MANAGEMENT SUBSCRIPTION AND STOCK PURCHASE AGREEMENT
 
This Management Subscription and Stock Purchase Agreement (the “Agreement”) is
entered into as of the 1st day of December, 2006, by and between Simmons
Company, a Delaware corporation (the “Company”), and Gary S. Matthews
(“Matthews”).
 
WHEREAS, the Company believes it to be in the best interests of the Company and
its shareholders to take action to promote work-force stability, to reward
performance and otherwise align employee interests with those of the Company;
and
 
WHEREAS, the Matthews wish to purchase from the Company, and the Company wishes
to issue and sell to Matthews shares of the Company’s class A common stock, par
value $0.01 per share (“Class A Common Stock”).
 
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties to
this Agreement, intending to be legally bound, mutually agree as follows:
 
ARTICLE I
 
Purchase and Sale of Shares
 
1.1 Sale and Issuance of Shares. Subject to the terms and conditions of this
Agreement, Matthews does hereby subscribe for and agree to purchase at the
Closing (as defined below), and the Company does hereby agree to sell to
Matthews at the Closing, 4,195.33 shares of Class A Common Stock (collectively,
the “Shares”) for the total purchase price of $250,000 (the “Purchase Price”).
 
1.2 Closing. The issuance, sale and purchase of the shares of Class A Common
Stock hereunder shall occur at 10:00 a.m. EDT on the date hereof (the
“Closing”). Payment of the Purchase Price shall be made to the Company or its
designees at the Closing by delivery of a wire transfer of same day funds
denominated in U.S. dollars, unless otherwise mutually agreed in writing with
the Company.
 
1.3 Assurances. Each of the parties hereto agrees to use all commercially
reasonable efforts to bring about the fulfillment of the conditions precedent
contained in this Agreement.
 
ARTICLE II
 
Representations and Warranties of the Company
 
The Company represents and warrants to Matthews that:
 
2.1 Organization and Standing. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to carry on its business as
now conducted and as proposed to be conducted.
 
2.2 Authorization. All corporate action on the part of the Company necessary for
the authorization, execution, delivery and performance of this Agreement by the
Company, and for the authorization, issuance and delivery of the Shares being
sold under this Agreement, has been taken. This Agreement, when executed and
delivered by all parties hereto, shall constitute the valid and legally binding
obligation of the Company, except to the extent the enforceability thereof may
be limited by bankruptcy laws, insolvency laws, reorganization laws, moratorium
laws or other laws affecting creditors’ rights generally or by general equitable
principles.
 
2.3 Validity of Shares. The Shares, when issued, sold and delivered in
accordance with the terms of this Agreement, shall be duly and validly issued,
and fully paid and nonassessable.
 
2.4 Securities Act. The sale of Shares in accordance with the terms of this
Agreement (assuming the accuracy of the representations and warranties of
Matthews contained in Article III hereof) is exempt from the registration
requirements of the Securities Act of 1933, as amended (the “1933 Act”).
 
ARTICLE III
 
Representations, Warranties and Agreements of Matthews
 
3.1 Authorization. Matthews represents and warrants that this Agreement, when
executed and delivered by him, will constitute his valid and legally binding
obligation, except to the extent the enforceability thereof may be limited by
bankruptcy laws, insolvency laws, reorganization laws, moratorium laws or other
laws affecting creditors’ rights generally or by general equitable principles.
 
3.2 Investment Representations.
 
(a) This Agreement is made with Matthews in reliance upon his representation to
the Company, which by his acceptance hereof, Matthews hereby confirms, that
(i) the Shares to be received by him will be acquired by him for investment for
his own account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof in violation of applicable federal and state
securities laws, (ii) he has no current intention of selling, granting
participation in or otherwise distributing the same in violation of applicable
federal and state securities laws, and (iii) his address is as set forth below.
By executing this Agreement, Matthews further represents that he does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person, or to any third person, with
respect to any of the Shares in violation of applicable federal and state
securities laws.
 
(b) Matthews understands that the Shares have not been registered under the 1933
Act on the basis that the sale provided for in this Agreement and the issuance
of securities hereunder is exempt from registration under the 1933 Act pursuant
to Section 4(2) thereof and regulations issued thereunder, and that the
Company’s reliance on such exemption is predicated on representations of
Matthews set forth herein.
 
(c) Matthews represents that he is an “Accredited Investor” (as such term is
defined under Regulation D of the 1933 Act) and has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of his investment. Matthews further represents that he or she
has had access, during the course of the transactions contemplated hereby and
prior to his purchase of Shares, to the same kind of information that is
specified in Part I of a registration statement under the 1933 Act and that he
has had, during the course of the transactions contemplated hereby and prior to
his purchase of the Shares, the opportunity to ask questions of, and receive
answers from, the Company concerning the terms and conditions of the offering
and to obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to him or to which
he had access. Matthews understands that no federal or state agency has passed
upon this investment or upon the Company, nor has any such agency made any
finding or determination as to the fairness of this investment.
 
