EMPLOYMENT AGREEMENT
This
EMPLOYMENT
AGREEMENT
(the “Agreement”)
is made as of the 10th day of November, 2006, among XXXXXXX
BEDDING COMPANY,
a
Delaware corporation (the “Company”),
XXXXXXX
COMPANY, a
Delaware corporation (“Holdings”),
and XXXX
X. XXXXXXXX,
an
individual resident of the State of Connecticut (the “Executive”).
WHEREAS,
the Company and Holdings desire that the Executive accept employment as
President of the Company as of the Effective Date; and
WHEREAS,
the Company, Holdings 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 the Executive hereby agrees to serve the Company in such
capacity, 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
first actual working day of employment of the Executive (the
“Effective
Date”),
and shall continue thereafter for a continuously (on a daily basis) renewing
eighteen (18) month 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 eighteen (18) months 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 of the Company. Executive’s duties and
responsibilities as the President 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
Holdings (the “Holdings
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 Holdings Board (provided, however,
that
Executive may serve on the Board of Directors of up to two (2) for profit
enterprises which are not engaged in a Competitive Business (currently, Molson
Coors Brewing Co. and Xxx Xxxxxx, Inc.), and 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 $575,000 per annum or such other amount
as
may from time to time be established by the Holdings 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 Executive shall have an annual review and the Salary may be increased,
but
not decreased, from time to time. 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. 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 of termination
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 by the Executive
from the Company for such year (excluding any special bonuses paid pursuant
to
Section 3.4 below).
3.3. Restricted
Stock Agreement; Stock Options, Class A Stock.
(a) If the Executive makes the investment described in Section 3.3(b) below,
the
Executive shall be included as a participant in the Xxxxxxx Company Equity
Incentive Plan, as amended from time to time (the “Plan”),
pursuant to which Holdings will issue Executive on the Effective Date (i)
40,000
shares of the Class B Common Stock of Holdings (“Class
B Shares”),
subject to vesting and terms and conditions as provided in the restricted
stock
agreement between Holdings and the Executive dated as of the Effective Date
(the
“Restricted Stock Agreement”) and (ii) options to purchase 30,000 shares of the
Class B Common Stock of Holdings (“Stock
Options”),
subject to vesting and terms and conditions as provided in the stock option
agreement between Holdings and the Executive dated as of the date of issuance
(the “Stock Option Agreement”). The Class B Shares will be subject to the
securityholders agreement between Holdings and Executive dated as of the
same
date (“Securityholders
Agreement”)
and the registration rights agreement between Holdings and Executive dated
as of
the same date (“Registration
Rights Agreement”).
Executive will pay $0.01 per Class B Share as well as the taxes due on the
difference between the then current Fair Market Value (as defined in the
Restricted Stock Agreement) as of the date of issuance and the $0.01 per
share
paid. The Stock Options will have a strike price equal to the Fair Market
Value
(as defined in the Stock Option Agreement) as of the Effective Date.
(b) The
Executive will invest $250,000 of his personal funds in Class A Common Stock
of
Holdings (“Class A Shares”) as of the Effective Date. The Class A Shares will be
held pursuant to the terms of the Securityholders Agreement and the Registration
Rights Agreement. Executive will pay Fair Market Value (as defined in the
Securityholders Agreement) as of the Effective Date.
3.4 Signing
Bonus.
The Company will pay Executive a one-time bonus in an amount of $600,000
on the
Effective Date.
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. The Company shall pay the Executive’s
legal expenses incurred in connection with the preparation, negotiation and
execution of this Agreement and the related Agreements referenced herein,
up to
a maximum of $25,000.
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. 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 four (4) weeks 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 $1,000.00
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.
3.9. Relocation
and Interim Housing.
The Executive shall be entitled to participate in the Company’s Level 1
Relocation Package, eligibility for which shall continue for eighteen (18)
months following the Effective Date. In addition, the Company will reimburse
the
Executive for interim housing and weekend travel expenses between the
Metropolitan Area and Executive’s current residence, to a maximum amount of
$5,000.00 per month, until such time as the Executive has relocated to the
Metropolitan Area; provided,
however,
that reimbursement is subject to the Executive submitting documentation
substantiating such expenditures. The Executive agrees that he shall establish
his primary residence in the Metropolitan Area within eighteen (18) months
of
the Effective Date. Payments pursuant to this Section 3.9 shall be net of
any
tax or other amounts required to be withheld by the Company under any applicable
law or legal requirement.
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
the Excecutive, 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 eighteen (18) months after the termination thereof, regardless
of the reason for the employment termination, Executive will not, directly
or
indirectly, anywhere in the Continental United States or Canada, 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 eighteen (18) months 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 eighteen (18) months 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.
(a) 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 excepted
from this Section 5.7 and permitted.
