit the Company to take all steps it deems to be appropriate, if any, to
prevent his involvement, or to be present during any such
discussions. This Section does not prohibit Executive’s participation
as a witness to the extent otherwise legally required but does require that
Executive provide Company with notice and the opportunity to object and/or
participate.
5.9. Outside
Activities. The Executive agrees that, during his employment with the
Company, he will not undertake any outside activity (except as explicitly
allowed pursuant to Section 2), whether or not competitive with the business
of
the Company or any of its Subsidiaries or Affiliates, that could reasonably
give
rise to a conflict of interest with his duties and obligations to the Company
or
any of its Subsidiaries or Affiliates.
5.10. Ownership
of Securities. Notwithstanding the provisions set forth herein, the
Executive shall have the right to (a) invest in or acquire any class of
securities issued by any Person not engaged in a Competitive Business, or (b)
acquire as a passive investor (with no involvement in the operations or
management of the business) up to 1% of any class of securities which is (i)
issued by any Person engaged in a Competitive Business, and (ii) publicly traded
on a national securities exchange or over-the-counter market.
SECTION
6. TERMINATION. Subject
to the respective continuing obligations of the parties hereto, including those
set forth in Section 5, the Executive’s employment by the Company hereunder may
be terminated prior to the expiration of the Term as follows:
6.1. Death.
The Executive’s employment hereunder shall terminate upon his
death.
6.2. Incapacity.
If the Executive shall have been unable to perform his duties hereunder by
reason of any physical or mental illness, injury or other incapacity (a) for
any
period of sixty (60) consecutive days or (b) for a total of one hundred twenty
(120) days in any period of twelve (12) consecutive calendar months, in the
reasonable judgment of the Holdco Board, after consultation with such experts,
if any, as the Holdco Board may deem necessary or advisable, the Company may
terminate the Executive’s employment hereunder by written notice to the
Executive.
6.3. Cause.
The Company may terminate the Executive’s employment hereunder for Cause at any
time upon written notice to the Executive. For purposes of this Agreement,
the
Company shall have “Cause” to terminate the Executive’s employment
hereunder upon: (a) the Executive’s breach of any of his obligations
set forth in this Agreement, which breach is not cured within fifteen (15)
days
after receipt by the Executive of written notice from the Holdco Board of such
breach; (b) the Executive’s breach of his fiduciary duties as an officer or
director of the Company or any of its Subsidiaries or Affiliates, or as an
officer, trustee, director or other fiduciary of any pension or employee benefit
plan of the Company or any of its Subsidiaries or Affiliates; or (c) the
Executive’s commission of a felony involving fraud, personal dishonesty or moral
turpitude (whether or not in connection with his employment).
6.4. Other
than for Cause. The Company may terminate the Executive’s employment
hereunder other than for Cause at any time upon written notice to the
Executive.
6.5. Good
Reason. The Executive may terminate the Executive’s employment hereunder for
Good Reason at any time upon sixty (60) days’ prior written notice to the
Company. In the event of termination of the Executive pursuant to
this Section 6.5, the Holdco Board or the Company Board may elect to waive
the
period of notice or any portion thereof. For the purposes of this Agreement,
the
Executive shall have “Good Reason” to terminate the Executive’s
employment hereunder upon: (a) material diminution in the nature or scope of
Executive’s responsibilities, duties or authority, in each case except in the
event of termination of the Executive’s employment pursuant to Section 6.1, 6.2,
6.3 or 6.6; provided, however, that the Company’s failure to
continue Executive’s appointment or election as a director or officer of any of
its Affiliates and any diminution of the business of the Company or any of
its
Affiliates, including without limitation the sale or transfer of any or all
of
the assets of the Company or any of its Affiliates, shall not constitute “Good
Reason”, or (b) material failure of the Company to provide Executive the Salary
and benefits in accordance with the terms of Section 3 hereof.
6.6. Other
than for Good Reason. The Executive may terminate his employment hereunder
at any time upon sixty (60) days prior written notice to the Company. In the
event of termination of the Executive pursuant to this Section 6.6, the Holdco
Board may elect to waive the period of notice, or any portion
thereof.
SECTION
7. COMPENSATION
UPON TERMINATION.
