<PAGE>
                                                                   EXHIBIT 10.14

                                AGREEMENT BETWEEN
                                SIMMONS COMPANY,
                             ATLANTA, GEORGIA PLANT

                                       AND

                        UNITED STEEL WORKERS OF AMERICA,
                                 AFL, CIO, CLC




                     October 16, 2001 until October 15, 2005


<PAGE>



                                      INDEX
                                      -----
<TABLE>
<CAPTION>
ARTICLE           TITLE                                                                                    PAGE
-------           -----                                                                                   ------
<S>               <C>                                                                                      <C>
    I             RECOGNITION AND UNION SECURITY..........................................................     1
                  Employees Covered.......................................................................     1
                  Union Security..........................................................................     1
                  Check-Off...............................................................................     2
                  Committee  Meetings ....................................................................     3

    II            DISCIPLINARY PROCEDURE..................................................................     3
                  Just Cause..............................................................................     3
                  Interview and Hearing...................................................................     3
                  Good Faith Duties.......................................................................     4
                  Correction of Offense...................................................................     4
                  Disciplinary Policy.....................................................................     4

    III           GRIEVANCE PROCEDURE AND ARBITRATION.....................................................     4
                  Grievance Procedure.....................................................................     4
                  Grievances - Step 1.....................................................................     5
                  Grievances - Step 2.....................................................................     5
                  Grievances - Step 3.....................................................................     5
                  Resolution by Default...................................................................     5
                  Arbitration of Disputes.................................................................     5
                  Selection of Arbitrators................................................................     6
                  Authority of Arbitrator.................................................................     6
                  Expedited Arbitration...................................................................     6

    IV            HOURS OF WORK AND PREMIUM PAY...........................................................     7
                  Work Week...............................................................................     7
                  Overtime Hours..........................................................................     7
                  Pay Rate for Saturday and Sunday Work...................................................     8
                  Availability for Scheduled Work.........................................................     8
                  No Pyramiding...........................................................................     8
                  Shift Schedule..........................................................................     9
                  Rest Periods............................................................................     9
                  Shift Premiums..........................................................................     9
                  Reporting Pay...........................................................................     9
                  Notice of Shift Changes.................................................................    10
                  Shift Seniority.........................................................................    10
                  Report Absences.........................................................................    10
</TABLE>


<PAGE>

<TABLE>
<CAPTION>
ARTICLE           TITLE                                                                                    PAGE
-------           -----                                                                                   ------
<S>               <C>                                                                                      <C>
    V             NO STRIKE - NO LOCKOUT..................................................................    10

    VI            MANAGEMENT RIGHTS CLAUSE................................................................    10

    VII           SENIORITY...............................................................................    11
                  Accumulation of Seniority...............................................................    11
                  Termination of Seniority................................................................    11
                  Layoff..................................................................................    12
                  Right of Recall.........................................................................    12
                  Notice of Recall........................................................................    13
                  Change of Address.......................................................................    13
                  Furlough................................................................................    13
                  Probationary Period.....................................................................    14
                  Bidding.................................................................................    14
                  Failure to Succeed on Bid Job...........................................................    15
                  Disqualification Following Bump or Transfer.............................................    15
                  Combined Classifications................................................................    15
                  Training................................................................................    15
                  Refreshing of Skills....................................................................    16
                  Skill Group Classifications.............................................................    16
                  Approved Leave..........................................................................    17
                  Leave of Absence for Union Activity.....................................................    18
                  Procedure for Rehiring from Leave of Absence............................................    18
                  Bumping-Production and Mechanical Employees.............................................    18
                  Hiring Rate and Progression.............................................................    19
                  War Emergency...........................................................................    19
                  Seniority Bonus.........................................................................    19

    VIII          WAGES...................................................................................    19
                  Hourly Rates............................................................................    19
                  General Wage Increases..................................................................    19
                  Reactivation of Old Classifications.....................................................    20
                  Establishment of New Classifications....................................................    20
                  Borrowed Man............................................................................    20
                  Average Rate Computation................................................................    21
                  Injured During Work.....................................................................    21
                  Pay Shortages...........................................................................    22
</TABLE>



                                     -iii-
<PAGE>


<TABLE>
<CAPTION>
ARTICLE           TITLE                                                                                    PAGE
-------           -----                                                                                   ------
<S>               <C>                                                                                      <C>
    IX            STANDARD ALLOWED HOURS..................................................................    22
                  Incentive Compensation Plan.............................................................    22
                  New or Varied Jobs and Operations.......................................................    22
                  Standard Allowed Hour...................................................................    23
                  Written Confirmation and Effective Date of SAH..........................................    24
                  Procedural Interpretation of Section....................................................    24
                  Grievances Regarding Incentive Standards................................................    25
                  Availability of Time Study Data.........................................................    26
                  Union Time Study Engineer...............................................................    26
                  Standard Data...........................................................................    26

    X             PAID HOLIDAYS...........................................................................    26
                  Holidays Observed.......................................................................    26
                  Eligibility.............................................................................    27
                  Sick Leave..............................................................................    27
                  Holiday Pay.............................................................................    27
                  Holidays During Approved Vacation.......................................................    27
                  Multiple Holidays on Same Day...........................................................    27
                  Holidays on Sunday......................................................................    27
                  Holidays on Saturday....................................................................    27
                  Pay Rate................................................................................    27
                  Overtime and Premium Pay................................................................    28
                  Plant Shutdown..........................................................................    28

    XI            PAID VACATIONS..........................................................................    28
                  Vacation................................................................................    28
                  Pay Rate................................................................................    29
                  Plant Shutdown and Staggered Vacation...................................................    29
                  Eligibility.............................................................................    29
                  Scheduling of Staggered Vacations.......................................................    29
                  No Accumulation.........................................................................    30
                  Shift Premium...........................................................................    30

    XII           INVENTORY WORK..........................................................................    30
                  Preference .............................................................................    30
                  Pay Rate................................................................................    30
                  Pieceworkers............................................................................    30
</TABLE>


                                      -iv-
<PAGE>


<TABLE>
<CAPTION>
ARTICLE           TITLE                                                                                    PAGE
-------           -----                                                                                   ------
<S>               <C>                                                                                      <C>
    XIII          LEAVE OF ABSENCE........................................................................    30
                  Leave...................................................................................    31
                  Return..................................................................................    31

    XIV           USWA PENSION TRUST......................................................................    32

    XV            USWA HEALTH AND WELFARE FUND............................................................    33
                  Benefit Plan(s).........................................................................    33
                  Contribution Rates......................................................................    33
                  Eligibility.............................................................................    34
                  Employee Contributions..................................................................    34
                  Sickness and Health and Life Insurance..................................................    35
                  Payment of Contributions................................................................    35
                  Coverage................................................................................    35
                  Election of Category of Coverage and Right to Change....................................    35
                  Requirements............................................................................    35
                  Hold Harmless...........................................................................    36
                  Reinstatement of Coverage...............................................................    36
                  Part Time Employees.....................................................................    36
                  Audit Rights............................................................................    36
                  Availability of Benefits................................................................    36

    XVI           JURY SERVICE............................................................................    37

    XVII          BEREAVEMENT PAY.........................................................................    37
                  Definition..............................................................................    37
                  Payment.................................................................................    37

    XVIII         BULLETIN BOARDS.........................................................................    37
                  Bulletin Boards.........................................................................    37
                  Posting of Notices......................................................................    38

    XIX           MILITARY CLAUSE.........................................................................    38

    XX            EMPLOYEE BIRTHDAY PAY...................................................................    38

    XXI           LEGAL COUNSEL...........................................................................    38

    XXII          GROUP OPERATIONS........................................................................    39
</TABLE>


                                      -v-

<PAGE>


<TABLE>
<CAPTION>
ARTICLE           TITLE                                                                                    PAGE
-------           -----                                                                                   ------
<S>               <C>                                                                                      <C>
    XXIII         MECHANIC AND MACHINIST APPRENTICE
                     TRAINING SCHEDULE AND PAY
                      RATE PROGRESSION SCALE..............................................................    39

    XXIV          WORK WAIT...............................................................................    40
                  Work Wait...............................................................................    40
                  Electric Power Failure..................................................................    40

    XXV           TEMPORARY EMPLOYEES.....................................................................    41
                  Temporary Jobs..........................................................................    41
                  Temporaries.............................................................................    41

    XXVI          EQUAL EMPLOYMENT OPPORTUNITY............................................................    41

    XXVII         MISCELLANEOUS...........................................................................    42

    XXVIII        SAVING CLAUSE...........................................................................    42
                  Separability............................................................................    42
                  Federal and State Laws..................................................................    42

    XXIX          SEVERANCE AND PLANT CLOSINGS............................................................    42

    XXX           DURATION AND TERMINATION OF SUPPLEMENT..................................................    43
                  Effective Dates.........................................................................    43
                  Entire Agreement........................................................................    43
                  Modification or Termination.............................................................    43

   XXXI           CONTRACT RE-OPENER......................................................................    43

                  SIGNATURES..............................................................................    45

                  APPENDIX I & II.........................................................................    46
                  APPENDIX III............................................................................    48

                  APPENDIX IV.............................................................................    49
</TABLE>

                                      -vi-

<PAGE>



                                    AGREEMENT

                  This Agreement, made this 16th day of October, 2001, by and
between Simmons Company, Atlanta, Georgia (hereinafter referred to as the
Company) and the United Steelworkers of America, AFL, CIO, CLC (hereinafter
referred to as the Union) on behalf of its Local Union No. 2401, for and on
behalf of itself and the employees of said Company at its plant located at
Atlanta, Georgia.

                                   WITNESSETH

                  NOW, THEREFORE, in consideration of the promises and of mutual
covenants and AGREEMENTS of the parties hereinafter set forth, the parties do
hereby agree as follows:

                                    ARTICLE I

                         RECOGNITION AND UNION SECURITY

         1.01 The Union and the Company shall cooperate to promote the welfare
of the Company and efficiency of its factory operations. It is also the
intention of the parties to provide an orderly procedure between the Company and
the Union and, therefore, all Agreements or understandings concerning hours,
wages and working conditions between the Company the employees covered by this
contract are to be made by the Company with the Union as the representative of
said employees. No individual employee or group of employees, nor member of the
Company shall have the authority to abridge or modify this Agreement in any
manner.

         1.02 EMPLOYEES COVERED. The persons covered by this contract include
all production employees of the Company described in Appendices I and II,
employed in its Atlanta, Georgia, plant, excluding office workers, supervisors,
foremen, inspectors, watchmen, plant guards, departmental coordinators, carload
checkers, or persons in any way identified with Management.

         1.03 UNION SECURITY.

                  (a)      The Company agrees that as a condition of employment
                           all employees in the bargaining unit shall become
                           members of the Union after the thirtieth day of their
                           employment or thirty (30) days after the execution
                           date of this AGREEMENT, whichever is later. All
                           employees who become members of


<PAGE>

                           the Union shall remain members of the Union in good
                           standing by proper tender of dues and initiation fees
                           during the term of this AGREEMENT.

                  (b)      The Union agrees to accept into membership and make
                           membership available to all employees upon the same
                           terms and conditions generally applicable to other
                           members without discrimination.

                  (c)      Within five (5) days after receipt of written notice
                           from the Union that any employee has failed, pursuant
                           to the terms of this Article, to tender payment of
                           the regular dues and initiation fee required as a
                           condition of acquiring or retaining membership in the
                           Union, the Company shall discontinue its employment
                           of such employee. The Company shall not be required
                           by the Union to discontinue the employment of any
                           employee for any other reason.

                  (d)      Upon demand by the Union that an employee be
                           discharged because he is delinquent in the payment of
                           his regular dues or initiation fee, the Company shall
                           promptly notify the employee that his discharge has
                           been demanded and the employee shall have a
                           reasonable time as determined by the Union in which
                           to rectify the matter before the discharge is placed
                           in effect. If the discharge of an employee is
                           effected by the request of the Union pursuant to
                           paragraphs a, b, c, or d of this section, the Union
                           agrees to indemnify the Company from any final
                           determination of liability for this action if, prior
                           to the discharge, the Company sends an overnight
                           letter to the Director of Upholstery Industries
                           Division notifying him of the requested discharge.
                           Failure of the International President to respond by
                           Overnight mail within five (5) days will be deemed
                           concurrence with the local Union request.

                  (e)      The Company shall have the exclusive right to hire
                           and shall be the sole judge of the requirements and
                           qualifications of each applicant until the completion
                           of the probationary period set forth in section 7.08
                           of this Agreement.

                  (f)      The provisions of this section shall be applicable
                           only to the extent permitted by applicable state and
                           federal law.

                  (g)      No Union member shall be compelled to train employees

         1.04 CHECK-OFF. Upon written individual voluntary authorization by each
employee and subject to the requirements of any applicable local, state or
federal law, membership dues and initiation fees of the Union as authorized and
approved by the United Steelworkers Union Executive Board due and unpaid shall
be deducted from the wages of all employees covered by this Agreement and
remitted by the Company each and every month to the International
Secretary-Treasurer. This


                                      -2-
<PAGE>

article or any section thereof shall not be operative where prohibited by state
law. The Union agrees that it will indemnify and save the Company harmless from
any and all liability, claims, responsibility, damages or suit which may arise
out of any action taken by the Company in accordance with the terms of this
Article or in reliance upon the authorization mentioned herein.

         1.05 COMMITTEE MEETINGS. Department committee meetings or conferences
with the Company, if held during regular working hours, shall result in no loss
of pay to the employees.


                                   ARTICLE II

                             DISCIPLINARY PROCEDURE

         2.01 JUST CAUSE. The Company shall not discharge, suspend, or otherwise
discipline any employee except for just cause, or as provided in Section
1.03(d).

         2.02 INTERVIEW AND HEARING. In the event that disciplinary action
involving loss of wages (suspension and/or discharge) is taken against any
employee, the employee involved must be given an interview concerning such
disciplinary action, in which he must be represented by a Shop Steward or an
officer of the Union.