(d) Matthews understands that the Shares may not be sold, transferred or
otherwise disposed of without registration under the 1933 Act or an exemption
therefrom, and that in the absence of an effective registration statement
covering the Shares or an available exemption from registration under the 1933
Act, the Shares must be held indefinitely. Matthews must be prepared to bear the
economic risk of this investment for an indefinite period of time. In
particular, Matthews acknowledges that he is aware that the Shares may not be
sold pursuant to Rule 144 promulgated under the 1933 Act unless all of the
conditions of that Rule are met. Among the current conditions for use of Rule
144 by certain holders is the availability to the public of current information
about the Company. Such information is not now available, and the Company has no
current plans to make such information available. Matthews represents that, in
the absence of an effective registration statement covering the Shares, he will
sell, transfer or otherwise dispose of the Shares only in a manner consistent
with his representations set forth herein and then only in accordance with the
Securityholders’ Agreement referred to in Article VI.
 
(e) Independent of the additional restrictions on the transfer of shares of
Class A Common Stock contained in the Securityholders’ Agreement referred to in
Article VI, Matthews agrees that he will not make a transfer, disposition or
pledge of any of the Shares other than pursuant to an effective registration
statement under the 1933 Act, unless and until (i) he shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the disposition, and (ii) if
requested by the Company, at the expense of Matthews or his transferee, he or
she shall have furnished to the Company an opinion of counsel, reasonably
satisfactory to the Company and its counsel, to the effect that such transfer
may be made without registration of the Shares under the 1933 Act.
 
(f) Matthews acknowledges that this investment is not recommended for investors
who have any need for a current return on this investment or who cannot bear the
risk of losing their entire investment. Matthews acknowledges that: (i) he has
adequate means of providing for his current needs and possible personal
contingencies and has no need for liquidity in this investment; (ii) his
commitment to investments which are not readily marketable is not
disproportionate to his net worth; and (iii) his investment in the Shares will
not cause his overall financial commitments to become excessive.
 
3.3 Legends; Stop Transfer.
 
(a) Matthews acknowledges that all certificates evidencing the Shares shall bear
the following legend:
 
“TRANSFER RESTRICTED
 
The securities represented by this Certificate have not been registered under
the Securities Act of 1933, as amended, and may not be sold, offered for sale,
pledged or hypothecated in the absence of an effective registration statement as
to the securities under said Act or an opinion of counsel satisfactory to the
Company and its counsel that such registration is not required.”
 
(b) The certificates evidencing the Shares shall also bear any legend required
by any applicable state securities law and the Securityholders’ Agreement.

(c) The Company shall make a notation regarding the restrictions on transfer of
the Shares in its stock books, and the Shares shall be transferred on the books
of the Company only if transferred or sold pursuant to an effective registration
statement under the 1933 Act covering such Shares or pursuant to and in
compliance with the provisions of Section 3.2(e) hereof. All shares of Class A
Common Stock hereafter issued to Matthews shall bear the same endorsement, and
shall be subject to all the terms and conditions of this Agreement. A copy of
this Agreement, together with any amendments thereto, shall remain on file with
the Secretary of the Company and shall be available for inspection to any
properly interested person without charge within five (5) days after the receipt
of a written request therefor by the Company.
 
ARTICLE IV
 
Conditions to Obligations of Matthews at Closing
 
The obligations of Matthews under Article I of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions:
 
4.1 Representations and Warranties. The representations and warranties of the
Company contained in Article II hereof shall be true on and as of the Closing
with the same force and effect as if they had been made at the Closing.
 
4.2 Performance. The Company shall have performed and complied with all
agreements and conditions contained in this Agreement required to be performed
or complied with by it on or before the Closing.
 
4.3 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the Closing.
 
ARTICLE V
 
Conditions to the Obligations of the Company at Closing
 
The obligations of the Company under Article I of this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions:
 
5.1 Representations. The representations, warranties and agreements of Matthews
contained in Article III hereof shall be true on and as of the Closing Date with
the same force and effect as if they had been made at the Closing.
 
5.2 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Shares
pursuant to this Agreement shall have been duly obtained and shall be effective
on and as of the Closing.
 
5.3 Performance. Matthews shall have performed in all material respects all of
his obligations and materially complied with each and all of his covenants
required to be performed or complied with on or prior to the Closing, including
without limitation the execution and delivery of the agreements and undertakings
provided for in this Agreement.
 
