Exhibit 10.1
SEPARATION AGREEMENT
This
separation agreement (this "Agreement") is entered into as of
December 15th, 2006 by and between SEALY, INC., an Ohio corporation
(the
"Company"), and James B. Hirshorn, an employee of the Company
("Hirshorn").
STATEMENT OF PURPOSE. Hirshorn has informed the Company that he
desires
to leave the Company's employment. The Company and Hirshorn have
entered into
negotiations with a view toward resolving all issues relating to
Hirshorn's
employment with the Company and the amicable termination of that
employment.
NOW,
THEREFORE, in consideration of the Statement of Purpose and the
terms and provisions of this Agreement, the parties hereto mutually
agree as
follows:
1.
RESIGNATION AND TERMINATION OF EMPLOYMENT. As the result of the
resignation from Company employment by Hirshorn, the Company does
hereby agree
to terminate Hirshorn's employment, with said termination and
resignation to
be effective as of 5:00pm on December 15, 2006 ("Effective
Date").
2.
OBLIGATIONS OF THE COMPANY. The Company agrees to pay or
provide
Hirshorn with the following:
(a)
Compensation and
benefits to which Hirshorn is otherwise entitled as
an employee of the Company at Hirshorn's current rate and
status
through the Effective Date in accordance with applicable law
and
Company's generally applicable policies and procedures;
(b)
Hirshorn's vested
interest in Company sponsored benefit plans
including the Profit-Sharing Retirement and 401-(k) plan shall
be
paid under the terms, provisions and conditions of said plans,
and
nothing in this Agreement shall modify or override the terms,
provisions or conditions of those plans;
(c)
After the Effective
Date, Hirshorn shall be entitled to participate
in the Company's health insurance programs in accordance with
the
applicable COBRA regulations;
(d)
Hirshorn shall be paid
any annual bonus which he earns for Sealy's
fiscal year 2006 based on the terms of that bonus program,
including
the Company's 2006 performance, with any such payment being
made
when bonuses under Sealy's Bonus Plan are paid to other bonus
plan
participants;
(e)
Hirshorn will not be
paid any annual bonus for 2007 since he
resigned and will not earn any 2007 bonus under the terms of
Sealy's
Bonus Plan;
(f)
Sealy shall pay
Hirhorn One Hundred Fifty-Four Thousand Five Hundred
Fifty-Five Dollars ($154,555) at the Effective Date;
(g)
Hirshorn's employment
agreement with the Company shall terminate as
of the Effective Date and he shall not be paid any severance
compensation or other benefits under that Agreement, the
Company's
severance policies or any other arrangement relating to the
termination of his employment with Sealy, except as
specifically
provided herein; and
<PAGE>
(h)
Company shall
indemnify Hirshorn for any and all acts taken on
behalf of Company while Hirshorn was acting in his capacity as
an
officer or director of Company.
3.
OBLIGATIONS OF HIRSHORN. Hirshorn agrees, that in consideration of
the
payments and benefits described in this Agreement:
(a)
Hirshorn acknowledges
that his Management Shareholders Agreement
("Management Shareholders Agreement") with Sealy Corporation,
("Sealy") remains in effect according to it's terms, including
the
section titled "Confidential Information: Covenant Not to
Compete".
(b)
Hirshorn acknowledges
that by reason of Hirshorn's employment by the
Company, Hirshorn has had access to certain Sealy "Trade
Secrets"
(as defined in the North Carolina Trade Secrets Protection Act,
N.C.G.S. ss.66-152) including confidential product information
(collectively "Confidential Information") and Hirshorn shall
not
directly or indirectly use, reveal, disclose or remove from the
Company's premises Confidential Information or material
containing
Confidential Information, without the prior written consent of
the
Company;
(c)
Hirshorn agrees that
he will turn over and return to the Company's
Senior Vice President of Human Resources no later than the
Effective
Date all property whatsoever of the Company now in his
possession
(including laptops, cell phones, PDA's, computers, keys, credit
cards and any other property of the Company); and
(d)
Hirshorn by executing
this Agreement shall have resigned all of his
positions as an officer or director of the Company as well as
its
subsidiaries and Affiliates, effective as of the date that this
Agreement is executed as first above written.
4.
STOCK OPTION UNDERSTANDINGS. The Company and