                  The Union representative will be informed prior to the
disciplinary action being taken and must be given an opportunity (not to exceed
fifteen (15) minutes) to discuss the case with the affected employee and to
participate in the interview with the Company concerning the matter. The
interview may be of very short duration and shall not be construed as part of
the grievance procedure, as described in Article III of this Agreement, inasmuch
as the primary function of the interview is to make certain that a Union
representative is aware of the discipline and that the employee knows precisely
what he or she is disciplined for.

                  In cases of physical altercation or where the employee is not
on Company premises at the time of the disciplinary action, the interview will
be dispensed with.

                  A discharged employee shall be entitled to a hearing before
the Company Plant Labor Relations Committee at 10:00 a.m. on the day following
his discharge, provided the employee is notified of the hearing and is
physically able to attend, at which time the merits of the case will be
discussed between the Union and the Company.

                  In the event an employee is unable to attend or the Union is
unable to find such employee, the hearing may be held in abeyance for a period
of one (1) week. If the hearing is delayed because of unavailability of the
employee, the Company is not liable for any wage during such period.



                                      -3-
<PAGE>


         2.03 GOOD FAITH DUTIES. No employee acting in the capacity of a Union
officer or Union representative shall be disciplined for carrying out in good
faith his duties under the provisions of this Agreement or as permitted by
applicable law.

         2.04 CORRECTION OF OFFENSE. Once an individual is reprimanded and the
offense is not committed again for a period of twelve (12) months, the employee
shall be considered to have corrected himself. This shall not include such
serious offenses as no-strike clause violations, insubordination, stealing,
cheating, physical assault, damaging Company property, and poor quality.

         2.05 DISCIPLINARY POLICY. SIMMONS corporate view is that the
disciplinary procedure is not designed to punish employees, particularly for
less serious offenses, but, rather, to educate, correct and train people as
effective team members who can be counted on to give reliable productive
performance.

                  Finally, time itself is the best measure of correction in any
individual, regardless of job or authority. In the situation of the lesser
offenses as contrasted with the more serious offenses described in Section 2.04
each manager is cautioned with the need to believe that the employee has
corrected his problem in the event there is no repetition of such within one
year of the last infraction. In that event, the process is to begin anew.

                                   ARTICLE III

                       GRIEVANCE PROCEDURE AND ARBITRATION

         3.01     GRIEVANCE PROCEDURE

                  A.       It is the intent of the parties to this Agreement
                           that the grievance procedure hereby established shall
                           serve as a means for the prompt disposition and
                           amicable settlement of such grievances as may arise
                           between the Company and its employees or the Company
                           and the Union.

                           A grievance is defined as any dispute (excluding
                           discharges for those employees in probationary
                           period) between the Company and employee(s) or
                           between the Company and the Union over the
                           application, interpretation, or alleged violation of
                           an express provision of this Agreement, where
                           applicable.

                  B.       Should any grievance arise between the Company and
                           any of the Company's employees involving a work
                           assignment, the employee involved shall continue to
                           perform the assignment in question while the
                           grievance is being processed unless it will endanger
                           his life, limb, or safety, or that of other employees
                           or where the contract expressly disavows cessation of
                           such assignment.

                                      -4-
<PAGE>

                  C.       The aggrieved employee may discuss the matter with
                           the employee's immediate supervisor and Union
                           representative if requested. Any resolution by the
                           supervisor or steward shall not act as a precedent in
                           future cases.

         3.02 GRIEVANCES - STEP 1. If the grievance is not settled in verbal
discussion described in Section 3.01(C) above, the grievance shall be reduced to
writing on forms to be made available for such purpose, with each form signed
and dated by the aggrieved employee and/or his designated Union representative.
The designated Union representative shall present the grievance form to the
supervisor within five (5) working days from the date of the occurrence or
knowledge of occurrence. The grievance shall specify the incident involved, the
facts or alleged facts relied upon to support the contention of the employee,
the section of this Agreement relied upon, where applicable, the interpretation
requested by the grievant; and shall show on its face the date of the incident.
The supervisor has two (2) work days to answer.

         3.03 GRIEVANCES - STEP 2. A grievance not settled at Step 1 shall be
presented to the Operations Manager and/or the Human Resource Manager within
three (3) work days from the Step 1 answer. The Operations Manager and/or Human
Resource Manager within two (2) days shall meet and discuss the matter with the
employee and a Union representative. The Operations Manager and/or Human
Resource Manager shall then have three (3) work days to answer.

         3.04 GRIEVANCES - STEP 3. If a settlement is not obtained in Step 2,
the grievance shall be referred to the Company's Vice President - Human
Resources, or his designated representative, as Step 3 by the Local Union
representative within five (5) working days from the date of the reply under
Step 2. The International Representative of the Union shall meet with the
Company's Vice President - Human Resources, or the representative he designates,
within a reasonable time (not to exceed thirty (30) calendar days). A written
answer by the Company to the grievance considered at such meeting shall be given
to the International Representative of the Union within five (5) working days
after such meeting.

                  If an employee is needed as witness in the process of Step 1
or 2 by the Union, it is understood that any pay lost by the witness or others
resulting from his/her absence from work will be reimbursed by the Union.

         3.05 RESOLUTION BY DEFAULT. Failure on the part of either party to
respond to any step within the grievance procedure within the time limits
established by this Article will resolve the grievance against the party failing
to respond. Resolution by default, however, shall not establish a precedent for
similar grievances. Time limits may be extended by mutual written agreement.
Whenever time limits are set out in this Article, they shall be work days
exclusive of Saturdays, Sundays, and holidays recognized by this Agreement.

         3.06 ARBITRATION OF DISPUTES. If the grievance is subject to
arbitration as provided herein and all conditions in Section 3.01 above have
been satisfied, including the applicable time limits, then the Union on behalf
of the aggrieved employee or aggrieved employees may, within ten (10)


                                      -5-
<PAGE>

calendar days of the Company's answer in Step 3, file a written request to the
Operations Manager or his designee that the grievance be submitted to
arbitration for determination pursuant to this Article.

         3.07 SELECTION OF ARBITRATORS. [See Pay Plus Bonus Addendum] Within ten
(10) calendar days after the Union files its written request for arbitration
pursuant to Section 3.06 above, the Company or the Union may write either the
Federal Mediation and Conciliation Service or the American Arbitration
Association to request that it submit a panel of seven (7) arbitrators. The
Union shall notify the Company of its first strike, and each party shall then
alternately strike one name until only one name remains who shall be designated
as the impartial arbitrator. Either party reserves the right to reject the
entire panel prior to any striking of arbitrators and to request one additional
panel of arbitrators per grievance.

                  In the event the Union and the Company are unable to agree to
a base rate on a new classification as provided in Section 8.04, the dispute may
be appealed to arbitration for determination by a qualified time study
arbitrator.

                  Appeals under the Standard Allowed Hour Formula as described
in Article IX, if warranted, shall be carried to arbitration under the above
described procedure; however, in this instance, the Impartial Chairman of the
Arbitration Board must be a qualified time study engineer.

         3.08 AUTHORITY OF ARBITRATOR. In interpreting and applying the
provisions of this Agreement and in making findings of fact, the arbitrator's
interpretation and application must be in accord with the spirit and letter of
this Agreement and any amendments thereto. The function of the arbitrator shall
be judicial rather than legislative in nature. No arbitrator shall have the
jurisdiction or authority to add to, take from, nullify, or modify any of the
terms of this Agreement or any amendments or Letters of Understanding applicable
thereto. In no event shall any of the Company's rights ever be deemed or
construed to have been modified, diminished, or impaired by any past practice or
course of conduct except where contained in an express provision of this
Agreement.

                  The arbitrator shall be bound by the facts and evidence
submitted to him/her in the hearing and may not go beyond the terms of this
Agreement in rendering his/her decision. No such decision may include or deal
with any issue not directly involved in the grievance submitted to him/her or
with any matter which is not expressly made subject to arbitration by the terms
of this Agreement. No decision of the arbitrator shall require the payment of an
hourly rate different from the applicable one negotiated by the parties and
expressly set forth in this Agreement. The decision of the arbitrator shall be
in writing and such decision shall be final and binding upon the parties when
rendered upon a matter within the authority of the arbitrator and within the
scope of the matters subject to arbitration as provided in this Agreement and in
accordance with the procedures specified in this Agreement.

         3.09 EXPEDITED ARBITRATION. The Union or the Company may invoke the
expedited grievance procedure, as distinguished from the ordinary grievance
procedure, in the event an employee is discharged, suspended, disqualified from
a job, disciplined for failure to meet


                                      -6-
<PAGE>

production standards, loss or reduction of earnings or in the event there is a
seniority dispute. Such request shall be asserted in writing, by next day mail,
given to the other party. The party requesting the expedited grievance procedure
shall immediately contact the American Arbitration Association headquarters (New
York city) to request the first available arbitrator from a national pre-agreed
panel of fifteen (15) arbitrators (see Appendix III, page 46) who can hear the
case within seven (7) calendar days.

                  The arbitrator shall hold an arbitration hearing as
expeditiously as possible, but in no event later than seven (7) calendar days
after receipt of said notice. The decision of the arbitrator shall issue
forthwith and in no event later than three (3) days after the conclusion of the
hearing unless the grieving party agrees to waive this time limitation with
respect to all or part of the relief requested. The arbitrator's written opinion
will follow within thirty (30) days and such decision shall be final and binding
on both parties.

                  All costs for the hearing and service of the arbitrator
designated herein, or for any other person selected pursuant to the
aforementioned procedure, shall be borne by the parties jointly. Each party will
bear the expense of its representatives and for the presentation of its own
case.

                                   ARTICLE IV

                          HOURS OF WORK AND PREMIUM PAY

         4.01 WORK WEEK. For the purpose of computing overtime pay, eight (8)
hours shall constitute a day's work; forty (40) hours, from Monday through
Friday inclusive, shall constitute a week's work.

         4.02     OVERTIME HOURS.

                  A.       All authorized time worked before regular starting
                           time and/or after regular quitting time, including
                           authorized time worked during the regular lunch
                           period, shall be paid at time and one-half the
                           average straight time hourly earnings as computed in
                           Section 8.06 reflecting the earnings for the week in
                           which the overtime is worked.

                  B.       Anyone reporting to work after their regular staring
                           time will receive overtime pay only upon completion
                           of eight (8) hours work.



                                      -7-
<PAGE>

         4.03 PAY RATE FOR SATURDAY AND SUNDAY WORK. All work on Saturday as
such will be paid at time and one-half. Also, double time will be paid for all
work performed on Sunday, except in the case of any shift beginning in the
preceding day and continuing into Sunday. Double time shall be paid to employees
who are scheduled to work and perform work on a holiday.

         4.04 AVAILABILITY FOR SCHEDULED WORK. Employees must be available for
all work scheduled, regular or overtime. An employee who did not receive notice
of overtime on his or her previous shift worked shall not be compelled to work
overtime on that particular day (except for those employees on vacation or
approved leave of absence). Employees who have a valid reason may be excused by
management from working regular or overtime work at any particular time.

         4.05 NO PYRAMIDING. There shall be no pyramiding of any premium or
overtime pay under this Agreement for the same hours worked. Where one or more
premiums or overtime rate is payable, the single higher rate shall be paid.

                  A.       Overtime. Except for plant security, continuous shift
                           operations, emergency, or maintenance, the COMPANY
                           will not require production employees to work in
                           excess of 10 hours per day on Monday, Tuesday,
                           Wednesday, and Thursday, 8 hours on Friday, and/or in
                           excess of 8 hours on Saturday, provided, however,
                           that no employee will be compelled to work more than
                           two consecutive Saturdays, except for the five (5)
                           "peak" months. In those five (5) months, employees
                           shall be available for Saturday work when production
                           schedules so require. A tentative schedule for these
                           five (5) months will be given by December 15th. In
                           the event any of these five months need to be
                           changed, a sixty (60) day notice will be given.

                  B.       During the months described above the UNION committee
                           and the Operations Managers have the authority to
                           agree to further enhance the varying starting times
                           for selected operations in order to satisfy the
                           scheduling needs for quick turn deliveries as well as
                           to further ensure prompt delivery to customers. Three
                           (3) days notice is also required for such change.

                  C.       Production on Sundays and holidays and in excess of
                           the hours described in (a) above may be performed by
                           volunteers but will not be mandatory.

                  D.       If a holiday falls on Friday, then Saturday work
                           shall be performed by volunteers.

                  E.       Employees will be required to work two consecutive
                           Saturdays all year long. If an employee agrees to
                           work the third Saturday, said employee must then work
                           two more consecutive Saturdays, for a total of five
                           before having the option of being off on Saturday.



                                      -8-
<PAGE>


                  F.       Employees are required to work on a daily basis until
                           the schedule is complete, up to ten (10) hours per
                           day, provided they have been notified on their
                           previous shift. Notice may be posted by Company on a
                           daily basis.

                  G.       Overtime  on  Friday  up to ten (10)  hours  will be
                           scheduled  as  mandatory  overtime provided that
                           these employees are exempt from Saturday work.

         4.06 SHIFT SCHEDULE. The following is the usual shift schedule which
may be varied by the Company one hour either before or after the described
normal starting time for those operations needed to balance the flow of work
without penalty of overtime premium. The Company is required to give three (3)
calendar days notice of such change in writing to the Union as well as posting
such on the Bulletin Board and giving notice to the individuals involved.
Failure to give three (3) days notice for shift varying times will not release
the Company from payment of overtime premium.

                  A.       The normal first shift schedule will be from 7:00
                           a.m. until 3:30 p.m. with a thirty (30) minute unpaid
                           lunch period staggered between 11:30 a.m. and 12:30
                           p.m.

                  B.       The normal second shift will be from 3:30 p.m. until
                           12:00 midnight with a thirty (30) minute unpaid lunch
                           period from 7:30 p.m. to 8:00 p.m.

                  C.       When three shifts are to be worked, the normal third
                           shift will begin work at 12:00 midnight and continue
                           to work until 7:00 a.m. with a thirty (30) minute
                           unpaid lunch period from 3:00 a.m. to 3:30 a.m.