7.1. Death.
In the event of the Executive’s death during the Term, (a) the Company shall pay
or transfer, as the case may be, to the Executive’s designated beneficiary or,
if no beneficiary has been designated by the Executive, to his estate, (1)
his
Salary that is earned and unpaid at the date of death and (2) on the earlier
of
(i) the date of the release of the audited financial statements of the Company
for the Bonus Year during which death occurs or (ii) the date which is one
hundred twenty (120) days after the end of such Bonus Year, an amount equal
to
the product of (x) the Annual Bonus that the Executive would otherwise have
earned for such Bonus Year if death had not occurred,
multiplied by (y) a fraction, the numerator of which is the
number of days from the beginning of such Bonus Year until the date of death
and
the denominator of which is 365; and (b) Holdco shall have the right to
repurchase the Executive’s vested and unvested shares of the Class B Common
Stock of Holdco pursuant to the terms of the Previous Stock Agreements and
the
Stock Option Agreement.
7.2. Incapacity.
If the Executive’s employment shall be terminated by reason of his incapacity
pursuant to Section 6.2, then (a) the Company shall (1) continue to pay the
Executive his Salary, and the Executive shall continue to participate in the
employee benefit, retirement, compensation plans and other perquisites as
provided in Section 3, through the Termination Date, and (2) pay the Executive
on the earlier of (i) the date of the release of the audited financial
statements of the Company for the Bonus Year during which termination pursuant
to Section 6.2 occurs or (ii) the date which is one hundred twenty (120) days
after the end of such Bonus Year, an amount equal to the product of (x) the
Annual Bonus that the Executive would otherwise have earned for such Bonus
Year
if termination pursuant to Section 6.2 had not occurred,
multiplied by (y) a fraction, the numerator of which is the
number of days from the beginning of such Bonus Year until the date of
termination pursuant to Section 6.2 and the denominator of which is 365; and
(b)
Holdco shall have the right to repurchase the Executive’s vested and unvested
shares of the Class B Common Stock of Holdco pursuant to the terms of the
Previous Stock Agreements and the Stock Option Agreement.
7.3 Cause
or Without Good Reason. If the Company shall terminate the Executive’s
employment hereunder for Cause pursuant to Section 6.3, or the Executive
shall terminate the Executive’s employment hereunder without Good Reason
pursuant to Section 6.6, the Company shall have no further obligations to the
Executive under this Agreement other than the payment of his Salary through
the
Termination Date.
7.4. Other
than for Cause; Good Reason.
(a) If
the Company shall terminate the Executive’s employment hereunder without Cause
pursuant to Section 6.4 or the Executive shall terminate his employment
hereunder for Good Reason pursuant to Section 6.5, then:
(1)
the Company shall pay to the
Executive:
(A)
as soon as reasonably practicable
after the Termination Date, his Salary through the Termination
Date;
(B)
as soon as reasonably practicable
following the last day of the month in which the Termination Date occurs, his
Annual Bonus as described in Section 3.2, subject to
the following: For purposes of computing the percentage of
Targeted EBITDA which has been achieved pursuant to Exhibit A (the
“Applicable Percentage”), the Company shall compare (i) the actual EBITDA
achieved from the beginning of the fiscal year in which the Termination Date
occurs through the last day of the month in which the Termination Date occurs
to
(ii) the budgeted EBITDA from the beginning of the fiscal year in which the
Termination Date occurs through the last day of the month in which the
Termination Date occurs. The amount of the Annual Bonus payable to the
Executive under this Section 7.4(a)(1)(B) shall be equal to (x) the applicable
percentage of Salary set forth opposite the Applicable Percentage on Exhibit
A, multiplied by (y) the Executive's Salary paid or payable from the
beginning of the fiscal year in which the Termination Date occurs through the
Termination Date; and,
(C)
for a period of two (2) years after
the Termination Date, severance at a rate equal to 100% of his Salary in effect
at the time notice of termination is given;
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(2) Holdco
shall have the right to repurchase the Executive’s vested and unvested
shares of the Common Stock of Holdco pursuant to the terms of the
Previous
Stock Agreements and the Stock Option Agreement, Securityholders
Agreement
and Registration Rights Agreement;
and
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(3) until
the earlier to occur of (A) the passage of two (2) years after the
Termination Date or (B) the date on which the Executive commences
other
employment in connection with which the Executive is eligible to
receive
medical and dental benefits (including self-employment or engaging
in an
enterprise as a sole proprietor or partner) (the “Benefits Termination
Date”), if the Executive was participating in any Company medical,
vision and dental plans pursuant to Section 3.6 and subject to any
employee contribution applicable to Executive as of the Termination
Date, the Company shall contribute to the premium cost of Executive’s
coverage and that of Executive’s qualified dependents under its medical,
vision, and dental plans at the same rate that it contributes to
the
premium cost for its active executives and their qualified
dependents.