ARTICLE VI
 
Mutual Conditions Precedent
 
The obligations of the Company and Matthews under Article I of this Agreement
are subject to the fulfillment on or before the Closing of the following
condition:
 
6.1 Securityholders’ Agreement and Registration Rights Agreement. The Company
and Matthews shall have executed and delivered a counterpart signature page to
that certain Securityholders’ Agreement and that certain Registration Rights
Agreement by and among the Company and the other parties thereto, so that
Matthews shall be entitled to the rights and subject to the obligations of a
“Senior Manager” thereunder as of the date hereof.
 
ARTICLE VII
 
Miscellaneous
 
7.1 No Waiver; Modifications in Writing. This Agreement sets forth the entire
understanding of the parties, and supersedes all prior agreements, arrangements
and communications, whether oral or written, with respect to the subject matter
hereof. No waiver of or consent to any departure from any provision of this
Agreement shall be effective unless signed in writing by the party entitled to
the benefit thereof, provided that notice of any such waiver shall be given to
each party hereto as set forth below. Except as otherwise provided herein, no
amendment, modification or termination of any provision of this Agreement shall
be effective against the Company or Matthews unless signed in writing by or on
behalf of the Company and Matthews. Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the Company from the terms of any
provision of this Agreement, shall be effective only in the specific instance
and for the specific purpose for which made or given. Except where notice is
specifically required by this Agreement, no notice to or demand on the Company
in any case shall entitle the Company to any other or further notice or demand
in similar or other circumstances.
 
7.2 Notices. All notices and other communications necessary or contemplated
under this Agreement shall be in writing and shall be delivered in the manner
specified herein or, in the absence of such specification, shall be deemed to
have been duly given when delivered by hand, one day after sending by overnight
delivery service, or three days after sending by certified mail, postage
prepaid, return receipt requested to the respective addresses of the parties set
forth below:
 
If to Matthews: Gary S. Matthews
 
130 Lower Cross Road
 
Greenwich, CT 06831
 
If to the Company: Simmons Company
One Concourse Parkway, Suite 800
Atlanta, GA 30328
Attention: Chief Financial Officer and General Counsel

With a copy to: Thomas H. Lee Partners, L.P.
100 Federal Street, 35th Floor
Boston, MA 02110
Attention: Scott Schoen
                Todd Abbrecht
George Taylor
 

By notice complying with the foregoing provisions of this Section 7.2, each
party shall have the right to change the mailing address for future notices and
communications to such party.
 
7.3 Costs, Expenses and Taxes. The Company and Matthews shall pay their own
costs and expenses incurred in connection with this Agreement, the
Securityholders’ Agreement and the Registration Rights Agreement, any amendment
or supplement to or modification of any of the foregoing, and any and all other
documents furnished pursuant hereto or thereto or in connection herewith or
therewith. The Company shall pay any and all stamp, transfer and other similar
taxes payable or determined to be payable in connection with the execution and
delivery of this Agreement or the original issuance of the Shares but excluding
all federal, state and local income or similar taxes and shall save and hold
Matthews harmless from and against any and all liabilities with respect to or
resulting from any delay in paying, or omission to pay, such taxes.
 
7.4 Execution of Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement.
 
7.5 Binding Effect; Assignment. The rights and obligations of Matthews under
this Agreement may not be assigned to any other person. Except as expressly
provided in this Agreement, this Agreement shall not be construed so as to
confer any right or benefit upon any person other than the parties to this
Agreement, and their respective successors and assigns. This Agreement shall be
binding upon the Company and Matthews, and their respective successors and
assigns.
 
7.6 Governing Law. This Agreement shall be governed by the laws of the State of
Delaware as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
 
7.7 Severability of Provisions. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
 
7.8 Exhibits and Headings. All Exhibits to this Agreement shall be deemed to be
a part of this Agreement. The Article and Section headings used or contained in
this Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
 
7.9 Injunctive Relief. Each of the parties to this Agreement hereby acknowledges
that in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party may be without an adequate remedy at law. Each of
the parties therefore agrees that, in the event of a breach of any provision of
this Agreement, the aggrieved party may elect to institute and prosecute
proceedings to enforce specific performance or to enjoin the continuing breach
of such provision, as well as to obtain damages for breach of this Agreement. By
seeking or obtaining any such relief, the aggrieved party will not be precluded
from seeking or obtaining any other relief to which it may be entitled.
 
7.10 Survival of Agreements, Representations and Warranties. All agreements,
representations and warranties contained herein or made in writing by or on
behalf of the Company or Matthews, as the case may be, in connection with the
transactions contemplated by this Agreement shall survive the execution and
delivery of this Agreement and the sale and purchase of the Shares and payment
therefor.
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an instrument under seal, as of the date first above written.

SIMMONS COMPANY
                                     
By: /s/William S. Creekmuir
  _____________________________
William S. Creekmuir
Executive Vice President and Chief Financial Officer
 

                                    /s/ Gary S. Matthews
_______________________________
Gary S. Matthews