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                                                                    EXHIBIT 10.9

                             SIMMONS HOLDINGS, INC.
                         MANAGEMENT STOCK INCENTIVE PLAN

                  1. ESTABLISHMENT AND PURPOSE OF THE PLAN. This Management
Stock Incentive Plan (the Plan") is established by Simmons Holdings, Inc., a
Delaware corporation ("Issuer"), as of March 22, 1996. The Plan is designed to
enable Issuer to attract, retain, reward and motivate members of the management
and certain other officers, key employees, non-employee directors and service
providers of Issuer, Simmons Company, a Delaware corporation ("Employer") and
its subsidiaries, by providing for or increasing their proprietary interest in
Issuer. The Plan provides for the grant of options ("Options") that qualify as
incentive stock options ("Incentive Stock Options") under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), as well as Options that
do not so qualify ("Non-Qualified Options"), for the grant of stock appreciation
rights ("Stock Appreciation Rights"), for the grant of the right to receive
stock at the end of a specified deferral period ("Deferred Stock"), and for the
sale or grant of restricted stock ("Restricted Stock").

                  2. STOCK SUBJECT TO PLAN. The maximum number of shares of
stock that may be subject to Options or Stock Appreciation Rights granted
hereunder and the number of shares of stock that may be granted or sold as
Deferred Stock or Restricted Stock hereunder shall not in the aggregate exceed
5,488,070 shares of the Class C Stock, $.01 par value (the "Shares"), of Issuer,
subject to adjustment under Section 14 hereof. The Shares that may be subject to
Options, Stock Appreciation Rights, or Deferred Stock granted and Restricted
Stock sold or granted under the Plan may be authorized and unissued Shares or
Shares reacquired by Issuer and held as treasury stock.

                  Shares that are subject to the unexercised portions of any
Options or Stock Appreciation Rights that expire, terminate or are canceled,
Shares of Deferred Stock that are not delivered, Shares of Restricted Stock that
are reacquired by Issuer pursuant to the restrictions thereon, and Shares
withheld or surrendered in payment of any exercise price of Options or taxes
relating to Options, Stock Appreciation Rights, Deferred Stock or Restricted
Stock, shall again be available for the grant of Options, Stock Appreciation
Rights or Deferred Stock and the sale or grant of Restricted Stock under the
Plan. If a Stock Right is exercised, any Option or portion thereof that is
surrendered in connection with such exercise shall terminate and the and the
Shares theretofore subject to the Option or portion thereof shall not be
available for further use under the Plan.

                  In Addition to the grant of Options, Stock Appreciation
Rights, Deferred Stock and Restricted Stock to Participants (as hereinafter
defined), Issuer may also issue Restricted Stock to non-Participants to be held
for the benefit of the Participants.



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                  3. SHARES SUBJECT TO CERTIFICATE OF DESIGNATION. All Shares
issuable under Options, Stock Appreciation Rights or Deferred Stock and all
Shares of Restricted Stock sold or granted pursuant to this Plan shall be
subject to the terms and restrictions contained in the Certificate of
Designation of Issuer. A copy of the Certificate of Designation shall be
delivered or otherwise made available to the recipient of an Option, Stock
Appreciation Right, Deferred Stock or Restricted Stock at the time of grant or
issuance.

                  4. ADMINISTRATION. The Plan shall be administered by a
committee (the "Committee") appointed by the Board of Directors (the "Board") of
Issuer. If no persons are designated by the Board to serve on the Committee, the
Plan shall be administered by the Board and all references herein to the
Committee shall refer to the Board. The Board shall have the discretion to add,
remove or replace members of the Committee, and shall have the sole authority to
fill vacancies on the Committee.