         4.07 REST PERIODS. There shall be two (2) ten (10) minute rest periods
daily.

                  First shift rest periods: (1) 9:30 a.m. to 9:40 a.m. (2) 2:00
                  p.m. to 2:10 p.m.

                  Second shift rest periods: (1) 5:30 p.m. to 5:40 p.m. (2) 9:20
                  p.m. to 9:30 p.m.

                  Third shift rest periods: (1) 1:30 a.m. to 1:40 a.m. (2) 5:20
                  a.m. to 5:30 a.m.

                  These rest periods and lunch periods will prevail unless
                  mutually agreed upon changes are made between the Union and
                  Management.

         4.08 SHIFT PREMIUMS. Employees assigned to work on the second or third
shift shall be paid a shift premium of twenty (20) cents per hour.

         4.09 REPORTING PAY. When an employee reports for work at the regular
starting time of his shift without previous notice not to report and his regular
work is not available for him, he will receive a minimum of four (4) hours work
or pay, provided, however, that at the Company's option, he/she may be assigned
to another job for any portion of said four (4) hours, in which event he will

                                      -9-
<PAGE>

be paid at average rate as computed in Section 8.06 for whatever time is spent
at that job. The Company shall have no liability regarding the above paragraph
in the event of a breakdown of power outside of plant or if inside of plant and
not maintained by the Company, a general plant fire, Act of God, Act of Public
Enemy, or because of conditions beyond the control of the Company.

         4.10 NOTICE OF SHIFT CHANGES. Employees shall receive seven (7) days
notice of any change in shift assignment, and when it is necessary to
temporarily assign an employee, or group of employees, from a permanent shift
assignment to take care of operational bottlenecks, the Union will mutually
agree with the Company to the adjustment of shift hours, and reasonable notice
("reasonable" means by end of the prior working day) will be given to the
employee(s) involved without penalty of overtime premium.

         4.11 SHIFT SENIORITY. Whenever more than one shift is necessary,
employees with seniority shall be allowed to choose the shift on which they will
work upon entering the job classification. However, the necessity for exceptions
shall be discussed between the Local Union Unit Chairperson or Unit Griever and
the department foreman.

         4.12 REPORTING ABSENCES. If an employee is unable to report to work,
the employee must report his/her absence to the personnel office within the
first hour and one-half of his/her shift starting time for day-shift employees;
and within the first hour of his/her shift starting time for night shift
employees.

                                    ARTICLE V

                             NO STRIKE - NO LOCKOUT

                  Neither the Union nor any of the employees in the bargaining
unit covered by this Agreement will collectively, concertedly, or individually
encourage, engage in, or participate in, directly or indirectly, any strike,
deliberate slowdown, stoppage, or other interference with production of work
during the term of this Agreement; and the Company during the term of this
Agreement will not lock out any of the employees covered by this Agreement.

                                   ARTICLE VI

                            MANAGEMENT RIGHTS CLAUSE

         The Union recognizes the right of the Company to conduct its business,
to operate its plants, and to direct the working forces in such manner as it
sees fit but not inconsistent with the terms of this Agreement and it is
understood that the Company retains all management rights not specifically
covered by this Agreement.



                                      -10-
<PAGE>


                                   ARTICLE VII

                                    SENIORITY

         7.01 ACCUMULATION OF SENIORITY. The Company recognizes the principle of
seniority among its employees and agrees that all layoffs occasioned by lack of
work and recalls form layoffs shall be by seniority as herein provided.
Seniority shall continue and accumulate while the employee is continuously
employed by the Company and during the following periods of absence from work:

                  (a)      Up to twelve (12) months in case of disability or
                           illness;

                  (b)      During the first twelve (12) months of layoff;

                  (c)      During military service;

                  (d)      When an employee is elected or appointed to a Union
                           office, such employee shall be given a leave of
                           absence in writing for the term of his office or any
                           renewal thereof. The Union shall give the Company two
                           (2) weeks prior notice in such situation;

                  (e)      The manner of return to employment shall be as
                           provided herein.

                  (f)      To be eligible for a leave of absence, an employee
                           must have completed the probationary period provided
                           in Section 7.08 and the leave request must be in
                           writing.

         7.02 TERMINATION OF SENIORITY. Seniority shall terminate for the
following reasons:

                  (a)      When an employee resigns;

                  (b)      When an employee is discharged for just cause;

                  (c)      When an employee is laid off longer than twelve (12)
                           months, except for right of recall as per section
                           7.04;

                  (d)      When an employee's absence due to disability or
                           illness exceeds five (5) years;

                  (e)      When an employee is recalled to work and does not
                           return to work as provided in section 7.05;

                  (f)      If an employee falsifies any information given in
                           connection with a leave of absence; and



                                      -11-
<PAGE>


                  (g)      When an employee obtains other employment while on an
                           approved leave of absence.

         7.03     LAYOFF.

                  A.       The COMPANY recognizes the principle of seniority
                           (last hired will be the first laid off) among its
                           employees and agrees that all layoffs occasioned by
                           lack of work and subsequent recalls from layoff shall
                           be by seniority as provided below. When there is not
                           sufficient work for all employees, probationary
                           employees with less than sixty (60) days seniority,
                           shall first be laid off.

                  B.       In the event of a layoff, the reduction will be by
                           classification and seniority, giving the affected
                           employee the right to bump one of the following at
                           the time of his/her layoff interview:

                                    *        the least senior employee in the
                                             plant

                                    *        the least senior employee in Group
                                             5 [See Pay Plus Bonus Addendum]

                                    *        the least senior employee in a job
                                             class for which the laid off
                                             employee was previously qualified
                                             in

                           If an employee does not wish to bump they may be
                           placed on surplus labor.

                           Any employee laid off for lack of work shall have
                           his/her name placed on a surplus labor list. If an
                           employee's seniority has been broken his name shall
                           be removed from such list.

                  C.       Each employee affected by the layoff will be given an
                           interview regarding bump, surplus and recall. It is
                           the responsibility of the employee to identify in
                           writing which job he/she wishes to be recalled for.

         7.04     RIGHT OF RECALL

                  A.       The Company recognizes the principle of seniority
                           (first laid off be the first recalled) in line with
                           the following.

                  B.       The Company will return the most senior employee on
                           layoff to such employee's former job classification,
                           when an opening occurs in that classification, before
                           placing the job up for bid provided the employee has
                           specified in writing they would return to their
                           former classification during the layoff interview.



                                      -12-
<PAGE>


                  C.       In the event a job is posted and there are no
                           bidders, the most senior employee on layoff will be
                           recalled for that job in line with information
                           provided in their layoff interview.

                  D.       When the employee refuses to accept available work as
                           outlined above, such refusal will terminate the right
                           of recall and result in the loss of all seniority
                           rights.

                  E.       RETURN FROM SURPLUS LABOR. Return From Surplus Labor
                           - if due to Seniority Rules in Section 7.03 B. above,
                           an affected employee must go on surplus labor, the
                           same rules would apply returning to open jobs.

                  F.       If an employee is laid off longer than twelve (12)
                           months, he/she shall have recall rights for an
                           additional six (6) month period without loss of
                           seniority. This additional six (6) month grace period
                           for recall purposes only may not be extended for any
                           other purpose and shall not be credited toward
                           accumulation of seniority

         7.05 NOTICE OF RECALL. An employee on layoff who is recalled for work
will be notified by overnight mail. Failure to report to the Employment Office
within forty-eight (48) hours after the receipt of notice to report will result
in the termination of seniority. Overnight letters to employees being recalled
will read:

                  "Job available. Union Contract requires you report within 48
                  hours"

The burden of proving delivery of notice by overnight mail to the employee's
last known address shall solely be that of the Company.

         7.06 CHANGE OF ADDRESS. It will be the duty of employees to keep the
Company advised of any change of residence. Any employee who fails to do so or
who fails to respond to the notice in section 7.05 shall have no recall rights
to the then available job, but his seniority will not be forfeited until the
Union has been notified of his failure to respond in which event the Union will
have five (5) days in which to locate said employee. Failure on the part of the
Union to locate the employee within the above five (5) days will mean forfeiture
of all seniority rights by the employee involved.

         7.07 FURLOUGH. In order to provide a more reasonable work schedule for
senior employees when hours are shortened due to business conditions, the
Operations Manager (or appointed designee) will have the responsibility of
placing on furlough those employees who are not needed to meet the daily
production requirements. The furloughed employee(s) will be placed on surplus
labor so as to make them eligible for unemployment benefits during the furlough
period, if otherwise eligible. On a volunteer basis, the furlough will be
conducted by classification, then shift and by seniority, starting with the most
senior employee, without the bump/roll process. If the number of volunteers are
insufficient, the furlough will proceed starting with the least senior employee
by


                                      -13-
<PAGE>

classification, shift and seniority, without the bump/roll process. The furlough
will not be of a length that would allow for cessation of health benefits
(except as in section B below), meaning that an employee must work at least one
day in a given calendar month. The employee will make up their portion of
premium contributions upon their return from furlough.

         A.       If an employee is to be furloughed a continuous month, then
                  the Company will make the employee's benefits contribution for
                  that month.

         B.       A furlough is not to exceed a time frame which would encompass
                  more than one calendar month. Stated another way, a furlough
                  cannot exceed a combination of two partial months (at least
                  one day worked) plus one calendar month. Should business
                  conditions warrant a longer time frame, then layoff language
                  will be referenced.

         7.08 PROBATIONARY PERIOD. New employees shall be considered
probationary employees until they have completed the probationary period of 60
days. During the probationary period an employee may be discharged at the
discretion of the COMPANY with or without cause. Any employee who completes
his/her probationary period shall commence his/her seniority as of the date of
employment and his/her seniority shall remain in full force and effect and shall
accumulate thereafter until terminated, all as herein provided. No employee
shall be required to serve more than one (1) probationary period, provided such
employee is rehired within one year. The Company, however, retains the right to
terminate such employee in the event he or she has not demonstrated the ability
to successfully perform the job within thirty (30) days of rehire.

         7.09 BIDDING. Any employee with greater than 60 days seniority is
eligible to bid, except as noted in 7.09(A). The Company shall have the option
not to repost a position which has been posted within the previous 60 days;
provided, the company provides the Union President with all posted jobs and
bidders to monitor compliance.

                  When it is necessary to fill a new job, such positions shall
be posted by the Company on bulletin boards for twenty four (24) hours. All bids
will be held in strictest confidence. At the end of this period, all bids will
be reviewed with the Local President (or designee) and the Company shall fill
this job with the qualified bidder having the greatest seniority. In the event
an employee with from sixty (60) days to six (6) months seniority is the
successful bidder, the company has the right to award or decline the bid. The
determination of qualifications shall be exclusively a right of the Company.

         A.       To be eligible for bidding purposes, an employee must have not
                  successfully exercised the right to bid for at least twelve
                  (12) months. Successful bidder must not have had a final
                  written warning within the last 30 days.

         B.       Employees on the active payroll who are successful bidders on
                  an open job will receive the base rate of the job they have
                  bid on during their learning period.


                                      -14-
<PAGE>

         C.       It is agreed that the successful bidder will be transferred to
                  a new job as soon as possible; but in no case will he/she
                  remain longer than three (3) weeks on his/her former job,
                  during which time the Company will have the opportunity to
                  provide a suitable replacement.

         D.       Should the Company choose to withdraw a posted job that was
                  successfully bid on, that job cannot be posted for sixty (60)
                  calendar days. If posted prior to 60 days, the job will be
                  awarded per the original bids.

         7.10     FAILURE TO SUCCEED ON BID JOB.

                  A.       In the event a successful bidder is unable to
                           satisfactorily learn the new job in accordance with
                           the leaning curve, such employee may return to
                           his/her former job, if available. If not available,
                           such employee may:

                                    *        bump the least senior employee in
                                             the plant

                                    *        bump the least senior employee in
                                             Group 5 [See Pay Plus Bonus
                                             Addendum]

                                    *        bump the least senior in a job
                                             class for which previously
                                             qualified.

                  B.       Employees may be disqualified from a job
                           classification for bona fide physical reason, in
                           which event they may bump the youngest in the plant
                           or go on surplus labor. The term "bona fide physical
                           reason" as used herein shall mean that the employee
                           has a permanent physical disability or condition that
                           prevents him/her from performing the job in a
                           satisfactory manner and such disability is verified
                           in writing by a licensed physician.

         7.11 DISQUALIFICATION FOLLOWING A BUMP, ROLL OR TRANSFER. [See Pay Plus
Bonus Addendum] An employee placed on a job as the result of a bump, roll or
transfer who fails to qualify in accordance with the learning curve, will be
permitted to roll or bump the least senior employee in Group V or be placed on
surplus labor. Employees who have been disqualified three (3) times will be
terminated.

         7.12     COMBINED CLASSIFICATIONS.

                  A.       [See Pay Plus Bonus Addendum] When posting the
                           combined job classification, the rate of the highest
                           classification will be used to determine the base
                           rate. If all base rates are equal, an additional $.25
                           per skill will be added to the base rate once
                           competence is demonstrated.

                  B.       [See Pay Plus Bonus Addendum] Any employee assigned
                           to his/her secondary skill must be assigned to such
                           for a minimum of two (2)


                                      -15-
<PAGE>

                           consecutive hours. The Company agrees that no more
                           than one move will be made per day.

         7.13     TRAINING.

                  A.       [See Pay Plus Bonus Addendum] The Company will train
                           senior employees that request training in new jobs.
                           Payment for training purposes will be at the existing
                           labor grade rate of the new or old job, whichever is
                           higher. When the employee earns piecework, he/she
                           shall receive such.

                  B.       [See Pay Plus Bonus Addendum] The Company has the
                           right to train employees in any particular job
                           grouping provided such employees are the youngest
                           untrained in seniority.

