SUPPLEMENT TO
EMPLOYMENT AGREEMENT
This
Supplement to the Employment Agreement (as defined below) effective
as of the 7th day of December, 2005 (the “Supplement
Agreement”) is made between CHARLES R. EITEL (the
“Executive”) and SIMMONS COMPANY (p/k/a THL BEDDING
HOLDING COMPANY), a Delaware corporation, (“Holdings”)
and SIMMONS BEDDING COMPANY (p/k/a SIMMONS 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”). In consideration
of the payment in Section 1 below, and pursuant to
Section 14 of the Executive’s Employment Agreement made
as of December 19, 2003 (“Employment Agreement”),
the Executive, Holdings and the Company hereby acknowledge and
agree that this Supplement Agreement shall amend and supplement the
Executive’s Employment Agreement. The Executive, Holdings and
the Company also acknowledge and agree that this Supplement
Agreement specifically supersedes Sections 5, 6, 7, and 9.5 of
the Employment Agreement in their entirety and Sections 14 and
19 of the Employment Agreement, but only for the purposes of
interpretation of this Supplement Agreement and only then to the
extent the terms and conditions of Sections 14 and 19 conflict
with this Supplement Agreement, so that such terms and conditions
shall have no further force or effect as of the effective date of
this Supplement Agreement. Sections 14 and 19 of the
Employment Agreement continue to be in full force and effect with
respect to the interpretation of the remaining terms of the
Employment Agreement (other than Section 5, 6, 7 and 9.5) and
the revisions set forth in this Supplement Agreement do not apply
to the same. The parties agree to the following:
1.
Consideration : In consideration for the execution by the
Executive of this Supplement Agreement, Company is increasing the
Executive’s Salary by $1,000 to $751,000 effective as of the
7th day of December, 2005. The Executive acknowledges the receipt
and sufficiency of this consideration.
2.
Restrictive Covenants .
a.
Definitions : Unless otherwise specifically defined herein,
each term used herein that is defined in the Employment Agreement
shall have the meaning assigned to such term therein.
(1) “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.
(2) “Competitive
Business(es)” include any firm, partnership, corporation,
joint venture 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 2.a.(1).
(3) The
Executive’s “Job Duties” are those duties set
forth in Section 2 of the Employment Agreement and those
duties as may from time-to-time reasonably be prescribed by the
Company during the period of Executive’s employment with the
Company.
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(4) “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 2.a.(1).
(5) “Customer
Prospects” means any firm, partnership, corporation and/or
any other entity and/or person that was reasonably expected by the
Company to purchase from the Company any of the sleep products
described in Section 2.a.(1).
(6) “Vendors”
means any individual and/or entity that provided goods and services
to the Company.
(7) “Material
Contact” means personal contact or the supervision of the
efforts of those who have direct personal contact with Customers,
Customer Prospects, or Vendors in an effort to initiate or further
a business relationship between the Company and such Customers,
Customer Prospects, or Vendors.
(8) “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 the Executive learned or will
learn of in connection with the Executive’s employment with
the Company. Confidential Information may include without
limitation: (1) the Company’s business policies,
finances, and business plans; (2) 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; (3) sales information
relating to the Company’s product roll-outs; (4) customized
software, marketing tools, and/or supplies that the Executive was
provided access to by the Company and/or created; (5) 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); (6) any
list(s) of the Company’s Customers, Customer Prospects,
and/or Vendors; (7) the account terms and pricing upon which
the Company obtains products and services from its Vendors;
(8) the account terms and pricing of sales contracts between
the Company and its Customers; (9) the proposed account terms
and pricing of sales contracts between the Company and its Customer
Prospects; (10) the names and addresses of the Company’s
employees and other business contacts of the Company; and
(11) the techniques, methods, and strategies by which the
Company develops, manufactures, markets, distributes, and/or sells
any of the sleep products described in Section 2.a.(1).
(9) “Trade
Secrets” means Confidential Information which meets the
additional requirements of the Delaware Uniform Trade Secrets Act
(“DUTSA”), 6 Del. Code Ann. §§
2001-2011, and/or under any other applicable law.
(10) “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 the 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 the Executive’s employment,
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 the Executive was or is an employee, officer, or
director of the Company.
b. The
Executive agrees that Executive’s work for the Company has
brought and will bring the Executive into close contact with many
of the Customers, Customer Prospects, Vendors, Trade Secrets, and
Confidential Information. The Executive further agrees that the
covenants in this
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Section 2
are reasonable and necessary to protect the Company’s
legitimate business interests and its Customer, Customer Prospects,
and Vendor relationships, Trade Secrets, Confidential Information,
and Proprietary Rights.
c. The
Executive agrees to faithfully perform the duties assigned to the
Executive and will not engage in any other employment or business
activity while employed by the Company that might interfere with
the Executive’s full-time performance of the
Executive’s duties for the Company or cause a conflict of
interest. The Executive agrees to abide by all of the
Company’s policies and procedures, which may be amended from
time-to-time.
d. The
Executive further agrees that, due to the Executive’s
position, the Executive’s engaging in any activity that may
breach this Supplement Agreement will cause the Company great,
immediate and irreparable harm.
e. Duty
of Confidentiality . The Executive agrees that during
Executive’s employment with the Company and for a period of
five (5) years following the termination of such employment
for any reason, the Executive shall not directly or indirectly
divulge or make use of any Confidential Information outside of
Executive’s employment with the Company (so long as the
information remains confidential) without the prior written consent
of the Company. The Executive shall not directly or indirectly
misappropriate, divulge, or make
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