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(b) The
obligations of the Company to the Executive under this Section 7.4 (other than
Section 7.4(a)(1)(A)) are conditioned upon the Executive’s signing a release of
claims in the form of Exhibit B (the “Release”) within
twenty-eight (28) days of the date on which notice of termination is given
and
upon such Release remaining in full force and effect thereafter. All severance
payments under this Section 7.4 will be in the form of salary continuation,
payable in accordance with the normal payroll practices of the Company and
will
begin at the Company’s next regular payroll period following the effective date
of the Release, but shall be retroactive to the Termination Date.
7.5. Early
Termination of Severance Benefits. If the Executive’s employment hereunder
is terminated by the Company without Cause pursuant to Section 6.4 or the
Executive shall terminate his employment hereunder for Good Reason pursuant
to
Section 6.5, and Executive subsequently engages in the activities prohibited
by
Section 5, then the Company may thereafter immediately terminate and shall
not
be required to continue on behalf of the Executive or his dependents and
beneficiaries any compensation provided for in Section
7.4 other than those benefits that the Company may be
required to maintain for the Executive under applicable law.
7.6. Continuation
of Health Care Benefits. If Executive was enrolled in the Company’s medical,
vision, and/or dental plans as of the Termination Date, then upon the expiration
of the Company’s obligations pursuant to this Section 7 with respect to such
medical, vision and/or dental benefits, the Executive may elect to continue
Executive’s participation and that of Executive’s qualified dependents in those
plans for the remainder of the COBRA period, if any, by paying the full premium
cost plus an administrative fee, without regard to any provision of this
Agreement.
7.7. Post-Termination
Obligations Generally. Except as expressly set forth in this Section 7, and
in the Previous Stock Agreements, the Stock Option Agreement, the
Securityholders Agreement and Registration Rights Agreement, the Company and
Holdco shall have no further obligations to the Executive following expiration
of the Term, and performance by the Company and/or Holdco of any obligation
specifically provided in this Section 7 shall constitute full settlement of
any
claim that the Executive may have on account of such termination against the
Company and/or Holdco or their respective Subsidiaries and Affiliates and all
of
their respective past and present officers, directors, stockholders, controlling
Persons, employees, agents, representatives, successors and assigns and all
other others connected with any of them, both individually and in their official
capacities.
7.8. Payments
after Death. Should the Executive die after the termination of his
employment with the Company while any amounts are payable to him hereunder,
this
Agreement shall inure to the benefit of and be enforceable by Executive’s
executors, administrators, heirs, distributees, devisees and legatees, and
all
amounts payable hereunder shall be paid in accordance with the terms of this
Agreement to Executive’s devisee, legatee or other designee or, if there is no
such designee, to his estate.
SECTION
8. CONFLICTING
AGREEMENTS. The Executive hereby
represents and warrants that the execution of this Agreement and the performance
of the Executive’s obligations hereunder will not breach or be in conflict with
any other agreement to which the Executive is a party or by which the Executive
is bound and that the Executive is not now subject to any covenants against
competition, non-solicitation or similar covenants that would affect the
performance of the Executive’s obligations hereunder or would restrict the
Company in its operations, including hiring any additional
executives. The Executive has provided the Company with true and
correct copies of all agreements that remain binding between the Executive
and
the Executive’s former employer or employers and any similar agreements
governing the Executive’s rights and obligations relating to any former
employer. The Executive will not disclose to or use on behalf of Holdco or
the
Company any confidential or proprietary information or trade secrets of a third
party without such party’s consent.