         7.14     REFRESHING OF SKILLS.

                  Refreshing of Skills will be paid as follows:

                  less than 30 days off the job  =        No training
                  30 to 60 days off the job      =        8 hours training
                  60 days to 6 months off job    =        16 hours training
                  excess of 6 months off job     =        24 hours training

         7.15     SKILL GROUP CLASSIFICATIONS.

                          NEW CLASSIFICATION STRUCTURE
                                FOR ATLANTA PLANT
<TABLE>
<CAPTION>

SKILL GROUP                CLASSIFICATION DESIGNATION                            WEEKS OF TRAINING
-----------                --------------------------                            -----------------
<S>                               <C>                                                  <C>
I                                   CUTTING

                                    A.  Matts, B/S                                      4
                                    B.  Slitter                                         4
                                    C   Overcast Borders                                4

II                                  SEWING

                                    A.  Matts, B/S                                      8
                                    B.  Overcast & Label                                8
                                    C.  Quilt Machines                                  8
                                    D.  Border Room                                    10
                                    E.  Sew Pillowtops/Matt Borders                     8
</TABLE>

                                      -16-
<PAGE>
<TABLE>
<CAPTION>

<S>                               <C>                                                  <C>
III                                 MATTRESS

                                    A.  Close Mattress                                  20
                                    B.  Hog Ring                                        4

IV                                  BOX SPRING

                                    A.  Assemble & Finish Wood Frames                   4
                                    B.  Top Off Construction                            4
                                    C.  Preload                                         4
                                    D.  Upholster B/S                                   6

V                                   INDIRECT LABOR

                                    A.  Inspection                                      2
                                    B.  Material Handlers                               1
                                    C.  Shipping                                        1
                                    D.  Receiving                                       1
                                    E.  Sweepers                                        1
                                    F.  Repairs                                         8
                                    G.  Packing Matts & B/S                             1

VI                                  MECHANICS

                  QUALIFICATIONS & TRAINING. Must successfully pass Department
                  of Labor Standards for Apprentice or complete appropriate
                  vocational school courses.

                  It is agreed that those currently in such classifications for
                  one (1) year or more will not be required to meet DOL
                  admission standards

VII                                 ULTRASONIC CONSTRUCTION

                                    A.  Ultrasonic Coil Operator                        8
                                    B.  Assemble Construction Operator                  6
                                    C.  Finish & Inspect Construction                   4
</TABLE>


         7.16 APPROVED LEAVE. [See Pay Plus Bonus Addendum] Approved leave
requires at least three working days notice. In the event of extreme emergency,
an employee must call in to the Human Resources Manager and request the leave.
Documentation must be presented the following day to the Human Resources Manager
for approval. In the event of conflict over time needed, advance notice
required, documentation to support the leave request, or other matters related
to the application of the approved leave, the matter will be resolved by mutual
consent of the Local 2401


                                      -17-
<PAGE>

President (or designee) and the Operations Manager (or designee). Employees will
not be reimbursed, either in time or money, for approved leave time not used in
a calendar year. Approved leave will be granted by the following schedule:

         Employees eligible for one (1) week vacation will be eligible for one
         (1) unpaid day per year;

         Employees eligible for two (2) weeks vacation will be eligible for one
         (1) paid day per year;

         Employees eligible for three (3) weeks vacation will be eligible for
         one (1) paid day and one (1) unpaid day per year;

         Employees eligible for four (4) weeks vacation will be eligible for two
         (2) paid days per year;

                  Approved Paid Leave will be reimbursed via the number of days
of paid leave taken times the employee's average for incentive workers. For
employees in a split classification, the higher rate will be applied. Day
workers will be paid at their hourly rate.

         7.17 LEAVE OF ABSENCE FOR UNION ACTIVITY. The Company will not deny a
request for a leave of absence to any employee accepting a position with the
Union. A leave of absence for other purposes, if granted by the Company, may be
granted for a thirty (30) day period, subject to the Company's review at the end
of the thirty (30) day period.

         7.18 PROCEDURE FOR REHIRING FROM LEAVE OF ABSENCE FOR UNION BUSINESS.
At the expiration of a leave of absence for Union business, such employee on
request, shall be reinstated to the position he/she held prior to his/her leave
of absence, provided request is made within sixty (60) days after such employee
is available to return to work. If such position has been eliminated, then
he/she shall be given other employment for which he/she is suited in accordance
with his/her seniority rights.

         7.19    BUMPING (ROLLING) PRODUCTION AND MECHANICAL EMPLOYEES.

                  A.       [See Pay Plus Bonus Addendum] No production employee,
                           pieceworker, or day worker will be permitted to bump
                           any employee in Skill Group VI, Mechanic, Machinist,
                           Electrician.

                           No employee listed in Skill Group VI (above) will be
                           permitted to bump a production employee, pieceworker
                           or day worker.

                           The above does not limit employees from bidding on
                           open jobs in Class VI, provided such employees have
                           the basic qualifications when the bid is placed.

                           Should a person bid and subsequently be disqualified,
                           such individual would return to the job he/she held
                           prior to the bid, or bid on another open job, or


                                      -18-
<PAGE>

                           bump to an open job. The above bid or bump would be
                           permissible only if such were available at the time
                           of disqualification.

                  B.       Mechanic, Machinist Apprentice Program: No production
                           employee, pieceworker, or dayworker will be permitted
                           to bump (roll) any employee on the mechanic/machinist
                           training program after the trainee starts on the
                           training job.

                           No employee in the mechanic machinist training
                           program will be permitted to bump (roll) a production
                           employee, pieceworker or dayworker except in the
                           event of disqualification. If disqualified, such
                           trainee would return to the job he/she held prior to
                           bidding on the training program or could bid on
                           another open job or roll to an open job.

                  C.       Mechanics will not be compelled to work outside their
                           classification.

                  D.       Memorandum of Agreement on Maintenance Leadman will
                           remain as is with the exception that all increases
                           granted under this contract will be added to the
                           current rate.

         7.20 HIRING RATE & PROGRESSION. [See Pay Plus Bonus Addendum] All new
employees will be hired at $8.00 per hour effective 10/16/97. Incentive
employees will be paid hire rate or level of productivity, whichever is greater
until the end of their probationary period. Hourly workers will be paid their
hire rate until the end of their probationary period, at which time they will be
paid rate of the job.

         7.21 WAR EMERGENCY. In the event of a war emergency, the parties agree
to discuss revision of the seniority provisions of this AGREEMENT for the
purpose of providing for such revision as may be necessary because of the
employment conditions then existing.

         7.22 SENIORITY BONUS. All employees with eighteen (18) years or more of
continuous seniority will be granted a seniority bonus of one (1) week's pay
either at Christmas or at the time of their vacation, as the employee chooses.

                                  ARTICLE VIII

                                      WAGES

         8.01 HOURLY RATES. The Company and the Union have agreed upon the
hourly base rates as set forth in Appendix I and II combined by Skill Group.

         8.02 GENERAL WAGE INCREASES.


                                      -19-
<PAGE>

                  A.       A general wage increase of thirty-five (35) cents per
                           hour for all employees will be granted effective
                           October 16, 2001. The increase will also be applied
                           to the previous quarterly average and paid effective
                           November 1, 2001. All basic rates, all hourly rates
                           and all labor grades will be increased to reflect the
                           increase.

                  B.       A general wage increase of thirty (30) cents per hour
                           for all employees will be granted effective October
                           16, 2002. The increase will also be applied to the
                           previous quarterly average and paid effective
                           November 1, 2002. All basic rates, all hourly rates
                           and all labor grades will be increased to reflect the
                           increase.

                  C.       A general wage increase of thirty (30) cents per hour
                           for all employees will be granted effective October
                           16, 2003. The increase will also be applied to the
                           previous quarterly average and paid effective
                           November 1, 2003. All basic rates, all hourly rates
                           and all labor grades will be increased to reflect the
                           increase.

                  D.       A general wage increase of thirty (30) cents per hour
                           for all employees will be granted effective October
                           16, 2004. The increase will also be applied to the
                           previous quarterly average and paid effective
                           November 1, 2004. All basic rates, all hourly rates
                           and all labor grades will be increased to reflect the
                           increase.

         8.03 REACTIVATION OF OLD CLASSIFICATIONS. Whenever an obsolete
classification is reactivated, it is understood that all intervening wage
adjustments shall automatically be added to the original rate thereof.

         8.04 ESTABLISHMENT OF NEW CLASSIFICATIONS. [See Pay Plus Bonus
Addendum] In the event it becomes necessary to establish a new classification,
the Company and the Union shall meet for the purpose of reaching agreement as to
the rate for such classification.

                  The Company and the Union, in an attempt to reach an
Agreement, shall take into consideration similar classifications in the plant
previously or presently in existence.

                  If the parties fail to reach an agreement within three (3)
working days, the resolution of the rate will be moved to expedited arbitration
(in accordance with the procedure outlined in ARTICLE III). The Company will
assign a temporary employee at his average rate to the new classification who
shall perform the operation until such time as an agreement is reached or is
resolved by arbitration. When the rate of the disputed classification is agreed
upon or resolved as provided above, the job will be filled in accordance with
the terms of this agreement set forth in ARTICLE VII Section 7.09.


                                      -20-
<PAGE>

         8.05 BORROWED MAN. [See Pay Plus Bonus Addendum] When an employee is
borrowed for the convenience of the Company and given a type of work to perform
other than the type of work at which he/she is (normally) employed, then his/her
rate shall be his/her average hourly earnings rate, provided such average is
greater than his/her earnings on incentive or the day work rate for the work
being performed. An employee will be paid the rate of the job if there is no
work in an employee's job classification and they are offered work in another
classification and accept such work.

                  No job may be filled by borrowed personnel for more than sixty
(60) days during any twelve (12) month period except by mutual Agreement between
the Company and the Union, except in situations in which the training period
exceeds sixty (60) days.

         8.06 AVERAGE RATE COMPUTATION. [See Pay Plus Bonus Addendum] Individual
average hourly earnings rates for employees working in incentive classifications
will be computed quarterly by dividing the total number of hours that the
incentive worker has worked, including average rate payment, if any, into the
total straight time earnings of that individual. The hours shall include the
total hours of any incentive worker except those hours when the worker is in a
holiday or vacation status, or time working any classification other than the
worker's own. A copy of such average hourly earnings shall be made available to
the Union. Each year the Company will advise the Union, in writing, the specific
dates which determine the period of earnings on which averages are based.

                  In the event an  employee  has not established an average
hourly rate due to the fact that the employee has not worked during the
immediately preceding calendar quarter, then the employee's average rate shall
be equal to the employee's average rate for the last quarter the employee
worked.

         8.07     INJURED DURING WORK

                  A.       [See Pay Plus Bonus Addendum] If an employee is
                           injured in the plant while performing his work
                           assignment and it is necessary for him to receive
                           treatment by either the Company nurse or Company
                           doctor during his regularly scheduled working hours,
                           the Company shall pay for the time spent in the
                           treatment of such injury on the day the injury
                           occurred at his average rate if an incentive worker
                           or his hourly rate if an hourly worker. If either the
                           nurse or doctor certifies that such injured employee
                           is unable to continue work because of such injury,
                           the Company will pay for the balance of his scheduled
                           shift at his average rate for incentive worker and
                           hourly rate for hourly worker. If the doctor requests
                           subsequent visit(s) during his regularly scheduled
                           shift for the treatment of this injury, the Company
                           will pay for the time spent in this treatment at the
                           employee's average rate for incentive worker and
                           hourly rate for hourly worker. To minimize employee
                           inconvenience, such subsequent visits will be
                           scheduled, if possible, during the employee's regular
                           shift. However, where a second or third shift
                           employee is injured on the job and subsequently
                           requires additional treatment for this injury, then
                           such visits shall be scheduled by the Company's


                                      -21-
<PAGE>

                           Personnel Department at a time consistent with the
                           treating doctor's office hours.

                  B.       The employee will be clocked out in time to make the
                           appointment as scheduled. When the employee leaves
                           the doctor or nurse, he/she will receive a release
                           form that will show the completion time of the
                           appointment. Upon returning to his/her department,
                           the employee will present this form to his/her
                           supervisor and will be clocked back in for return to
                           work.

                  C.       It is agreed that for all such visits off the Company
                           premises, upon request, the Company will furnish
                           transportation if the employee is unable to drive or
                           has no means of transportation.

                  D.       None of the sections of this paragraph are to be so
                           construed that benefits will inure in addition to or
                           pyramiding on disability payments or workers'
                           compensation payments.

         8.08 PAY SHORTAGES. Employees who establish a shortage in pay, due to
Company errors, shall receive a special check provided the amount is in excess
of ten dollars ($10.00) within twenty-four (24) hours after such shortage has
been established. Special checks for pay shortages due to employee error, such
as not turning in piecework paperwork at end of shift, will not be granted.

                                   ARTICLE IX

                             STANDARD ALLOWED HOURS

         9.01 INCENTIVE COMPENSATION PLAN. [See Pay Plus Bonus Addendum] It is
agreed that the Company, at any time, may install an incentive compensation plan
in any operation, job, or variation of any operation or job where, in its
judgment, such a plan is practicable. When an incentive program is implemented
the Company will provide the incentive earnings opportunity for the Plant as a
whole that will approximate the incentive earnings opportunity which existed
prior to the implementation of the new incentive program. Such incentive
compensation plans, when established, may be made applicable to individuals or
groups of individuals and will provide for skilled employees an incentive
earnings opportunity for increased productivity. Effective October 15, 1982, the
standard allowed hour system will replace the price per piece (piecework)
system. It is recognized by the parties, however, that certain bonus plans such
as packing, pre-loading, off-bearing, and allocating (shipping), and ultrasonic,
etc. may nevertheless continue, inasmuch as special circumstances make it
difficult to effect a conversion to SAH at this time.

         9.02 NEW OR VARIED JOBS AND OPERATIONS. [See Pay Plus Bonus Addendum]
If a new job, new operation, or variation of an existing operation is set up,
the supervisor shall notify the shop steward and the operator's experience time
shall begin on the date of this notification.


