EXECUTION COPY
AMENDMENT TO
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amendment No. 1 (the "Amendment") to the Amended and
Restated Employment Agreement is made and entered into on the 25th day of April,
2005 between Foamex International Inc., a Delaware corporation and its primary
operating subsidiary Foamex L.P. (collectively the "Company"), and Xxxxxx X.
Xxxxxxx ("Executive").
WHEREAS, the Company and Executive executed an employment
agreement, dated August 20, 2002 (the "Prior Agreement"), governing the terms of
Executive's employment with the Company and amended and restated the employment
agreement (the "Agreement") on January 27, 2004; and
WHEREAS, the Board of Directors has reviewed the Executive's
performance and desires to amend certain provisions in the Agreement as set
forth herein; and
WHEREAS, the terms and conditions of the Agreement not
specifically amended herein shall remain in full force and effect.
NOW, THEREFORE, the parties hereby agree that the following
provisions will be amended as follows:
ARTICLE III - Compensation and Expenses
Section 3.1 (c) (i) shall now read in its entirety as follows:
Bonus. (i) During the Term, Executive shall be
eligible to earn a fiscal year target bonus award of 100% of Base Salary
("Annual Bonus"), which shall be based upon the attainment of Company
performance targets for the applicable fiscal year, as measured against a
written set of reasonable performance criteria communicated to Executive for
such fiscal year. The Annual Bonus shall be awarded pursuant the Foamex Salaried
Incentive Plan (the "SIP"), and, except as otherwise provided for herein, shall
be subject to the terms and conditions of the SIP. For 2005, the Executive shall
be eligible for a special performance incentive (the "Incentive") of $250,000
provided the Company achieves $90 million of EBITDA (the "Incentive EBITDA")
prior to accruals for the Incentive or bonus obligations pursuant to the SIP.
The Incentive EBITDA will be adjusted by mutual agreement of the parties for
material changes to the Company's business (acquisitions, asset divestitures,
mergers, and similar transactions). The Incentive will be reduced by $0.50 for
each dollar earned under the SIP for EBITDA performance above the Incentive
EBITDA. For each Annual Bonus received by Executive during the Term, Executive
shall be required to use 20% of the net after-tax proceeds of each Annual Bonus
to purchase shares of Company common stock within the 90-day period of
Executive's receipt of each Annual Bonus; provided, however that the
Compensation Committee may, in its sole discretion, extend such 90-day period.
The ninety day period will be extended automatically for each day the Executive
is prohibited from purchasing Foamex securities by the Company's Securities
Trading Policy or by applicable securities laws. Notwithstanding the forgoing,
Executive shall be entitled to receive such other incentive compensation as the
Compensation Committee of the Board may, in its sole discretion, award.
Change in Control Protection
Article 5 - Effect of Termination.
Section 5.5 (c) and (d) shall now read in their entirety as follows:
(c) In the event of a termination of Executive's employment by
Executive for Good Reason or by the Company for reasons other than for Cause,
death or Disability at any time following the eighteen (18) month anniversary of
the Effective Date, Executive shall receive an amount, payable in twenty-four
equal monthly installments in accordance with the Company's regular payroll
policies, equal to sum of the following: two multiplied by the amount of (i)
Executive's current Base Salary on date his employment is terminated, and (ii)
Executive's Annual Bonus, calculated as though the Company and Executive had
attained 100% of the performance targets for the applicable fiscal year in which
Executive's employment terminates, and without regard to the requirement that
Executive use 20% of the net after-tax proceeds of such Annual Bonus to purchase
shares of Company common. Notwithstanding the foregoing, in the event
Executive's employment is terminated by Executive for Good Reason on account of
a Change in Control or by the Company for reasons other than for Cause, death or
Disability within the twenty four month period commencing on the date of a
Change in Control, Executive's Change in Control Protection Agreement with the
Company attached hereto as Exhibit A shall govern.
(d) In the event of a termination of Executive's employment by
Executive for Good Reason or by the Company for reasons other than Cause or
Disability, Executive shall be entitled medical coverage under the Company's
medical plan in accordance with Section 3.1(b) during the twenty-four (24) month
period commencing on the date Executive's employment is terminated (the
"Severance Term"). Upon the expiration of the Severance Term, Executive shall be
eligible to elect medical continuation coverage under the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA").
Section 4 (a) of the Executive's Change in Control Protection Agreement (Exhibit
A to the Agreement) will now read in its entirety as follows:
(a) Termination following a Change in Control.
If Executive's employment is terminated during the twenty four (24) month period
following the Operative Date by the Company without Cause (other than as a
result of the death or Disability of Executive) or by Executive with Good Reason
(any such termination, a "Qualifying Termination"), the Company shall, (i) pay
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to Executive his accrued but unpaid base salary through the date of the
Qualifying Termination; (ii) pay to Executive an amount, payable at the
Executives election either as a lump sum payment or in twenty four equal monthly
installments in accordance with the Company's regular payroll policies, equal to
two times the sum of (A) the greater of (x) Executive's annual base salary in
effect immediately prior to the Operative Date, and (y) Executive's annual base
salary as of the date of such Qualifying Termination, and (B) Executive's annual
bonus, calculated as though the Company and Executive had attained 100% of the
performance targets for the applicable fiscal year of the Company during which
the Qualifying Termination occurs; and (iii) continue for twenty four (24)
months Executive's participation in the health, medical and life insurance
benefits and/or coverage provided to Executive either (1) immediately prior to
the Operative Date, or (2) as of the date of such Qualifying Termination,
whichever is more favorable to Executive; provided, however, that (a) such
benefit continuation is subject to the terms and 3conditions of such plans, (b)
group life insurance continuation is subject to a limit of three years following
such Qualifying Termination, and (c) Executive shall cease to be covered by
medical and/or dental plans of the Company at such time Executive becomes
covered by like plans of another company.
IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement effective as of the date first above written.
FOAMEX INTERNATIONAL INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Xxxxx: Executive Vice President and
General Counsel
EXECUTIVE
/s/ Xxxxxx X. Xxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx
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