                  All actions of the Committee shall be authorized by a majority
vote thereof at a duly called meeting. The Committee shall have the sole
authority, in its absolute discretion, to adopt, amend, and rescind such rules
and regulations as, in its opinion, may be advisable in the administration of
the Plan, to construe and interpret the Plan, the rules and regulations, and the
agreements and other instruments evidencing Options, Stock Appreciation Rights
and Deferred Stock granted and Restricted Stock sold or granted under the Plan
and to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations, and interpretations
of the Committee shall be final and conclusive upon the Eligible Participants,
as hereinafter defined. Notwithstanding the foregoing, any dispute arising under
any Agreement (as defined below) shall be resolved pursuant to the dispute 
resolution mechanism set forth in such Agreement.

                  Subject to the express provisions of the Plan, the Committee
shall determine the number of Shares subject to grants or sales and the terms
thereof, including the provisions relating to the exercisability of Options and
Stock Appreciation Rights, lapse and nonlapse restrictions upon the Shares
obtained or obtainable under the Plan and the termination and/or forfeiture of
Options, Stock Appreciation Rights, Deferred Stock and Restricted Stock under
the Plan. The terms upon which Options, Stock Appreciation Rights and Deferred
Stock are granted and Restricted Stock is sold or granted shall be evidenced by
a written agreement executed by Issuer and the Participant to whom such Options,
Stock Appreciation Rights, Deferred Stock or Restricted Stock are sold or
granted (the "Agreement").

                  5. ELIGIBILITY. Persons who shall be eligible for grants of
Options, Stock Appreciation Rights, or Deferred Stock or sales or grants of
Restricted Stock hereunder ("Eligible Participants") shall be those employees,
non-employee directors or service providers of Issuer, Employer or a subsidiary
of Employer who are members of a select group of management or other key persons
that the Committee may from time to time designate to participate under the Plan
("Participants") through grants of Non-Qualified Options, Incentive Stock
Options, Stock Appreciation Rights, Deferred Stock, and/or through sales or
grants of Restricted Stock.

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                  6. TERMS AND CONDITIONS OF OPTIONS. No Incentive Stock Option
shall be granted for a term of more than ten years or to a Participant who is
not an employee, except that if such Incentive Stock Option is granted to a
Participant who on the date of grant is treated under Section 424(d) of the Code
as owning stock (not including stock purchasable under outstanding options)
possessing more than ten percent of the total combined voting power of all
classes of Issuer's stock, the term shall not be more than five years. No
Non-Qualified Option shall be granted for a term of more than ten years and
thirty days. Options may, in the discretion of the Committee, be granted with
associated Stock Appreciation Rights or be amended so as to provide for
associated Stock Appreciation Rights. The Agreement may contain such other
terms, provisions, and conditions as may be determined by the Committee as long
as such terms, conditions and provisions are not inconsistent with the Plan. The
Committee shall designate as such those Options intended to be eligible to
qualify and be treated as Incentive Stock Options and, correspondingly, those
Options not intended to be eligible to qualify and be treated as Incentive Stock
Options.

                  7. EXERCISE PRICE OF OPTIONS. The exercise price for each
Non-Qualified Option granted hereunder shall be set forth in the Agreement. For
so long as required under Section 422 of the Code and the regulations
promulgated thereunder (or any successor statute or rules), the exercise price
of any Option intended to be eligible to qualify and be treated as an Incentive
Stock Option shall not be less than the fair market value of the Shares on the
date such Incentive Stock Option is granted, except that if such Incentive Stock
Option is granted to a Participant who on the date of grant is treated under
Section 424(d) of the Code as owning stock (not including stock purchasable
under outstanding options) possessing more than ten percent of the total
combined voting power of all classes of Issuer's stock, the exercise price shall
not be less than one hundred ten percent (110%) of the fair market value of the
Shares on the date such Incentive Stock Option is granted.

                  For all Options granted within six months of the date of
adoption of the Plan, the fair market value of the Shares subject to the Option
shall be $2.66. Thereafter, the fair market value of Shares for the purposes of
this Plan shall be determined by the Board, whose valuation shall be binding
upon each Optionee.