                                      -22-
<PAGE>

                  Whenever time studies are necessary, the floor observations of
the Company's Time Study Engineer will be of at least thirty (30) minutes
duration in order to assure a representative sample of the job. The operator who
is to be time studied or analyzed will be paid his/her average hourly rate until
a new standard is submitted.

                  The Company shall select an average operator or as close to
average as possible, for time study methods analysis. Average is defined as an
operator working at a normal pace, under normal working conditions, with the
skills required for the specific job. Until a new standard or incentive value is
submitted, the employee who works on a unit for which there is no standard or
standard allowed hour will be paid his/her average hourly rate for such unit.

         9.03 STANDARD ALLOWED HOURS. [See Pay Plus Bonus Addendum] In all
cases, the SAH will be determined by dividing the TOTAL STANDARD MINUTES by a
SIXTY (60) MINUTE HOUR.

                             SAH per piece    =        TSM
                                                       ---
                                                              60

                  The Basic Rate of the Classification will be as stated herein.

                  The BASIC PRODUCTION EXPECTANCY will be determined by dividing
a SIXTY (60) MINUTE HOUR by the TIME PER PIECE at one hundred percent (100%)
rating increased by a ten percent (10%) rest, fatigue, and delay allowance
(effective 10/16/94, the RFD factor on new or revised standards shall be twelve
and one-half percent (12.5%)).
<TABLE>
<S>                                                                <C>
                  Basic Production Expectance                 =        60 MINUTE HOUR
                                                                       --------------

                                                                        100% Time/Piece Allowance Plus 10% RFD
                                                                        Allowance (12.5% on new or revised standards
                                                                        after 10/16/94)

                  Basic Production Expectance x SAH = Hours Earned
                  Hours Earned x Base Rate = Rate per Hour

                          Example of Incentive Earnings
                      OPPORTUNITY OFFERED BY ABOVE FORMULA
                      ------------------------------------
                  .1362 SAH         =       TSM OF 8.1738
                                            -------------
                                            60 Minute Hour

                  7.3405 Pieces per hour
                  Basic Production Expectancy                 =        60 MINUTE HOUR
                                                                       --------------
                  (Cycle base minutes)                                 7.4307 (100% Time/Piece) plus
                                                                         .7431 (10% RFD Allowance)
                                                                       -------
</TABLE>


                                      -23-
<PAGE>
<TABLE>
<S>                                                                   <C>
                  TSM                                                  8.1731 (Total Standard Minutes)

                  A.       7.3405 pieces/hour 100% at 25% incentive pace equals 9.1756 pieces/hour

                  B.       9.1756 pieces @ SAH .1362 = 1.25 hours earned

                  C.       Base Rate - $6.18

                  D.       1.25 hours earned x Base Rate 6.18 = $7.72/hour

                  E.       Earnings/Hour    7.72
                                            ----
                           Base Rate                 6.18 = 125% incentive

                           Earnings opportunity at +25% incentive pace
</TABLE>


         9.04     WRITTEN CONFIRMATION AND EFFECTIVE DATE OF SAH.

                  A.       It is agreed that, whenever an SAH standard is
                           computed, it shall be submitted in writing to the
                           operator and become effective immediately. this
                           computation may consist on an actual clocking of the
                           work or an analysis of previous standards or records
                           of comparable or similar work. The Company will
                           furnish a complete written prescribed job methods
                           description to the Union whenever new standards or
                           revised standards are submitted. Once such job
                           methods change is submitted in writing, the Company
                           has a ninety (90) day period in which to adjust the
                           time in the event such adjustment is necessary. If
                           such time value is neither adjusted by the Company
                           nor grieved by the Union, neither party can expect
                           revision of such change after the expiration of
                           ninety (90) days. No standard changes can be effected
                           without a written job methods change.

                  B.       The written confirmation referred to above will
                           indicate whether the standards were developed from a
                           clocking analysis, local plant standard data, or a
                           combination of time study and data.

         9.05 PROCEDURAL INTERPRETATION OF SECTION. [See Pay Plus Bonus
Addendum] Current standards are guaranteed unless the Company makes a change in
method, means, process, equipment, production conditions, or product design.
Where such change results in an addition to the standard task time, an
adjustment will be made to proportionately reflect the change.

                  In those instances where the change results in greater output,
the time will be proportionately adjusted to reflect the diminution in task
time. Thus, standards will be revised to reflect the changes of the job,
operation, or variation of any operation in the degree the change in the task
affects the standard upward or downward.

                  Where the change represents less than five percent (5%) of the
cycle base minutes, the Company will use standard data from its bank of
appropriate basic time study standards in determining the new task time
reflecting the change. The Company may restudy the operation in those instances
where the elements of work affected by the revised method exceed five percent
(5%)


                                      -24-
<PAGE>

of the originally submitted cycle base minutes of the entire task. In those
instances where there was no original time study taken, where standards were set
by negotiations, or where element breakdown was not measured, or where the
additions and deletions are not sufficiently distinct to permit addition or
subtraction from work content, the Company will develop time from a restudy of
the entire operation. Every time a change of sufficient impact to justify a
modification of standard is contemplated, all other changes from the time the
standards were last established will, of course, be included in the new
measurement of the task. It is contemplated that there will be occasions where
preceding and succeeding elements will be affected by change. Similarly, it is
contemplated that preceding and succeeding operations for classifications may be
affected by a change. In those instances, it will be necessary to measure and
modify the impact of such change. Once the appropriate addition or deletion is
developed, such time will be translated into an SAH on the basis of current
labor grades or basic rates.

                  In order to preserve the integrity of earnings as well as
integrity of job methods and product quality, it is agreed that neither the
supervisor nor the employee can change the prescribed method of performing the
incentive task. All changes and resulting standards, in order to become
effective and binding, must be initiated in writing by the Time Study
Department. For identification purposes, the Company, on October 15, 1973,
installed an administrative procedure on all new time studies which enables a
departmental shop steward or other designated Union official to sign a copy of
such new standard data or chart issued as a consequence of such new time study.

         9.06     GRIEVANCES REGARDING INCENTIVE STANDARDS

                  A.       [See Pay Plus Bonus Addendum] Before submitting any
                           grievance on an SAH standard, the operator will work
                           at the submitted standard for a period of at least
                           thirty (30) calendar days.

                  B.       [See Pay Plus Bonus Addendum] If, after thirty (30)
                           calendar days from the date on which the standard is
                           submitted, the operator(s) is not satisfied with the
                           standard, such operator(s) shall have the right of
                           protesting said standard by submitting a written
                           complaint in accordance with the grievance and
                           arbitration procedure of this Agreement, provided
                           this right is exercised within a period of ninety
                           (90) calendar days from the date the standard was
                           originally submitted. Failure to exercise this right
                           of protest within the above-described ninety (90)
                           calendar days shall constitute an automatic
                           acceptance of the submitted standard. Whenever a
                           standard has been automatically accepted by failure
                           of the Union to initiate action under the grievance
                           and arbitration procedure within ninety (90) days, no
                           new grievance can be submitted in connection with
                           this particular standard. A resolution of grievances
                           over incentive standards shall be retroactive to the
                           date the protested standard was originally submitted.


                                      -25-
<PAGE>

                  C.       If the Company Time Study Department finds no error
                           in the submitted standard and the matter is still in
                           dispute, then it may be processed in accordance with
                           the grievance and arbitration procedure to determine
                           whether or not the standard as established is
                           contrary to the provisions of this Agreement.

                  D.       It is agreed by the parties hereto that in the case
                           of disputes concerning the accuracy of the Company's
                           clocking analysis the impartial chairman described in
                           Section 3.07 must be a qualified time study engineer.
                           The findings of the impartial chairman shall be final
                           and binding on both parties and shall be retroactive
                           to the date the SAH was originally submitted.

         9.07 AVAILABILITY OF TIME STUDY DATA. The Company agrees that it will
conform to the law with respect to making available such time study data as may
be needed by authorized Union officials from time to time in the course of
processing grievances under this Agreement with regard to incentive standards.
It is agreed that such data will not be misused and that it will be kept
strictly confidential so as to insure that Company means, methods, and
production processes will never be revealed to parties not bound by this
Agreement. The Union time study engineer and the Company time study engineer
will meet for the purpose of resolving the question of unsupported time study
back-up data.

         9.08 UNION TIME STUDY ENGINEER. When the Union desires to have a
designated time study engineer visit the plant in order to verify Company
standards or job content as the consequence of a grievance by that Local Union,
the procedures will be as follows:

                  A.       The Union counsel shall write the Company Senior Vice
                           President - Human Resources suggesting a list of
                           dates a minimum of two (2) weeks prior to the
                           proposed visit.

                  B.       The Company designee will respond by either selecting
                           from the Union list or by offering alternative dates.

                  C.       Once the above two (2) designees complete
                           arrangements, they will notify their respective local
                           Company and Union representatives the agreed upon
                           dates for the visit.

         9.09 STANDARD DATA. Consistent with the mutual desire of the parties to
minimize or eliminate the grievances and problems now inherent in work
measurement via stop watch and also the attendant difficulties occasioned by
disagreement over pace determination, the Company will, whenever feasible, set
incentive job standards by use of pre-determined, pre-leveled time values, i.e.,
use of a data bank.


                                      -26-
<PAGE>

                  To ensure greater objectivity, the Company will detail and
define more completely the methods involved in each operation.

                                    ARTICLE X

                                  PAID HOLIDAYS

         10.01 HOLIDAYS OBSERVED. The following paid holidays shall be
celebrated:

                                    New Years
                                    Day Martin Luther King's Birthday
                                    Good Friday
                                    Memorial Day
                                    Fourth of July
                                    Labor Day
                                    Wednesday before Thanksgiving
                                    Thanksgiving Day
                                    Friday after Thanksgiving Day
                                    Last work day before Christmas
                                    Christmas Day

         10.02 ELIGIBILITY. In order to receive holiday pay, an employee must
have sixty (60) days or more of service and must have worked the full scheduled
day before and after the holiday except in the case of sickness to the
individual and evidence of such sickness supported by a doctor's certificate and
unless excused by the Company.

         10.03 SICK LEAVE . When an eligible employee is on sick leave, he/she
shall receive pay for one such holiday. An employee on an approved leave of
absence as described in Section 13.01 of this Agreement will not receive holiday
pay.

         10.04 HOLIDAY PAY. Holiday pay shall be included in the pay check for
the pay period in which the holiday falls.

         10.05 HOLIDAYS DURING APPROVED VACATION. When any of the above holidays
falls within an eligible employee's approved vacation period and the employee is
absent from work during his regularly scheduled work week because of such
vacation, the employee shall be paid for such holiday in addition to vacation
pay and shall have such day off.

         10.06 MULTIPLE HOLIDAYS ON SAME DAY. If any two (2) or more of the paid
holidays shall occur on the same day, the employee will be paid for each of said
holidays but shall have only one (1) day off.


                                      -27-
<PAGE>

         10.07 HOLIDAYS ON SUNDAY. When any of the paid holidays falls on Sunday
and the day following is observed as the holiday, the latter day shall be the
paid holiday.

         10.08 HOLIDAYS ON SATURDAY. The parties agree that whenever a holiday
falls on Saturday it shall, at the discretion of the Operations Manager, be
celebrated on either the preceding Friday or the following Monday. Notice of the
date selected will be posted two (2) weeks in advance. In the above situation,
no work will be scheduled on such Saturday to avoid holiday premium pay.

         10.09 PAY RATE. [See Pay Plus Bonus Addendum] Holiday pay will be at
eight (8) times the employee's average hourly earnings rate as computed in
section 8.06 for incentive workers; day workers will be paid at eight (8) times
the employees regular day work hourly rate. Shift premium shall be included in
holiday pay computation for eligible employees. The following conditions apply
to receive holiday pay:

         A.       Any employee required to work on the above mentioned holidays
                  will receive time and one half pay for work actually performed
                  plus eight (8) hours at his average hourly straight time
                  earnings.

         B.       The time allowed for holidays and not actually worked by
                  employees shall be included in determining the number of hours
                  worked during the week with respect to overtime compensation.

         10.10 OVERTIME AND PREMIUM PAY. For purposes of computing overtime and
premium pay, holidays herein designated shall be regarded as days worked in the
week in which they occur whether or not work was actually performed during such
hours.

         10.11 PLANT SHUTDOWN. If for any reason beyond the control of the
employees of the Simmons Company, Atlanta Works, the entire plant is shut down
for a period of one week, during which a holiday occurs, eligible employees will
receive compensation for the paid holiday involved.

         10.12 In conformance with Federal law enacted in 1968 and effective
1/1/71, certain Mondays shall be observed as legal holidays - Memorial Day (last
Monday in May) and Labor Day (first Monday in September).

                                   ARTICLE XI

                                 PAID VACATIONS

         11.01 VACATION. The Company will grant paid vacation to employees as
follows:

                  (a)      Employees with from one (1) to three (3) years of
                           continuous service shall receive an annual week of
                           vacation with pay for forty (40) hours if otherwise
                           eligible;


                                      -28-
<PAGE>

                  (b)      Employees with three (3) to twelve (12) years of
                           continuous service shall receive two (2) weeks of
                           vacation with pay for eighty (80) hours if otherwise
                           eligible;

                  (c)      Employees with twelve (12) to eighteen (18) years of
                           continuous service shall receive three (3) weeks of
                           vacation with pay for one-hundred twenty (120) hours
                           if otherwise eligible;

                  (d)      Employees with eighteen (18) or more years of
                           continuos service shall have the option of taking a
                           fourth week of vacation in lieu of the seniority
                           bonus (section 7.22) if otherwise eligible. Selection
                           of the fourth week will be at a time convenient to
                           the Company.

                  (e)      Full vacation benefits will be paid to those who are
                           otherwise eligible in the following circumstances:

                           (1)      To the employee's estate in the event of the
                                    death of the employee;

                           (2)      To the employee in the year of his or her
                                    retirement.

                  (f)      The Company will pay one additional week vacation pay
                           at vacation rate for employees with twenty five (25)
                           or more years of seniority with no additional time
                           off.