SECTION
9. WITHHOLDING. Except
as otherwise expressly provided, all payments made by the Company under this
Agreement shall be net of any tax or other amounts required to be withheld
by
the Company under any applicable law or legal requirement.
SECTION
10. NOTICES.
All notices, requests and demands to or upon the parties hereto to be effective
shall be in writing, by facsimile, by overnight courier or by registered or
certified mail, postage prepaid and return receipt requested, and shall be
deemed to have been duly given or made upon: (a) delivery by hand, (b) one
business day after being sent by nationally recognized overnight courier; or
(c)
in the case of transmission by facsimile, when confirmation of receipt is
obtained. Such communications shall be addressed and directed to the parties
as
follows (or to such other address as either party shall designate by giving
like
notice of such change to the other party):
If
to the
Executive:
Xxxxxxx
X. Xxxxxxxx
If
to the
Company:
Xxxxxxx
Holdco, Inc.
Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx, 00000
Attention:
Chief Executive Officer, General Counsel
and
Executive Vice President – Human Resources
Facsimile:
(000) 000-0000
with
copies to:
Xxxxxx
X. Xxx Partners,
L.P.
00
Xxxxx
Xxxxxx
Xxxxxx,
XX 00000
Attention: Xxxxx
X. Xxxxxx
Xxxx
X. Xxxxxxxx
Xxxxxx
Xxxxxx
Facsimile:
(000) 000-0000
and
Weil,
Gotshal & Xxxxxx, LLP
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
Xxxxx Xxxxxx, Esq.
Facsimile:
(000) 000-0000
SECTION
11. DEFINITIONS;
CERTAIN RULES OF CONSTRUCTION. Certain capitalized
terms are used in this Agreement with the specific meanings defined below in
this Section 11. Except as otherwise explicitly specified to the contrary or
unless the context clearly requires otherwise, (a) the capitalized term
“Section” refers to sections of this Agreement, (b) the capitalized term
“Exhibit” refers to exhibits to this Agreement, (c) references to a
particular Section include all subsections thereof, (d) the word
“including” shall be construed as “including, without limitation”, and
(e) references to “$” mean United States dollars.
11.1. “Affiliate”
shall mean (a) any Person directly or indirectly controlling, controlled by
or
under direct or indirect common control with the Company (or other specified
Person), (b) any other Person which, together with its Affiliates (as defined
in
clause (a) above), shall, directly or indirectly, own beneficially or control
the voting of at least 10% of the ownership interest in the Company (or other
specified Person) and (c) any other Person of which the Company (or other
specified Person) and its Affiliates (as defined in clauses (a) and (b) above)
shall, directly or indirectly, own beneficially or control the voting of at
least 10% of any class of outstanding capital stock or other evidence of
beneficial interest or of any interest as a general partner or joint
venturer.
11.2. “Agreement”
is defined in the Preamble to this Agreement.
11.3. “Annual
Bonus” is defined in Section 3.2.
11.4. “Benefits
Termination Date” is defined in Section 7.4(a)(3).
11.5. “Bonus
Year” means the fiscal year of the Company, provided, however,
that in the event the fiscal year of the Company is changed, any calculations
made under Section 3.2 and Exhibit A hereto shall be proportionately
adjusted as the Board, in its sole and absolute discretion, shall deem
appropriate.
11.6. “Business
of the Company” means the highly competitive business of developing,
manufacturing, marketing, distributing, and/or selling sleep products, including
mattresses, foundations, changing pads and covers, and bedding components for
the same.
11.7. “Cause”
is defined in Section 6.3.
11.8. “Common
Stock” means the common stock, $.01 par value, of Holdco.
11.9 “Class
B Shares” is defined inSection 3.3
11.10. “Company”
is defined in the preamble to this Agreement.
11.11. “Company
Board” is defined in Section 2.
11.12. “Competitive
Business” means any firm, partnership, joint venture, corporation and/or any
other entity and/or person, including but not limited to Sealy Corporation,
Serta International, Spring Air Company, Select Comfort Corporation,
Tempur-Pedic International, Inc., King Koil Licensing Company, Inc., and/or
any
licensee of such entity, that develops, manufactures, markets, distributes,
and/or sells any of the sleep products described in Section
11.6.