                  Payment for Shares purchased upon exercise of any Option
granted hereunder shall be in cash at the time of exercise, except that, if
either the Agreement so provides or the Committee so permits, and if Issuer is
not then prohibited from doing so, such payment may be made in whole or in part
with shares of stock of the same class as the stock then subject to the Option.
The Committee also may on an individual basis permit payment or agree to permit
payment by such other alternative means as may be lawful, including by delivery
of an executed exercise notice together with irrevocable instructions to a
broker promptly to deliver to Issuer the amount of sale or loan proceeds
required to pay the exercise price.

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                  8. NON-TRANSFERABILITY. Unless provided otherwise in the
Agreement, any Option granted under this Plan shall by its terms be
nontransferable by the Participant other than by will or the laws of descent and
distribution (in which case such descendant or beneficiary shall be subject to
all terms of the Plan applicable to Participants) and is exercisable during the
Participant's lifetime only by the Participant or by the Participant's guardian
or legal representative.

                  9. INCENTIVE STOCK OPTIONS. The provisions of the Plan are
intended to satisfy the requirements set forth in Section 422 of the Code and
the regulations promulgated thereunder (including the aggregate fair market
value limits set forth in Section 422(d) of the Code) with respect to Incentive
Stock Options granted under the Plan. For so long as required under Section 422
of the Code and the regulations promulgated thereunder (or any successor statute
or rules), during the term of the Plan, the aggregate fair market value of the
Shares with respect to which Incentive Stock Options are first exercisable by an
Eligible Participant who is an employee during any calendar year shall not
exceed $100,000. For the purpose of this Section 9, the fair market value of the
Shares shall be determined at the time the Incentive Stock Option is granted.

                  10. STOCK APPRECIATION RIGHTS. The Committee may, under such
terms and conditions as it deems appropriate, grant to any Eligible Participant
selected by the Committee Stock Appreciation Rights, which may or may not be
associated with Options. Upon exercise of a Stock Appreciation Right, the
Participant shall be entitled to receive payment of an amount equal to the
excess of the fair market value, as defined by the Committee, of the underlying
Shares on the date of exercise over the Stock Appreciation Right's exercise
price. Such payment may be made in additional Shares valued at their fair market
value on the date of exercise or in cash, or partly in Shares and partly in
cash, as the Committee may designate. The Committee may require that any Stock
Appreciation Right shall be subject to the condition that the Committee may at
any time in its absolute discretion not allow the exercise of such Stock
Appreciation Right and that the Option, if any, with which the Stock
Appreciation Right is associated be canceled upon exercise of the Stock
Appreciation Right. The Committee may further impose such conditions on the
exercise of Stock Appreciation Rights as may be necessary or desirable to comply
with Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").

                  11. DEFERRED STOCK. The Committee may grant Deferred Stock
under the Plan (either independently or in connection with the exercise of
Options or Stock Appreciation Rights under the Plan) to Eligible Participants
selected by the Committee. The Committee shall in each case determine the number
of Shares of Deferred Stock to be granted and the terms and duration of the
deferral period to be imposed upon those Shares.

                  12. RESTRICTED STOCK. The Committee may sell or grant
Restricted Stock under the Plan (either independently or in connection with the
exercise of Options or Stock Appreciation Rights under the Plan) to Eligible
Participants selected by the Committee. The Committee shall in each case
determine the number of Shares of Restricted Stock to be sold or granted, the
price

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at which such Shares are sold, if applicable, and the terms and duration of the
restrictions to be imposed upon those Shares.

                  13. INVESTMENT REPRESENTATION. Each Agreement may contain an
agreement that, upon demand by the Committee for such a representation, the
Optionee shall deliver to the Committee at the time of any exercise of an Option
a written representation that the Shares to be acquired upon such exercise are
to be acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such representation prior to
the delivery of any Shares issued upon exercise of an Option and prior to the
expiration of the Option period shall be a condition precedent to the right of
the Optionee or such other person to purchase any Shares.