         11.02 PAY RATE. Pay for each week of vacation will be figured at forty
(40) times an employee's average hourly earning rate of the previous quarter if
an incentive worker and the employee's regular hourly rate if paid on an hourly
rate, excluding overtime premiums.

         11.03 PLANT SHUTDOWN AND STAGGERED VACATION. The Company shall notify
the Union, no later than January 1 of each vacation year, whether the plant will
shut down or whether there shall be staggered vacation on an individual employee
basis. Prior to January 1 of each year, vacations for eligible employees will be
scheduled by classification and seniority in accordance with period January 1 to
December 31. If the Company decides on plant shutdown, those employees who had
their vacation time earlier and are not eligible for any more vacation time
during the year, and not required to work during the shutdown, will be
furloughed during the plant shutdown.

                  The Company may elect to ship finished products, modify,
maintain, or install equipment and manufacture process or finished product in
order to balance work flow, satisfy customer needs, or balance production
schedules and stock during a shutdown for vacation purposes.

         11.04 ELIGIBILITY. Eligibility for vacation will be determined by
measuring the year of earned vacation benefit pay from the anniversary date of
hire, rather than by calendar or fiscal year.



                                      -29-
<PAGE>


         11.05 SCHEDULING OF STAGGERED VACATIONS. If vacations are staggered,
then vacations for eligible employees will be scheduled by classification and
seniority in accordance with anticipated production requirements during the
period from January 1 to December 31, except that third and fourth weeks of
vacation for eligible employees may not normally be scheduled during the months
of May, June, July, August and September. Employees shall indicate in writing on
a form furnished by the Company their preferences for vacation dates during the
month of December of each year. At that time also, employees eligible for a
third week's vacation who wish to receive money in lieu of vacation and
employees eligible for the seniority bonus who wish to take vacation time off in
lieu of the bonus shall so indicate on the form. Vacation time will not be
altered except when operational needs are affected by illness. Exceptional cases
of third or fourth week vacations during the period of May, June, July, August
and September may occasionally be arranged when the Staff Representative or
Local Union Unit Chairperson can mutually agree to such with the Operations
Manager or the Labor Relations Specialist.

         11.06 NO ACCUMULATION. Employees may not accumulate vacation benefits
but must take them when eligible. Hardship cases may be considered and money may
be taken in lieu of vacation provided the Company will advise the Union of the
reason for such prior to payment of the vacation money to the employees
involved.

         11.07 SHIFT PREMIUM. Shift premium will be included in vacation pay
computation for employees otherwise eligible.

                                   ARTICLE XII

                                 INVENTORY WORK

         12.01 PREFERENCE. In selecting the employees needed for inventory
purposes, preference will be given to those employees best suited to do the
work. Division superintendents may assign unqualified day workers to material
handling, cleaning, etc.

         12.02 PAY RATE. [See Pay Plus Bonus Addendum] Day workers will be paid
the rate of their classification for all inventory work.

         12.03 PIECEWORKERS. [See Pay Plus Bonus Addendum] Whenever pieceworkers
are to be used for taking inventory, they shall be used in departments in which
they are familiar with the items to be inventoried. Pieceworkers who are
selected will receive their average hourly rate, unless otherwise mutually
agreed.

                                  ARTICLE XIII

                                LEAVE OF ABSENCE


                                      -30-
<PAGE>

         13.01 LEAVE. It is mutually agreed that any employee asking for a leave
of absence will be granted such leave at the exclusive discretion of the
Company. Leaves of absence will be granted provided an employee can be spared
without loss of production or other serious inconvenience to the Company. Leave
of absence will be for a period of thirty (30) days and will be reviewed by the
Company at the expiration of each thirty (30) day period. When a request for a
leave of absence has been denied by the Company, the Union can discuss the
subject with the Plant Manager if they feel the denial is unreasonable. The
Company agrees to give due consideration to Union request.

         13.02 RETURN. On the return of an employee from a leave of absence,
he/she shall be returned to work consistent with Section 7.04 E.



                                      -31-
<PAGE>


                                   ARTICLE XIV

                               USWA PENSION TRUST

                  USWA Pension Trust provides employees represented by the Union
with certain pension benefits as are from time to time determined by the
Trustees. The parties to this Agreement desire that the pension benefits now
granted and which may hereafter be granted by the Trustees be provided to the
employees covered by this Agreement.

                  The Company agrees, therefore, beginning with the month of
November 1988, and for each month thereafter for the duration of this Agreement,
to contribute, by no later than the tenth (10th) day of each month, to the USWA
Pension Trust a sum of money in an amount equal to six percent (6%) of the total
gross earnings accrued during the immediately preceding calendar month by all
the employees who were covered by this Agreement during the said immediately
preceding calendar month, including the total gross earnings of any such
employee whose employment was terminated during the said immediately preceding
calendar month. The Company shall transmit to said Trust, with each
contribution, a "Contribution Report," on the form furnished by the Trust which
the Company shall report the names, hire and termination dates as applicable,
and total gross earnings of all such employees during such calendar month. The
Company further agrees to supply to the Trust such information as may from time
to time be requested by it in connection with the benefits provided by said
Trust to said employees. The parties agree, however, that the coverage of a
newly employed employee shall not begin until the first day of the first
calendar month following the expiration of twelve (12) months from the
commencement of this employment, meaning that in calculating the contribution
due hereunder for the first twelve (12) months of coverage for the said newly
hired employee, his/her total gross earnings for the entire preceding twelve
(12) months shall be considered. Thereafter, the Company will make contributions
each calendar month. This exception for newly employed employees shall not apply
in the case of employees who have been previously covered under the USWA Pension
Trust in which event the Company shall report such employees and make
contributions as required herein beginning with the first calendar month
following the date of the commencement of such employment.

                  For the purposes of this clause only, a part time employee is
defined as one who is employed to regularly work less than the number of hours
established as the regular work week, which definition does not include regular
full time employees who are employed to work a full work week but who might be
working shorter hours due to lack of work, sickness, etc. Part time employees
shall not receive coverage hereunder nor shall their earnings be considered in
calculating the contributions due hereunder. For the purposes of accurate record
keeping, however, part time employees shall be listed on the contribution report
and their total gross earnings shown. Nothing in this clause shall be construed
as an affirmation or negation of the Company's right to employ part time
employees or as an indication of what other clauses of this Agreement might or
might not apply to certain employees.



                                      -32-
<PAGE>


                  In the event there is a default in the payment of
contributions as required herein, the payment thereof may be enforced by either
process of law or arbitration and if either suit or arbitration is initiated,
the debt owing to the Fund shall be increased to include the cost of suit and/or
arbitration and an attorney's commission of ten percent (10%) of the payments
then in default.

                  In consideration of the Company's aforesaid contributions to
the Trust as herein above provided and for so long as the Company's
participation in the Trust is accepted by the Trustees, the Trustees will,
beginning with the date of receipt by the Trust of the Company's first said
contribution and continuing for such part of the duration of this Agreement as
the Company fully complies with the terms of this clause in all respects, extend
and make available to employees covered by this Agreement the pension benefits
for which such employees are eligible under the Declaration of Trust, as amended
from time to time, which is by this reference incorporated herein and made a
part hereof. If, during the life of this Agreement, the Company's participation
in the Trust is rejected or terminated by the Trustees, this clause shall be
null and void and this Agreement shall be reopened and negotiations between the
parties entered into, but only as to the subject of the establishment of other
benefits in place of the USWA Pension Trust, but at a cost of the Company not to
exceed to the cost of the contribution hereunder.

                                   ARTICLE XV

           THE UNITED STEELWORKERS OF AMERICA HEALTH AND WELFARE FUND

The Company will allow retired employees to continue Health Benefits until such
time as the retiree reaches medicare eligible age, provided the Steelworkers
Health and Welfare Fund allows such participation, and further provided the
retiree pays the full premium for the coverage, and further provided the only
obligation or responsibility of the company is to accept and forward the
retirees full premium payment to the fund. The company shall not be liable for
any actions under this provision.

The procedure listed above will continue for a maximum of 24 months at which
time The Steelworkers Pension Fund will begin making the required deduction from
the pension payment of the retiree and submitting payment to the Health ad
Welfare Fund

         15.01 BENEFIT PLAN(S). The parties to this Agreement desire that the
benefits now granted by the Board of Trustees of The United Steelworkers of
America Health and Welfare Fund, hereinafter "Fund," in their plan of benefits
designated as Medical Plan E, Prescription Drug, Dental Plan, Accidental Death
and Dismemberment and Short Term Disability as more fully described in the
Participation Agreement be provided to the employees employed in the Union's
bargaining unit.

         15.02 CONTRIBUTION RATES. The month for which the contribution is due
is referred to as the "benefit month" and the month immediately preceding the
benefit month is referred to as the "wage month." The Company shall each and
every benefit month make the following monthly contribution to the Fund on each
and every eligible employee who elects benefit coverage.


                                      -33-
<PAGE>

         EFFECTIVE 11/1/2001, THE HEALTH INSURANCE PREMIUMS FOR EMPLOYEES WILL
BE AS FOLLOWS:
<TABLE>
<CAPTION>
                  EMPLOYEE ONLY COVERAGE                  MEMBER PLUS ONE                  FAMILY
                  --------------------------------------------------------------------------------
<S>                                                    <C>                           <C>
                  PPO     $32.00/month                    $  65.00/month                $  90.00/month
                  Plan E  $85.00/month                    $ 178.00/month                $ 234.00/month
</TABLE>

                  The cost sharing ratios for any increase in premiums up to the
5% cap shall be those ratios as determined by the ratios effective November 1,
2001.

                  The Employer and the Union shall have the right to confirm any
increase or decrease in contribution rates occurring during the term of this
Agreement. The Fund shall provide the Employer and the Union with information,
including carrier reports and other source documentation, reasonably necessary
to confirm such rate changes. Moreover, if requested the Fund will make a
personal presentation on an annual basis of any increases or decreases in
contribution rates. Any increase in total insurance premium costs in the second
year which exceeds five (5%) percent over the total insurance premium costs in
the first year will give the Company the option to cease participation in the
USWA Health and Welfare Fund. This same option will apply if the total insurance
premium costs in the third year exceed by more than five (5%) percent the total
insurance premium costs from the second year and similarly if the fourth year
exceeds the third year by more than five (5%) percent. If the Company opts out,
the Company and the Union reserve the right to review the plan and mutually
determine continuation of coverage through a plan offering comparable coverage.

         15.03 ELIGIBILITY. Eligible employees are all full time employees
employed within the Union's bargaining unit who have completed thirty (30) days
employment prior to the first calendar day of the benefit month. The term also
includes eligible employees who did not work at all during the wage month for
any of the following reasons:

                  A.       Disability due to sickness or accident, up to a
                           maximum of six (6) months per disability;

                  B.       Vacation; or

                  C.       Attendance at Union or fund Convention, seminar or
                           grievance hearing.

                  The Company is not required to make a contribution on an
employee whose employment is terminated during the wage month.

         15.04 EMPLOYEE CONTRIBUTIONS. Each such employee must, in writing,
authorize the Company to deduct the employee's contributions from the employee's
wages and to transmit same to the Fund. When supplied with such a written
authorization, the Company agrees to make the required deductions and to
promptly transmit same to the Fund. Employee contributions are due at the same
time as the Company contributions.


                                      -34-
<PAGE>

                  Employees who refuse or neglect to provide the Company with
the necessary written authorization to deduct the required employee
contributions will receive no Fund coverage. In those cases in which an employee
has supplied the Company with the required written authorization but because of
lack of wages the Company is unable to deduct the employee contribution for a
particular benefit month, it is the obligation of the employee to pay, in a
timely fashion, to the Company for transmittal to the Fund the required employee
contribution. The coverage of such an employee failing to make the required
payment on time is automatically terminated. Employee pre-tax co-pay will be
deducted on a weekly basis.

         15.05 SICKNESS AND HEALTH AND LIFE INSURANCE. For those eligible
employees who do not elect medical and dental coverage during the defined time
period, the Company will make a monthly contribution to the Fund of $70.62 for
sickness and accident coverage and life insurance coverage as provided by The
United Steelworkers of America Health and Welfare Fund Trust.

         15.06 PAYMENT OF CONTRIBUTIONS. Contributions are due from the Company
on the tenth (10th) day of the benefit month, commencing with the month of
November 2001 and each and every month thereafter so long as this Agreement is
in force.

         15.07    COVERAGE.

                  A.       HOSPITAL AND MEDICAL BENEFITS. Coverage for newly
                           hired employees and any named dependents will begin
                           on the first (1st) day of the month following
                           completion of thirty (30) days of employment.
                           Previously covered employees shall be covered the
                           first (1st) day of the calendar month following their
                           return to work.

                  B.       DISABILITY BENEFITS. Newly hired employees shall be
                           eligible for sixty percent (60%) indemnity payment if
                           disabled after completing six (6) months of
                           employment.

                  C.       These provisions for newly hired employees shall not
                           apply in the case of those employees who have been
                           "previously covered" under the Fund. Such employees
                           and their dependents shall be eligible for all
                           benefits from the date of hire.

         15.08 ELECTION OF CATEGORY OF COVERAGE AND RIGHT TO CHANGE. Employees
shall elect a category of coverage no later than the first day of the calendar
month following the completion of thirty (30) days employment. This election may
be changed only as provided for in the Plan. Newly born children must be
enrolled within thirty-one (31) days of birth.

         15.09 REQUIREMENTS. The Company shall transmit to the Fund with each
contribution a contribution report on the form furnished by the Fund on which
the Company shall report the names, status, hire and termination dates as
applicable, as well as the total gross earnings of each eligible employee during
the wage month.


                                      -35-
<PAGE>

                  The Company further agrees to supply to the Fund such further
information as may from time to time be requested by it in connection with the
benefits provided by said Fund to said employees and to permit audits of its
books and records by the Fund for the sole purpose of determining compliance
with the terms and conditions of this Agreement.