11.13. “Confidential
Information” means information about the Company and its Customers, Customer
Prospects, and/or Vendors that is not generally known outside of the Company,
which you will learn of in connection with your employment with the
Company. Confidential Information may include, without limitation:
(1) the terms of this Agreement, except as necessary to inform a subsequent
employer of the restrictive covenants contained herein and/or your attorney,
spouse, or professional tax advisor and, even as to such a person, only if
the
person agrees to honor this confidentiality requirement; (2) the Company’s
business policies, finances, and business plans; (3) the Company’s financial
projections, including but not limited to, annual sales forecasts and targets
and any computation(s) of the market share of Customers and/or Customer
Prospects; (4) sales information relating to the Company’s product roll-outs;
(5) customized software, marketing tools, and/or supplies that you may be
provided access to by the Company and/or may create; (6) the identity of the
Company’s Customers, Customer Prospects, and/or Vendors (including names,
addresses, and telephone numbers of Customers, Customer Prospects, and/or
Vendors); (7) any list(s) of the Company’s Customers, Customer Prospects, and/or
Vendors; (8) the account terms and pricing upon which the Company obtains
products and services from its Vendors; (9) the account terms and pricing of
sales contracts between the Company and its Customers; (10) the proposed account
terms and pricing of sales contracts between the Company and its Customer
Prospects; (11) the names and addresses of the Company’s employees and other
business contacts of the Company; and (12) the techniques, methods, and
strategies by which the Company develops, manufactures, markets, distributes,
and/or sells any of the sleep products described in Section
11.6.
11.14. “Customers”
means any firm, partnership, corporation and/or any other entity and/or person
that purchased or purchases from the Company any of the sleep products described
in Section 11.6.
11.15. “Customer
Prospects” means any firm, partnership, corporation and/or any other entity
and/or person reasonably expected by the Company to purchase from the Company
any of the sleep products described in Section 11.6.
11.16. “$”
is defined in the introductory paragraph to this Section 11.
11.17. “EBITDA
Performance” is defined in Section 3.2.
11.18. “Effective
Date” is defined in the preamble.
11.19. “Executive”
is defined in the preamble.
11.20. “Exhibit”
is defined in the introductory paragraph to this Section 11.
11.21. “Good
Reason” is defined in Section 6.5.
11.22. “including”
is defined in the introductory paragraph to this Section 11.
11.23. “Holdco”
means Xxxxxxx Holdco, Inc., a Delaware corporation.
11.24. “Holdco
Board” is defined in Section 2.
11.25. “Metropolitan
Area” means the Atlanta, Georgia metropolitan area.
11.26. “Person”
means any individual, partnership, corporation, association, trust, joint
venture, limited liability company, unincorporated organization or entity,
and
any government, governmental department or agency or political subdivision
thereof.
11.27. “Plan”
is defined in Section 3.3.
11.32. “Previous
Stock Agreements” is defined in Section 3.3.
11.28. “Products”
means all products planned, researched, developed, tested, manufactured, sold,
licensed, leased or otherwise distributed or put into use by the Company or
any
of its Subsidiaries or Affiliates, together with all services provided or
planned by the Company or any of its Subsidiaries or Affiliates, during the
Executive’s employment.
11.29. “Proprietary
Rights” means any and all inventions, discoveries, developments, methods,
processes, compositions, works, supplier and customer lists (including
information relating to the generation and updating thereof), concepts, and
ideas (whether or not patentable or copyrightable) conceived, made, developed,
created, or reduced to practice by Executive (whether at the request or
suggestion of the Company or otherwise, whether alone or in conjunction with
others, and whether during regular hours of work or otherwise) prior to or
during Executive’s, which may be directly or indirectly useful in, or related
to, the Business of the Company or any business or products contemplated by
the
Company while Executive was or is an employee, officer, or director of the
Company.
11.30. “Release”
is defined in Section 7.4(b).
11.31. “Registration
Rights Agreement” is defined in Section 3.3.
11.32. “Salary”
is defined in Section 3.1.
11.33. “Section”
is defined in the introductory paragraph to this Section 11.
11.34. Securityholders
Agreement” is defined in Section 3.3.
11.35. “Stock
Option Agreement” is defined in Section 3.3.