                  14. ADJUSTMENTS. In the event of any one or more
reorganizations, recapitalizations, stock splits, reverse stock splits, stock
dividends, or similar events, an appropriate adjustment shall be made in the
number, exercise or sale price and/or type of shares or securities for which
Options, Stock Appreciation Rights or Deferred Stock may thereafter be granted
and Restricted Stock may thereafter be sold or granted under the Plan. The
Committee also shall designate the appropriate changes that shall be made in
Options, Stock Appreciation Rights or Deferred Stock, or rights to purchase
Restricted Stock under the Plan, so as to preserve the value of any such
Options, Stock Appreciation Rights, Deferred Stock or Restricted Stock. The
Committee may do so either at the time the Option, Stock Appreciation Right or
Deferred Stock is granted or Restricted Stock offered or at the time of the
event causing the adjustments. Any such adjustment in outstanding Options or
Stock Appreciation Rights shall be made without changing the aggregate exercise
price applicable to the unexercised portions of such Options or Stock
Appreciation Rights. Any such adjustments in outstanding rights to purchase
Restricted Stock shall be made without changing the aggregate purchase price of
such Restricted Stock.

                  15. DURATION OF PLAN. Neither Options, Stock Appreciation
Rights, nor Deferred Stock may be granted, and Restricted Stock may not be sold
or granted, under the Plan after March 22, 2006.

                  16. AMENDMENT AND TERMINATION OF THE PLAN. The Board may at
any time amend, suspend or terminate the Plan. The Committee may amend the Plan
or any Agreement issued hereunder to the extent necessary for any Option, Stock
Appreciation Right or Deferred Stock granted or Restricted Stock sold or granted
under the Plan to comply with applicable tax or securities laws. If Issuer shall
become a reporting company under the Exchange Act and if the Board determines
that the approval of the stockholders of Issuer is advisable and necessary for
compliance with Exchange Act Rule 16b-3 or Section 162(m) of the Code, or any
successor or similar rule or regulation, no such action of the Board or the
Committee shall be permitted unless taken with or ratified by such approval.

                  No Option, Stock Appreciation Right or Deferred Stock may be
granted or Restricted Stock sold or granted during any suspension of the Plan or
after the termination of the Plan. No 

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amendment, suspension or termination of the Plan or of any Agreement issued
hereunder shall, without the consent of the affected holder of such Option,
Stock Appreciation Right, Deferred Stock or Restricted Stock, alter or impair
any fights or obligations in and Option, Stock Appreciation Right, Deferred
Stock or Restricted Stock theretofore granted or sold to such holder under the
Plan.

                  17. NATURE OF PLAN. This Plan is intended to qualify as a
compensatory benefit plan within the meaning of Rule 701 under the Securities
Act of 1933. This Plan is intended to constitute an unfunded arrangement for a
select group of management or other key persons.

                  18. CANCELLATION OF OPTIONS. Any Option granted under the Plan
may be canceled at any time with the consent of the holder and a new Option may
be granted to such holder in lieu thereof.

                  19. WITHHOLDING TAXES. Whenever Shares are to be issued with
respect to the exercise of Options or amounts are to be paid or income earned
with respect to Stock Appreciation Rights, Deferred Stock or Restricted Stock
under the Plan, the Committee in its discretion may require the Participant to
remit to Issuer, prior to the delivery of any certificate or certificates for
such Shares or the payment of any such amounts, all or any part of the amount
determined in the Committee's discretion to be sufficient to satisfy federal,
state and local withholding tax obligations (the "Withholding Obligation") that
Issuer or its counsel determines may arise with respect to such exercise,
issuance or payment. Pursuant to a procedure established by the Committee or as
set forth in the Agreement, the Participant may (i) request Issuer to withhold
delivery of a sufficient number of Shares or a sufficient amount of the
Participant's compensation, or (ii) deliver a sufficient number of previously
issued Shares, to satisfy the withholding Obligation.

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