         15.10 HOLD HARMLESS. The Company agrees solely to make the
contributions required by the terms of this Agreement. The Union and The United
Steelworkers of America Health and Welfare Fund agree to hold harmless and
indemnify the Company from any and all claims, grievances, lawsuits, actions at
law or inequity relating to the Plan except a claim that the Company has not
paid the contribution required by this Agreement.

                  The Company does not agree to be bound by, and expressly
disavows any obligations imposed upon the Company by, the provisions of any
Trust Agreement or other document pertaining to The United Steelworkers of
America Health and Welfare Fund to which the Company is not a signatory party.

         15.11 REINSTATEMENT OF COVERAGE. The Fund may, in its sole discretion,
elect to reinstate coverage either retroactively or prospectively or both once
the amounts owed to the Fund by the Company are paid in full. If coverage is
reinstated prospectively, there shall, nevertheless, be no coverage for
illnesses first manifested during the ten (10) day period following the date of
reinstatement.

         15.12 PART TIME EMPLOYEES. For the purpose of Fund coverage, a part
time employee is one who is hired to regularly work less than the number of
hours established as the regular work week in this Agreement, which definition
does not include regular full time employees who are hired to work a full work
week but who might be working short hours because of lack of work, sickness,
etc. Part time employees shall not receive Fund coverage nor shall the Company
pay a contribution for such employees. Nothing in this clause shall be construed
as an affirmation or negation of the Company's right to hire part time
employees.

         15.13 AUDIT RIGHTS. The Company shall have the right to audit The
United Steelworkers of America Health and Welfare Fund periodically.

         15.14 AVAILABILITY OF BENEFITS. In consideration of the Company's
aforesaid payment to said Fund as herein above provided, the Union warrants the
Board of Trustees of The United Steelworkers of America Health and Welfare Fund
will, beginning on the date of receipt by the Fund of the Company's first said
payment, and during such part of the life of this Agreement as the Company fully
complies with the terms of such Agreement in all respects, extend and make
available to Company's said employee the benefits for which employees are
eligible under the above-designated benefit plan. No benefits will be paid or
services furnished to any employee or employees for whom the Company has not
paid the required contribution to the Fund except as, and only to the extent
otherwise required by an applicable state disability benefit insurance law.


                                      -36-
<PAGE>

                                   ARTICLE XVI

                                  JURY SERVICE

                  [See Pay Plus Bonus Addendum] Any employee duly called to
perform his civic duty to serve on a jury panel shall be compensated by the
Company for the difference between the daily jury pay and average hourly
earnings as computed in Section 8.06 if an incentive worker or the hourly day
work rate for the classification if a day worker of the employee based on an
eight (8) hour work day. Any employee who is excused from serving shall not be
required to report to his job to complete a partial shift. In the event the
employee has been excused for a full day, he shall report to his job and
continue working until told to report again for jury duty.

                                  ARTICLE XVII

                                 BEREAVEMENT PAY

         17.01 DEFINITION. Bereavement pay will be granted up to a maximum of
three (3) days for time lost due to death in the immediate family. Immediate
family is defined as mother, mother-in-law, father, father-in-law, grandparents,
brother, half brother, sister, half sister, grandchildren, spouse, or child. No
pay shall be granted if an employee fails upon request to furnish the Company
with reasonable proof of death and relationship.

         17.02 PAYMENT. [See Pay Plus Bonus Addendum] The pay for such loss of
time from work will be for eight (8) hours, straight time at the employee's
previous quarter average hourly rate if an incentive employee and at the
classification rate of pay if a day worker.

                                  ARTICLE XVIII

                                 BULLETIN BOARDS

         18.01 BULLETIN BOARDS. The Union may put up bulletin boards at
locations specified by the Company for the following non-controversial Union
announcements:

                  A.       Notice of Union recreational or social affairs;

                  B.       Notice of Union nominations or elections and results
                           of such elections and nominations;

                  C.       Notice of Union appointment;

                  D.       Notice of Union meetings;

                  E.       Notices pertaining to the USWA Health and Welfare and
                           USWA Pension Programs.


                                      -37-
<PAGE>

         18.02 POSTING OF NOTICES. The Union agrees that all notices so posted
as above stated shall be signed by the Secretary or other authorized officer of
the Union and he alone shall have the power to post such notices on behalf of
the Union and further agrees that notices are to remain on the bulletin board
for a period of not more than two (2) weeks.

                  Before any notices are posted in accordance with the
foregoing, a copy of such notice shall be delivered to the Company Operations
Manager, or to the Labor Relations Specialist where there are such officials.
Any of the aforementioned representatives of the Company may remove from the
bulletin board any notice which does not conform to the requirements of this
Article.

                                   ARTICLE XIX

                                 MILITARY CLAUSE

         The Company agrees to comply with all applicable laws relating to
re-employment rights of employees called or volunteer for military duty.

                                   ARTICLE XX

                              EMPLOYEE BIRTHDAY PAY

                  Each employee who meets the requirements for holiday
eligibility will receive an additional eight (8) hours pay (computed as per
Section 10.09) during the week in which his birthday occurs, even though he may
be on vacation or absent due to illness or accident. Should the birthday fall on
a Saturday, Sunday, or holiday, the employee will nevertheless receive the
abovementioned eight (8) hours pay. In the event an employee desires to take a
day off from work on his birthday in lieu of eight (8) hours pay, he may do so
only if he gives five (5) working days prior notice to his supervisor. The above
will be administered so as to permit an employee to select a day off in the
event his birthday falls on a Saturday, Sunday, or holiday. Employees on layoff
status will not be eligible for birthday pay if such birthday falls later than
fifteen (15) calendar days following the layoff.

                  Employees who are eligible for birthday pay and elect to
receive pay in lieu of a day off by January 1 will receive a $100 birthday
check, exclusive of payroll deductions. If not elected by January 15, the
appropriate clauses of the contract will apply.

                                   ARTICLE XXI

                                  LEGAL COUNSEL

         Whenever the Union or the Company desires to have outside legal counsel
present at any meeting between the Union Bargaining Committee and the Company,
it shall notify the other party.


                                      -38-
<PAGE>

                                  ARTICLE XXII

                                GROUP OPERATIONS

         In group or team operations, employees will not split their earnings,
unless it is mutually agreed between them that they do so.

                                  ARTICLE XXIII

                    MECHANIC & MACHINIST APPRENTICE TRAINING
                     SCHEDULE AND PAY RATE PROGRESSION SCALE

                           Effective October 16, 2001

Hired at                            $15.15

After 30 days increased             $15.35                    if satisfactory

After 90 days increased             $15.50                    if satisfactory

After 6 months increased            $15.85                    if satisfactory

After 12 months increased           $16.00                    if satisfactory

After 18 months increased           $16.15                    if satisfactory

After 2 years increased             $16.45                    if satisfactory

After 30 months top of bracket      $17.10                    if satisfactory

                 Base rate for all current mechanics will be $16.75 plus the
general increase, effective October 16, 2001.

                  For the above training schedule, the determination of
qualifications shall be exclusively a right of Management. However, if the
bidder is qualified at the time he/she gets the job, he/she will not come under
the training schedule and will receive the top rate of the classification. The
expectation is that mechanics will be qualified in all key areas of the plant.

                  There will be additional areas of certification. These
certifications will be from a pre-approved source. The certifications/courses
will be the basis of those mentioned below, but not limited to those. The
Company and the Union will agree upon additional certifications/courses and
rates not mentioned, and the number of mechanics to be certified.


                                      -39-
<PAGE>

                  To be eligible for the agreed upon increases for certification
the employee must satisfy the following:

                  1.       All courses or tests must be pre-approved.

                  2.       All courses or tests will be taken on employee's own
                           time.

                  3.       Employee must certify with a minimum grade or
                           equivalent of "C," in accordance with the Company
                           policy.

                  4.       Tuition fees will be in accordance of the Company
                           policy.

                  The categories are and will contain the following:

                  1.       Electrical (Circuitry, Basic Electricity/Trouble
                           shooting and PLC)

                  2.       Welding (Tig/Mig and Acetylene)

                  3.       Additional skill/certifications will be agreed upon
                           by the Company and Union.

         Testing out for certification in lieu of coursework for any agreed upon
         prior mentioned skill would suffice.

         Pay Rate for Certification will be:

         1.  Electrical             $1.75 over the base rate
         2.  Welding                $ .75 over the base rate
         3.  To be agreed upon by the Company and the Union

                                  ARTICLE XXIV

                                    WORK WAIT

         24.01 WORK WAIT. [See Pay Plus Bonus Addendum] It is agreed that any
piecework employee who is required to wait more than ten (10) continuous minutes
and does not leave the immediate work area shall receive compensation at eighty
five percent (85%) of average hourly rate.

                  It is agreed that the Company shall have no liability
regarding the Work Wait and Reporting Pay provision of this agreement in the
event of a break down of electric power outside the plant, or if inside the
plant and not maintained by the Company, or in the event of a general plant
fire, flood, Act of God, act of public enemy, or because of conditions beyond
the control of the Company.

         24.02 ELECTRIC POWER FAILURE. [See Pay Plus Bonus Addendum] It is
                  agreed that, in the event of an electric power failure,
                  employees will stand by their work stations until instructed
                  by the Company to either go home or resume work. If the
                  Company, within one (1) hour after the moment of power
                  failure, instructs the employees to either go home or to
                  resume work, the employees


                                      -40-
<PAGE>

                  will be paid at their base rate for the time lost within this
                  one (1) hour. If the Company does not instruct any employee
                  within one (1) hour after the beginning of such power failure
                  to either go home or to resume work, he/she will be paid for
                  this lost time in accordance with Section 24.01 above if an
                  incentive worker, and at the regular day work rate of his/her
                  classification if a day worker, for all time lost from the end
                  of the first minute of power failure to the time he/she is
                  either instructed to go home or resume work.


                                   ARTICLE XXV

                               TEMPORARY EMPLOYEES

         25.01 TEMPORARY JOBS. Temporary jobs will only be posted in the event
of illness to a full time employee and if said employee is on an authorized sick
leave.

         25.02 TEMPORARIES. The Company may use a maximum of ten (10)
temporaries or part-time employees at one time for no more than sixty (60) days
at a time. These temporaries or part time employees would not be eligible for
any benefits and would not be eligible for any overtime work if the full time
employees are not working overtime. Hiring rate for part time employees or
temporaries would be the normal hiring rate. If after sixty (60) days the
position is still needed, the job will be posted for bidding.

                                  ARTICLE XXVI

                          EQUAL EMPLOYMENT OPPORTUNITY

                  Simmons Company provides equal employment opportunity to
qualified persons without regard to race, color, religion, national origin or
ancestry, age, sex (including pregnancy and any illness arising out of and
occurring during the course of pregnancy, childbirth, or related to medical
condition), disability, or veteran status except where religion, sex, national
origin, or age is a bona fide occupational qualification. Our policy relates to
all phases of employment, including recruitment, placement, promotion, training,
demotion, transfer, layoff, recall and termination, rates of pay, employee
benefits, and participation in all Simmons sponsored employee activities.

                  We are opposed to all forms of harassment including sexual,
racial, ethnic, or religious harassment. Unwelcome sexual advances, requests for
sexual favors, and other verbal or physical conduct of a sexual nature or verbal
or physical conduct directed at a person's race, color, religion, sex, national
origin, age, handicap, or veteran's status may constitute harassment. Claims of
harassment which come to our attention may result in discipline up to and
including discharge. At any time, if you believe that you have been harassed,
you must report the harassment to your

                                      -41-
<PAGE>

immediate Supervisor or your Human Resources Manager. A confidential
investigation will be conducted.

                                  ARTICLE XXVII

                                  MISCELLANEOUS

         A.       CAMERAS. Cameras will be used ONLY for appropriate security
                  measures.

         B.       Safety and Health Committee. The Company and the Union agree
                  to establish a joint safety and health committee consisting of
                  four (4) representatives from each side. One of the Union
                  representatives will be the Unit Chairperson. The Committee
                  will meet quarterly and will recommend establishment and
                  implementation of criteria for maintaining a safe and healthy
                  workplace. The Company will compensate the Union
                  representatives for up to one (1) hour at their average rate
                  of pay for attendance at the meetings.

                                 ARTICLE XXVIII

                                  SAVING CLAUSE

         28.01 SEPARABILITY. If any provision of this Agreement is invalid or
illegal in any state, then such provision shall be considered to be deleted in
its entirety or to be inoperative in said state in which it is illegal or
invalid and the remaining provisions of this Agreement will continue in full
force and effect.

         28.02 FEDERAL AND STATE LAWS. The parties recognize the need to
maintain compliance with all federal statutes and regulations and nothing in
this Agreement shall be construed to prevent the Company from taking actions
necessary to comply with federal law. Further, to the extent any provision of
this Agreement conflicts with a federal statute or regulation, the federal law
shall govern.

                                  ARTICLE XXIX

                          SEVERANCE AND PLANT CLOSINGS

                  In the event the Company decides to close this facility
presently organized by the United Steelworkers, sixty (60) day notice of such
event will be given to the District Director of the United Steelworkers of
America. Those employees affected by the plant closing shall continue to be
covered under their existing USWA Health and Welfare Fund benefits as outlined
in Article XV of the Collective Bargaining Agreement for an additional four (4)
months, and the Company shall be responsible for the payment of the
contributions for the four (4) month period of coverage.


                                      -42-
<PAGE>

                                   ARTICLE XXX

                       DURATION AND TERMINATION AGREEMENT

         30.01 EFFECTIVE DATES. This Agreement shall be in full force and effect
from October 16, 2001 until October 15, 2005.

         30.02 ENTIRE AGREEMENT. The parties agree that there shall be no
reopening of this AGREEMENT unless expressly provided in this AGREEMENT and that
this AGREEMENT constitutes the entire AGREEMENT between the parties on the
subjects of bargaining and at no time during the life of this AGREEMENT shall
either party have any obligation to negotiate or bargain with the other party
with respect to any points not covered by this AGREEMENT and as to matters
covered by this AGREEMENT only in the manner and to the extent herein provided.