11.36. “Subsidiary”
means any Person of which the Company (or other specified Person) shall,
directly or indirectly, own beneficially or control the voting of at least
a
majority of the outstanding capital stock (or other shares of beneficial
interest) entitled to vote generally or at least a majority of the partnership,
joint venture or similar interests, or in which the Company (or other specified
Person) or a Subsidiary thereof shall be a general partner or joint venturer
without limited liability.
11.37. “Term”
is defined in Section 1.2.
11.38. “Termination
Date” is defined in Section 1.2.
11.39. “Trade
Secret” means Confidential Information which meets the additional
requirements of the Delaware Uniform Trade Secrets Act (“DUTSA”), 6 Del. Code
Xxx. §§ 2001-2011, and/or under any other applicable law.
11.40. “Vendors”
means any individual and/or entity that provided goods and services to the
Company.
SECTION
12. MISCELLANEOUS.
No provision of this Agreement
may be modified, waived or discharged
unless such waiver, modification or discharge is approved by the Board and
agreed to in writing by the Executive and such officer as may be specifically
authorized by the Board in connection with such approval. No waiver by either
party hereto at any time of compliance with or of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
SECTION
13. GOVERNING LAW AND
REMEDIES. In addition to any other remedies at law or in
equity it may have, each party shall be entitled to seek equitable relief,
including injunctive relief and specific performance, in connection with a
breach of the provisions of this Agreement. The Company and Executive
acknowledge and agree that they are bound by their arbitration obligations
under
Exhibit C attached hereto, which the Company and Executive also hereby
agree to execute contemporaneously and is an integral part of this
Agreement. The Company and Executive agree and acknowledge that all
provisions of this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware exclusively and without
reference to principles of conflict of laws; provided, however, the Federal
Arbitration Act (“FAA”) will supersede state laws to the extent
inconsistent. The Arbitrator(s) shall have no authority to apply the
law of any other jurisdiction.
|
/s/
SGF
|
Your
initials to acknowledge agreement to Governing Law and Remedies provision
in Section 13.
|
SECTION
14. SEVERABILITY.
If any portion or provision of this Agreement shall to any extent be declared
illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision
in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law.
SECTION
15. COUNTERPARTS.
This Agreement may be executed in any one or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute
one
and the same instrument. Executed counterparts may be delivered by
facsimile transmission.
SECTION
16. ENTIRE
AGREEMENT. This Agreement, and the Plan,
constitute the entire agreement between the parties hereto, and supersede any
and all prior communications, agreements and understandings, written or oral,
with respect to the terms and conditions of the Executive’s employment with the
Company, including the letter agreement between the Executive, Xxxxxxx Company
and Xxxxxxx Bedding Company dated August 3, 2005 and the clarification of the
letter agreement dated March 14, 2006. The parties acknowledge,
however, that this Agreement does not supersede the Previous Stock Agreements,
the Securityholders Agreement or the Registrations Rights
Agreement.
SECTION
17. ASSIGNMENT.
This Agreement shall inure to the benefit of and be binding upon (a) the
Executive, his personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees and (b) the Company,
Holdco and their respective successors (including by means of reorganization,
merger, consolidation or liquidation) and permitted assigns. The Company or
Holdco may assign this Agreement to any of its Subsidiaries or to any successor
of the Company or Holdco by reorganization, merger, consolidation or liquidation
and any transferee of all or substantially all of the business or assets of
the
Company or Holdco or of any division or line of business of the Company or
Holdco with which the Executive is at any time associated. The Company requires
the personal services of the Executive hereunder and the Executive may not
assign this Agreement.
[Signatures
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IN
WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, or caused this Agreement to be executed and delivered by its duly
authorized officer, as the case may be, all as of the date first above
written.
XXXXXXX
BEDDING COMPANY
By: /s/
Xxxxxxx X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Its: Chairman
and
CEO
XXXXXXX
HOLDCO, INC.
By: /s/
Xxxxxxx X.
Xxxxx
Name:
Xxxxxxx X. Xxxxx
Its:
Chairman and
CEO
/s/
Xxxxxxx
X.