(b)
Following the termination of the Executive’s employment for any reason, none of
the Company, Holdings or the executive leadership team and General Counsel
of
the Company or Holdings will make any negative, disparaging or defamatory
statement, comment, or remark, directly or indirectly, either in writing
or any
other medium, about the Executive externally, compelled truthful testimony
under
oath being expressly excepted from this Section 5.7 and permitted.
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 as promptly as
practicable (but in no event more than five (5) business days) 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 Holdings Board, after consultation with such experts,
if any, as the Holdings 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 material obligations set forth in this Agreement, which
breach, if capable of being cured, is not cured within fifteen (15) days
after
receipt by the Executive of written notice from the Holdings Board of such
breach; (b) the Executive’s breach of his fiduciary duties involving a matter of
material consequence 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, which breach, if capable of being cured, is not
cured within fifteen (15) days after receipt by the Executive of written
notice
from the Holdings Board of such breach; 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 Holdings
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”, (b) material failure of the Company to
provide Executive the Salary and benefits in accordance with the terms of
Section 3 hereof, or (c) failure of the Company to indemnify the Executive
(or
advance expenses in connection with indemnification) in connection with the
Executive’s services hereunder as required by the Company under law or pursuant
to its charter, by-laws or other contractual arrangements with the Executive
then in effect, which failure shall not have been cured within fifteen (15)
days
after receipt by the Company of written notice from the Executive of such
breach.
6.6. Other
than for Good Reason or Justifiable Cause.
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 Holdings Board may elect to waive
the period of notice, or any portion thereof.
6.7 Justifiable
Cause.
The Executive may terminate his employment for “Justifiable
Cause”
upon sixty (60) days prior written notice to the Company at any time within
ninety (90) days after the failure of the Company to appoint the Executive
as
Chief Executive Officer of the Company promptly after the termination, for
any
reason, of Xxxxxxx Xxxxx as Chief Executive Officer of the Company.
SECTION
7. COMPENSATION
UPON TERMINATION.
7.1. Death.
In the event of the Executive’s death during the Term, 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.
7.2. Incapacity.
If the Executive’s employment shall be terminated by reason of his incapacity
pursuant to Section 6.2, then 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.
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.
(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 sentence. 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 eighteen (18) months after the Termination Date, severance
at a
rate equal to 100% of his Salary in effect at the time notice of termination
is
given;
(2)
until the earlier to occur of (A) the passage of eighteen (18) months 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.
(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 Justifiable
Cause.
If the Executive shall terminate the Executive’s employment hereunder for
Justifiable Cause pursuant to Section 6.7, then (a) as soon as reasonably
practicable after the Termination Date, the Company shall pay his Salary
through
the Termination Date, (b) the Company shall pay to the Executive for a period
of
twelve (12) months after the Termination Date, severance at a rate equal
to 100%
of his Salary in effect at the time notice of termination is given, and (c)
the
Executive shall be entitled to participate in the Company’s Level 1 Relocation
Package with respect to the Executive’s relocation from the Metropolitan Area to
another location in the United States. The obligations of the Company to
the
Executive under this Section 7.5 (other than Section 7.5(a)) are conditioned
upon the Executive’s signing 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
7.5
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.
7.6. 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 or the Executive shall
terminate his employment hereunder for Justifiable Cause, 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 or Section 7.5, as the case may be, other
than those benefits that the Company may be required to maintain for the
Executive under applicable law.
7.7. 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.
7.8. Post-Termination
Obligations Generally.
Except as expressly set forth in this Section 7, and in the Restricted Stock
Agreement, Stock Option Agreement, the Securityholders Agreement and
Registration Rights Agreement, the Company and Holdings shall have no further
obligations to the Executive following expiration of the Term, and performance
by the Company and/or Holdings 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 Holdings 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.
7.9. 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.
7.10 Stock
Repurchases.
Upon termination of the Executive for any reason, Holdings shall have the
right
to repurchase the Executive’s vested and unvested Class B Shares and Class A
Shares pursuant to the terms of the Restricted Stock Agreement, Stock Option
Agreement, Securityholders Agreement and Registration Rights Agreement
(collectively, the “Related
Agreements”).
For purposes of each of the Related Agreements, the Executive shall be
considered a “Senior Manager” as used and defined in such Related Agreement. For
purposes of Section 3.5 of the Securityholders Agreement, a termination by
the Executive for Justifiable Cause shall have the same consequences as a
termination for “good reason” thereunder.
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 will not disclose to or use on behalf
of
Holdings 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) two
business days after being sent by nationally recognized overnight courier;
or
(c) in the case of transmission by facsimile, one business day after 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:
Xxxx
X. Xxxxxxxx
000
Xxxxx Xxxxx Xxxx
Xxxxxxxxx,
XX 00000
with
a copy to:
Xxxxxx
Xxxxxx LLP
0000
Xxxxx Xxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxx X. Xxxxx
Facsimile:
(000) 000-0000
If
to the Company:
Xxxxxxx
Bedding
Company
Xxx
Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx,
Xxxxxxx, 00000
Attention:
Chief Executive Officer, General Counsel
and
Senior Vice President - Human Resources
Facsimile:
(000) 000-0000
with
copies to:
Xxxxxx
X. Xxx Partners, L.P.
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
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:
Xxxxxxx Xxxxxx
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 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 Holdings.