         30.03 MODIFICATION OR TERMINATION. This AGREEMENT, when signed by the
officers of the COMPANY and the UNION, shall become effective as described above
for a period of four (4) years and shall continue to remain in full force and
effect from year to year thereafter, unless written notice is given by either
party hereto to the other on or before sixty (60) days prior to the annual
expiration date, requesting that the AGREEMENT be modified or terminated. In the
event of such notification, the parties hereto shall immediately confer and
negotiate with reference to a new or modified AGREEMENT. Negotiations for a new
contract shall commence not later than thirty (30) days from the date of the
written notice herein mentioned.

                                  ARTICLE XXXI

                               CONTRACT RE-OPENER

                  The Company will introduce a new incentive pay plan during the
term of this Agreement. The Plan is called "Pay Plus". Certain features of the
Plan remain undetermined as of October 15, 1997. Therefore, the parties agree
that during the term of this Agreement there will be a limited re-opener
regarding aspects of the Plan. The Company will notify the Union not less than
forty-five (45) days prior to the implementation date of the Pay Plus Plan at
the Atlanta facility. During this forty-five (45) days period, the Company and
Union will meet to discuss such Pay Plus matters as (but not limited to) base
rates, rates paid to successful bidders and employees affected by layoffs,
average rate computations, borrowed man rates, movement within pay ranges,
starting rates, wage ranges, pay rates for non work time such as vacations,
holidays, jury duty and bereavement, grieving new standards and revisions to
Article IX Standard Allowed Hour. The forty-five (45) day period may be extended
by mutual agreement.

                  Notwithstanding Article V, if agreement is not reached
regarding the matters to be discussed during the forty-five (45) days or
extension thereof, the parties are free to exercise their rights to engage in
activity in support of their respective positions. In the case of


                                      -43-
<PAGE>

the Union this shall include, but not be limited to, a strike or other legal
means in support of its position. In the case of the Company this shall include,
but not be limited to, implementation of the Plan, a lockout, and/or in the case
of a strike, the hiring of replacements. The right to strike shall not give rise
to a sympathy strike in support of employees at other Simmons plants where the
Pay Plus Plan is implemented or in the process of being implemented. Further,
the Union agrees to provide a ten (10) day written notice prior to the
commencement of a strike; and the Company agrees to provide a ten (10) day
written notice prior to the commencement of a lockout.

                  The parties agree that a Pay Plus Plan was implemented under
Article XXXI of the Labor Agreement with the term on October 16, 1997 until
October 15, 2001. The parties further recognize that a new but yet unnamed Pay
Plan is being designed and will not be completed prior to conclusion of
negotiations or the expiration of the current agreement. Therefore, the parties
will continue to abide by the provisions of Article XXXI Contract Re-Opener and
Atlanta Pay Plus Bonus Addendum August 31, 1998, language during the term of the
new or successor agreement and when a new Pay Plan is introduced the parties
will abide by the terms and conditions of Article XXXI in the same manner as
they did when the Pay Plus Plan was introduced.

                  Finally, nothing in this re-opener provision should be
construed as limiting the Company's rights under Article IX.



                                      -44-
<PAGE>


                  IN WITNESS WHEREOF, the parties hereunto set their hands and
seals as hereinbefore stated, this   day of    , 2001.

THE UNITED STEELWORKERS OF                  SIMMONS COMPANY
AMERICA, AFL-CIO, CLC

ON BEHALF OF ITS LOCAL UNION #2401

--------------------------------------------      ------------------------------
Leo W. Gerard                                     Ken Barton
International President                           Executive VP, Human Resources

--------------------------------------------      ------------------------------
James English, International                      Andy Cuppia
Secretary/Treasurer                               Divisional VP, Manufacturing

--------------------------------------------      ------------------------------
Richard H. Davis, International                   Kevin Calandra
Vice-President Administration                     Operations Manager

--------------------------------------------      ------------------------------
Leon Lynch, International                         Fredericka McKinney
Vice-President, Human Affairs                     Human Resources Manager

-------------------------------------------
Ernest Kinney, Staff Representative

-------------------------------------------
Homer Wilson, District 9, Director

-------------------------------------------
Dave Caldwell, Chairman of USWA Negotiating Committee

-------------------------------------------
Committee

-------------------------------------------
Committee

-------------------------------------------
Committee



                                      -45-
<PAGE>






                          [SEE PAY PLUS BONUS ADDENDUM]

                          SIMMONS COMPANY ATLANTA PLANT
                            CLASSIFICATION STRUCTURE
                           EFFECTIVE OCTOBER 16, 1997

                           APPENDIX I AND APPENDIX II
<TABLE>
<CAPTION>
SKILL             CLASSIFICATION
GROUP             DESIGNATION                       10/16/97          10/16/98         10/16/99           10/16/00
------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>               <C>              <C>               <C>
I.                Cutter                    DW       $ 9.97            $10.27            $10.57           $10.87
                  Slitter                   DW       $ 9.97            $10.27            $10.57           $10.87
                  Overcast Borders          DW       $10.55            $10.85            $11.15           $11.45
                           Incentive                 $ 8.93            $ 9.23            $ 9.53           $ 9.83

II.               Box Spring Sewing         INC      $ 8.79            $ 9.03            $ 9.39           $ 9.69
                  Flange Sewing             INC      $ 8.93            $ 9.23            $ 9.53           $ 9.83
                  Label Sewing              INC      $ 8.93            $ 9.23            $ 9.53           $ 9.83
                  Quilt Machine             INC      $ 8.91            $ 9.21            $ 9.51           $ 9.81
                  Bechik                    INC      $ 9.28            $ 9.58            $ 9.88           $10.18
                  Pillowtop Sewing          INC      $ 8.93            $ 9.23            $ 9.53           $ 9.83
                  Border Quilt Machine      DW       $10.55            $10.85            $11.15           $11.45
                           Incentive                 $ 8.93            $ 9.23            $ 9.53           $ 9.83

III.              Closer                    INC      $ 9.43            $ 9.73            $10.03           $10.33
                  Hog Ring                  INC      $ 9.47            $ 9.77            $10.07           $10.37

IV.               Wood Frame                INC      $ 9.38            $ 9.68            $ 9.98           $10.28
                  Top Off                   INC      $ 9.09            $ 9.39            $ 9.69           $ 9.99
                  Pre-Load                  INC      $ 9.08            $ 9.38            $ 9.68           $ 9.98
                  Upholstery                INC      $ 9.72            $10.02            $10.32           $10.62

V.                Inspection                DW       $ 9.28            $ 9.58            $ 9.88           $10.18
                  Material Handler          DW       $ 9.08            $ 9.38            $ 9.68           $ 9.98
                  Repair                    DW       $ 9.30            $ 9.60            $ 9.90           $10.20
                  Shipping                  DW       $10.10            $10.40            $10.70           $11.00
                  Receiving                 DW       $ 9.50            $ 9.80            $10.10           $10.40
                  Sweeper                   DW       $ 9.05            $ 9.35            $ 9.65           $ 9.95
                  Packing/Inspection        DW       $10.50            $10.80            $11.10           $11.40
</TABLE>


                                      -46-
<PAGE>
<TABLE>
<CAPTION>
<S>                                                  <C>               <C>              <C>               <C>
                  Lead Person               DW       $ 9.33            $ 9.63           $ 9.93            $10.23

VI.               Mechanic                  DW       $13.90            $14.20            $14.50           $14.80
                  Lead Mechanic             DW       $14.10            $14.40            $14.70           $15.00

VII.              Coil Machine Oprt         INC      $ 8.94            $ 9.24            $ 9.54           $ 9.84
                  Hot Melt                  INC      $ 9.09            $ 9.39            $ 9.69           $ 9.99
</TABLE>

                  The following classifications will be eliminated via attrition
(bid off, retirement, quit, etc.). The incumbents will not be replaced in these
specific classifications. This will serve to eliminate memorandums of agreement
which created these "red circle" rates:

Finish & Inspect Beautyrest Constructions     Harry Stokley, Sr.         $12.10
Repair Mattress Finish                        Ed Casselberry             $12.10
Lead Person Receiving                         Roy Cody                   $10.90
Bailer/Sweeper/Machine Operator               Steve Jones                $ 9.50
Lead Person Pre-Load                          Donald Brooks              $10.10

                                     ATLANTA

                                  APPENDIX III

                      ARBITRATORS FOR EXPEDITED ARBITRATION

                               GENERAL ARBITRATORS

                                 Richard Adelman
                                   Jack Clarke
                                  Donald Crane
                                 William Heekin
                                  I. B. Helburn
                               Diane Dunham Massey
                                 Elvis Stephens
                                Michael Rappaport
                                  David Vaughn

                             TIME STUDY ARBITRATORS

                                Herman Birnbrauer
                                  John Lillich


                                      -47-
<PAGE>

                                Louis Imundo, Jr.
                               Lawrence Mann, Jr.
                                 James Reynolds


                                      -48-
<PAGE>


                                   APPENDIX IV

LOCAL 2401

Atlanta Plant

November 1, 2001

MEMORANDUM OF AGREEMENT

The company will give those employees currently enrolled in Plan E the
opportunity to decide on medical coverage changes that will be effective
November 1, 2001. These employees will have until November 15, 2001 to make a
decision.

----------------------------------          -----------------------------------
Simmons Company                             USWA



-------------------------------------------------------------------------------
Date



                                      -49-
<PAGE>


                                   APPENDIX I

                                     ATLANTA
                                 PAY PLUS BONUS
                          Classification Rate Schedule
                                October 16, 2001
<TABLE>
<CAPTION>

                                           ENTRY                         MID                          MAX
                                           -----                         ---                          ---
<S>                                     <C>                         <C>                          <C>
Level 1                                    $9.50                       $12.25                       $15.00
Level 2                                    $9.00                       $11.00                       $13.00
Level 3                          ----------------------------As defined by position -------------------------------
Level 4 (trainee)                          $8.00                        $8.50                        $9.00
MI**                              -----------------------As defined by Article XXIII ------------------------------
</TABLE>


* Any employee who is classified (or bids) into Level 3 will be paid at the rate
of the classification as follows:
<TABLE>
<CAPTION>

DESIGNATION                    10/16/2001              10/16/2002             10/16/2003             10/16/2004
-----------                    ----------              ----------             ----------             ----------
<S>                              <C>                     <C>                    <C>                    <C>
Inspection                       $10.53                  $10.83                 $11.13                 $11.43
Material Handler                 $10.33                  $10.63                 $10.93                 $11.23
Repair                           $10.55                  $10.85                 $11.15                 $11.45
Shipping                         $11.35                  $11.65                 $11.95                 $12.25
Receiving                        $10.75                  $11.05                 $11.35                 $11.65
Sweeper                          $10.30                  $10.60                 $10.90                 $11.20
Packer/Inspection                $11.75                  $12.05                 $12.35                 $12.65
Lead Person                      $10.58                  $10.88                 $11.18                 $11.48
Cutter                           $11.22                  $11.52                 $11.82                 $12.12
Slitter                          $11.22                  $11.52                 $11.82                 $12.12
</TABLE>

** MI - See Article XXIII

Red Circle - as defined by page 45 of contract.

PAY FOR ADDITIONAL SKILLS - MULTI SKILLED EMPLOYEE

         Any one employee can have up to a maximum of three (3) additional
         skills. Each additional skill will receive a 25 cents premium applied
         to their current base rate and shall remain a permanent part of their
         base rate as long as the employee is deemed a "Multi Skilled Employee."
         The Company will allow the maximum of ten individuals that may be
         eligible for this additional benefit.


                                      -50-
<PAGE>

         A bid shall be posted for "Multi-skilled Employee" for a particular
         job. Bidding procedures will be followed as defined in the Atlanta
         contract.

         All bidders shall be required to establish competency and the final
         selection of successful bidder(s) will be based upon seniority.
         Competency will be determined by the Company and may require the
         employee to physically perform the job in question for a period of time
         not to exceed two (2) weeks.



                                      -51-
<PAGE>

                      MEMORANDUM OF UNDERSTANDING REGARDING
             THE SUBSTITUTION OF THE SIMMONS MANUFACTURING CO., LLC,
             FOR SIMMONS COMPANY IN COLLECTIVE BARGAINING AGREEMENT

         WHEREAS, the United Steelworkers of America, AFL-CIO, CLC, and its
Local Union No. 2401, and Simmons Company have entered into a collectively
bargained Labor Agreement commencing October 15, 2001 through October 15, 2005,
for certain employees at its plant located at Atlanta, Georgia;

         WHEREAS, effective December 31, 2001, the Simmons Company employees
represented by Local No. 2401 will, for corporate tax purposes, become employees
of The Simmons Manufacturing Co., LLC, and;

         WHEREAS, because said represented employees will, on December 31, 2001,
become employees of The Simmons Manufacturing Co., LLC, The Simmons
Manufacturing Co., LLC shall be substituted for Simmons Company in said Labor
Agreement, and shall therefore, be bound by the terms and conditions of said
Labor Agreement.

         NOW THEREFORE BE IT RESOLVED; that effective December 31, 2001, The
Simmons Manufacturing Co., LLC shall be substituted for Simmons Company in the
Labor Agreement, and The Simmons Manufacturing Co., LLC shall recognize and
assume the legal obligations of the Labor Agreement, and;

         FURTHER RESOLVED; that effective December 31, 2001, on behalf of
Simmons Company, The Simmons Manufacturing Co., LLC, and the United Steelworkers
of America, AFL-CIO, CLC, and its Local Union No. 2401, the undersigned
acknowledge their agreement as to the binding nature of their collectively
bargained Labor Agreement on The Simmons Manufacturing Co., LLC.


-------------------------------------------------
Daniel P. Murphy
Counsel for Simmons Company and The Simmons Manufacturing Co., LLC

Dated this _____ day of February 2001.


-------------------------------------------------
David Caldwell
The United Steelworkers of America, AFL-CIO, CLC, and its Local Union No. 2401


                                      -1-


<PAGE>


Dated this _____ day of February 2001.

                                      -2-