Xxxxxxxx
XXXXXXX
X. XXXXXXXX
Exhibit
A
COMPUTATION
OF EBITDA PERFORMANCE
|
%
of Budgeted EBITDA Target1
|
%
of Annual Bonus
|
%
of Salary
|
|
90%
or below2
|
0
|
0
|
|
91
|
10
|
7%
|
|
92
|
20
|
14%
|
|
93
|
30
|
21%
|
|
94
|
40
|
28%
|
|
95
|
50
|
35%
|
|
96
|
60
|
42%
|
|
97
|
70
|
49%
|
|
98
|
80
|
56%
|
|
99
|
90
|
63%
|
|
1002
|
100
|
70%
|
1
The budgeted EBITDA target
will be reset each year. The Board will approve the budgeted EBITDA
target for any fiscal year on or prior to the later of (a) the date which
is 45
days after the
end
of such fiscal year or (b) the date which is 15 days after the date of release
of the audited financial statements of the Company for the immediately preceding
fiscal year.
2
Upon attaining 100% of
budgeted EBITDA target, the amount of the Annual Bonus will be increased
thereafter by 4% of Salary for each 1% increase in EBITDA in excess of 100%
of
theTarget. The
Annual Bonus is not capped.
EXHIBIT
B – RELEASE OF CLAIMS
FOR
AND
IN CONSIDERATION OF the special payments and benefits to be provided in
connection with the termination of my employment in accordance with the terms
of
the Employment Agreement effective as of January 1, 2008 (as amended and in
effect from time to time, the "Employment Agreement") between XXXXXXX
HOLDCO, INC., a Delaware Corporation, (“Holdco”), and XXXXXXX BEDDING COMPANY, a
Delaware corporation, along with its subsidiaries, parents, joint ventures,
affiliated entities, and includes its successors and assigns or any such related
entities (the “Company”), and me, I, on my own behalf and on behalf of my
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees and all others connected with me, hereby
release and forever discharge the Company and their respective Affiliates (as
defined in the Employment Agreement) and all of their respective past and
present officers, directors, stockholders, controlling persons, employees,
agents, representatives, successors and assigns and all others connected with
any of them (all collectively, the "Released"), both
individually and in their official capacities, from any and all rights,
liabilities, claims, demands and causes of action of any type (collectively,
"Claims") which I have had in the past, now have, or might now have,
through the date of my signing of this Release of Claims, in any way resulting
from, arising out of or connected with my employment or its termination or
pursuant to any federal, state, foreign or local employment law, regulation
or
other requirement (including, without limitation, Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, and the fair employment practices laws of the state or states
in which I have been employed by the Company, each as amended from time to
time); provided, however, that the foregoing release shall not
apply to (a) any right explicitly set forth in the Employment Agreement to
special payments and benefits to be provided in connection with the termination
of my employment, (b) any right to indemnification set forth in Section 4.2
of
the Employment Agreement or (c) any rights as a participant in any retirement,
profit sharing or other employment benefit plan in accordance with the terms
of
such plans.
In
signing this Release of Claims, I acknowledge that I have had at least 21 days
from the date of notice of termination of my employment to consider the terms
of
this Release of Claims and that such time has been sufficient; that I have
been
advised in writing by the Company to seek the advice of an attorney prior to
signing this Release of Claims; and that I am signing this Release of Claims
voluntarily and with a full understanding of its terms.
I
understand that I may revoke this Release of Claims at any time within seven
days of the date of my signing by written notice to the Company and that this
Release of Claims will take effect only upon the expiration of such seven-day
revocation period and only if I have not timely revoked it.
Intending
to be legally bound, I have signed this Release of Claims under seal as of
the 7th day of December, 2007.
/s/
Xxxxxxx X. Xxxxxxxx
XXXXXXX
X. XXXXXXXX
EXHIBIT
C - ARBITRATION CLAUSE
(1) In
consideration of the benefits described in the Employment Agreement executed
by
XXXXXXX X. XXXXXXXX (the “Employee” or ”you”) and XXXXXXX HOLDCO, INC., a
Delaware Corporation, (“Holdco”), and XXXXXXX BEDDING COMPANY, a Delaware
corporation, along with its subsidiaries, parents, joint ventures, affiliated
entities, and includes its successors and assigns or any such related entities
(the “Company”) on the same date hereto and into which this Exhibit C is
incorporated (“Agreement”), the parties hereby agree that any controversy or
claim arising under federal, state and local statutory or common or contract
law
between the Company and/or Holdco and you involving the construction or
application of any of the terms, provisions, or conditions of the Agreement,
including, but not limited to, breach of contract, tort, and/or fraud, must
be
submitted to arbitration on the written request of the parties served on the
other. Arbitration shall be the exclusive forum for any such
controversy. For example, if the Company and you disagree as to
whether the Company had Cause, as defined by the Agreement, to terminate your
employment or if the Company and you have a dispute concerning the
interpretation or enforceability of one or more restrictive covenants, the
parties will resolve the dispute exclusively through arbitration. The
Arbitrator’s decision shall be final and binding on the parties.