11.9. “Class
A Shares”
is defined in Section 3.3
11.10 “Class
B Shares”
is defined in Section 3.3
11.11. “Company”
is defined in the preamble to this Agreement.
11.12. “Company
Board”
is defined in Section 2.
11.13. “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.
11.14. “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.
11.15. “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.
11.16. “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.
11.17. “$”
is defined in the introductory paragraph to this Section 11.
11.18. “EBITDA
Performance”
is defined in Section 3.2.
11.19. “Effective
Date”
is defined in the preamble.
11.20. “Executive”
is defined in the preamble.
11.21. “Exhibit”
is defined in the introductory paragraph to this Section 11.
11.22. “Good
Reason”
is defined in Section 6.5.
11.23. “including”
is defined in the introductory paragraph to this Section 11.
11.24. “Holdings”
means Xxxxxxx Company, a Delaware corporation.
11.25. “Holdings
Board”
is defined in Section 2.
11.26 “Justifiable
Cause”
is defined in Section 6.7.
11.27. “Metropolitan
Area”
means the Atlanta, Georgia metropolitan area.
11.28. “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.
11.29. “Plan”
is defined in Section 3.3.
11.30. “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.
11.31. “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.
11.32 “Related
Agreements”
is defined in Section 7.10.
11.33. “Release”
is defined in Section 7.4(b).
11.34. “Registration
Rights Agreement”
is defined in Section 3.3.
11.35. “Restricted
Stock Agreement”
is defined in Section 3.3.
11.36. “Salary”
is defined in Section 3.1.
11.37. “Section”
is defined in the introductory paragraph to this Section 11.
11.38. “Securityholders
Agreement”
is defined in Section 3.3.
11.39. “Stock
Options”
are defined in Section 3.3.
11.40. “Stock
Option Agreement”
is defined in Section 3.3.
11.41. “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.
11.42. “Term”
is defined in Section 1.2.
11.43. “Termination
Date”
is defined in Section 1.2.
11.44. “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.
11.45. “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/GSM 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, the Plan, the Restricted Stock Agreement, Securityholders
Agreement and Registration Rights Agreement 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.
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,
Holdings and their respective successors (including by means of reorganization,
merger, consolidation or liquidation) and permitted assigns. The Company
or
Holdings may assign this Agreement to any of its Subsidiaries or to any
successor of the Company or Holdings by reorganization, merger, consolidation
or
liquidation and any transferee of all or substantially all of the business
or
assets of the Company or Holdings or of any division or line of business
of the
Company or Holdings 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.
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BO1:\147807\04\361R04!.DOC\74339.0001
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
COMPANY
By: /s/Xxxxxxx
X. Xxxxx
Name: Xxxxxxx
X.
Xxxxx
Its: Chairman
and
CEO
/s/Xxxx
X. Xxxxxxxx
XXXX
X. XXXXXXXX
BO1:\147807\04\361R04!.DOC\74339.0001
Exhibit
A
COMPUTATION
OF EBITDA PERFORMANCE
%
of Budgeted EBITDA Target
|
%
of Annual Bonus
|
%
of Salary
|
<902
|
0
|
0
|
90
|
9.09
|
6.363
|
91
|
18.18
|
12.726
|
92
|
27.27
|
19.089
|
93
|
36.36
|
25.452
|
94
|
45.45
|
31.815
|
95
|
54.55
|
38.185
|
96
|
63.64
|
44.548
|
97
|
72.73
|
50.911
|
98
|
81.82
|
57.274
|
99
|
90.91
|
63.637
|
100
|
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 the Target. The Annual Bonus is not capped. |
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 dated as of __________
2006 (as amended and in effect from time to time, the "Employment
Agreement")
among XXXXXXX COMPANY, a Delaware corporation (“Holdings”), 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
_____ day of ________________, _________.
__________________________________________
XXXX
X. XXXXXXXX
(1) In
consideration of the benefits described in the Employment Agreement executed
by
XXXX X. XXXXXXXX (the “Employee” or ”you”) and XXXXXXX COMPANY, a Delaware
corporation
(“Holdings”), 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 Holdings 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 Holdings 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 10th day of November, 2006.
(day)
(month)
XXXX
X. XXXXXXXX XXXXXXX
BEDDING COMPANY
XXXXXXX
COMPANY
/s/Xxxx
X. Xxxxxxxx By:
/s/Xxxxxxx X. Xxxxx
Name:
/s/Xxxxxxx X. Xxxxx
Social
Security #: __________
Title:
Chariman and CEO_______________________________