(2) If
any claim or cause of action at law or in equity is filed by a party in any
state or federal court which results in arbitration being compelled and/or
the
claim or cause of action being dismissed, stayed, and/or removed to arbitration
pursuant to this Agreement, the party who instituted the claim or cause of
action in state or federal court, either wholly or in substantial part, shall,
at the discretion of the Arbitrator(s), reimburse the respondent for its
reasonable attorneys’ fees, costs, and necessary disbursements to the extent
permitted by law, in addition to any other relief to which it may be entitled,
related to the state or federal court claim or action.
(3) Excluding
the initial filing fee, which shall be borne by the claimant, the cost of
arbitration shall be borne by the Company, unless the Arbitrator determines
that
any claim(s) brought by you was/were wholly frivolous or
fraudulent. If an arbitration or any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party, either wholly or in substantial part, shall, at the discretion of the
Arbitrator, be entitled to its reasonable attorneys’ fees, costs, and necessary
disbursements to the extent permitted by law, in addition to any other relief
to
which it may be entitled.
(4) The
parties hereby agree that all claims must be submitted to arbitration
administered by the American Arbitration Association’s Southeast Case Management
Center in Atlanta, Georgia and the arbitration will be conducted in Atlanta,
Georgia.
(5) The
arbitration shall comply with and be governed by the American Arbitration
Association’s Commercial Arbitration Rules (“Rules”) effective as of the
execution date below, to the extent such Rules are not contrary to the express
provisions of this Agreement. The parties also agree that the
American Arbitration Association Optional Rules for Emergency Measures of
Protection (“Emergency Rules”) shall apply to proceedings under this
Agreement. The above Rules and Emergency Rules can be found at the
following page of the American Arbitration Association’s website,
xxx.xxx.xxx: xxxx://xxx.xxx.xxx/xx.xxx?xxx00000. You
acknowledge that you should read these Rules and Emergency Rules and that it
is
your responsibility to be familiar with them prior to signing the
Agreement. If you are unable to access the Rules and/or Emergency
Rules at the above website, you can request a copy of them from a Company
official prior to signing the Agreement.
(6) The
parties agree and acknowledge that all provisions of this Agreement shall be
governed by and construed in accordance with the laws of the State of
Delaware exclusively and without reference to principles of conflict of
laws; provided, however, the Federal Arbitration Act (“FAA”) will supersede
state laws to the extent inconsistent. Any claim(s) involving the
construction or application of this Agreement must be submitted to arbitration
within the statute of limitations period for such claim(s) under Delaware state
law. The Arbitrator(s) shall have no authority to apply the law of
any other jurisdiction.
(7) The
dispute shall be heard and determined by one Arbitrator, unless the parties
mutually consent in writing signed by you and an authorized representative
of
Company and/or Holdco to a panel of three (3) Arbitrators. Unless the
parties mutually consent otherwise, the parties agree and request that the
Arbitrator(s) issue a reasoned award in accordance with Commercial Arbitration
Rule R-42(b).
I
UNDERSTAND THAT BY SIGNING THIS
AGREEMENT I AM GIVING UP MY RIGHT TO A JURY TRIAL.
Executed
this 7th day of December, 2007.
(day) (month)
XXXXXXX
X.
XXXXXXXX XXXXXXX
BEDDING COMPANY
XXXXXXX
HOLDCO, INC.
/s/
Xxxxxxx X.
Xxxxxxxx By: /s/
Xxxxxxx X. Xxxxx
Name:
/s/
Xxxxxxx
X.
Xxxxx
Social
Security
#: __________________ Title:
Chairman and CEO
