Document:

<PAGE>

                                                                   EXHIBIT 10.25

                          MATTRESS HOLDING CORPORATION
                        MATTRESS DISCOUNTERS CORPORATION

                             EMPLOYMENT AGREEMENT
                             --------------------

     THIS AGREEMENT is made as of December 6, 1999, by and among Mattress
Discounters Corporation, a Delaware corporation (the "Company"), Mattress
                                                      -------
Holding Corporation, a Virginia corporation ("Holdings"), and Stephen A. Walker
                                              --------
("Executive").
  ---------

     In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     1.  Employment. The Holdings and the Company agree to employ Executive, and
         ----------
Executive hereby accepts employment with Holdings and the Company, upon the
terms and conditions set forth in this Agreement for the period beginning on the
date hereof and ending as provided in Section 5 hereof (the "Employment
                                                             ----------
Period").
------

     2.  Position and Duties.
         -------------------

     (a) During the Employment Period, Executive shall serve as the Chief
Executive Officer of Holdings and of the Company and shall have the normal
duties, responsibilities and authority of the Chief Executive Officer, subject
to the general supervisory power of Holdings' board of directors (the "Board")
                                                                       -----
under applicable Corporate law.

     (b) During the Employment Period, Executive shall report to the Board and
shall devote his best efforts and his full business time and attention (except
for permitted vacation periods and reasonable periods of illness or other
incapacity other than Disability) to the business and affairs of Holdings, the
Company and the Subsidiaries; provided, however, that Executive may spend an
average of one to two days per month to serve as a member of the board of
directors of [    ]. Executive shall perform his duties and responsibilities to
Holdings, the Company and the Subsidiaries hereunder to the best of his
abilities in a diligent, trustworthy, businesslike and efficient manner.

     (c) For purposes of this Agreement, "Subsidiaries" shall mean any
                                          ------------
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by Holdings or the
Company, directly or through one or more Subsidiaries. For purposes hereof,

                                      -1-
<PAGE>

Holdings or the Company shall be deemed to have a majority ownership interest in
a partnership, limited liability company (without voting securities),
association or other business entity if Holdings or the Company, directly or
through one or more Subsidiaries, shall be allocated a majority of partnership,
limited liability company, association or other business entity gains or losses
or shall be or control the managing director or general partner of such
partnership, limited liability company, association or other business entity.
For purposes of this Agreement, "Disability" means the inability, due to
                                 ----------
illness, accident, injury, physical or mental incapacity or other disability, of
the Executive to carry out effectively his duties and obligations to Holdings or
the Company or to participate effectively and actively in the management of
Holdings, the Company or a Subsidiary for a period or periods aggregating at
least 90 days (whether or not consecutive) during any twelve-month period, as
determined in the reasonable judgment of the Board.

          3.    Compensation and Benefits.
                -------------------------

          (a)   During the Employment Period, Executive's base salary shall be
$300,000 per annum or such higher rate as the Board may designate from time to
time (the "Base Salary"), which salary shall be payable by the Company in
           -----------
regular installments in accordance with the Company's general payroll practices.
In addition, during the Employment Period, Executive shall be entitled to
participate in applicable Company employee compensatory and benefit programs for
which senior executive employees of the Company are generally eligible.

          (b)   During the Employment Period, the Company shall reimburse
Executive for all reasonable expenses incurred by him in the course of
performing his duties and responsibilities under this Agreement which are
consistent with the Company's policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to the Company's
requirements with respect to reporting and documentation of such expenses.

          (c)   In addition to the Base Salary, the Board will award (and the
Company will pay) a bonus to Executive of up to 67% of the Base Salary following
the end of each fiscal year during the Employment Period based upon Executive's
performance and Holdings' consolidated operating results during such year, with
certain financial targets to be mutually agreed upon by Holdings and Executive.

          (d)   The Company will provide Executive with the following amounts
(the "Relocation Payments") to reimburse Executive for his relocation expenses
      -------------------
(i) the cost of no more than two trips to the Washington, D.C./Baltimore, MD
area for Executive and his spouse for the purpose of searching for a house (such
cost to include travel, lodging and automobile), (ii) an amount equal to the
real estate broker's fee Executive actually pays in connection with the sale of
his Marietta, GA home (such amount not to exceed 6% of the sale price of such
home), (iii) up to $30,000 for moving expenses which Executive actually incurs
and for which Executive provides the Company with itemized receipts, and (iv) a
miscellaneous payment of $10,000. The Company will pay Executive the Relocation
Payments referenced in subsection (i) above at the time Executive submits such
expenses for reimbursement and in subsections (ii) through (iv) above within two
business days after Executive actually relocates to the Washington,
D.C./Baltimore, MD area. Until

                                      -2-

<PAGE>

the earlier of such relocation and 120 days from the date of this Agreement, the
Company will (i) reimburse Executive for travel expenses and coach airline
tickets between his Marietta, GA home and Mattress Discounters Corporation's
executive offices for one round trip per week (Executive will attempt to obtain
the most economical fares available) and (ii) provide Executive with an
automobile and temporary furnished lodging in the Washington, D.C./Baltimore, MD
area. The Company shall pay Executive an additional amount equal to the marginal
increase in Executive's income taxes which results from the payments referred to
in this Section 3(d), including the payment referred to in this sentence.

          (e)   Holdings will grant to Executive options pursuant to an option
agreement dated the date of this Agreement in the form attached hereto as
Exhibit B.

          (f)   All amounts payable to Executive as compensation hereunder shall
be subject to customary withholding by the Company.

          4.    Board Membership. With respect to all regular elections of
                ----------------
directors during the Employment Period, Holdings shall nominate, and use its
reasonable efforts to cause the election of, Executive to serve as a member of
the Board. Upon the termination of the Employment Period, Executive shall resign
as a director of Holdings and its Subsidiaries, as the case may be.

          5.    Term.
                ----

          (a)   The initial Employment Period shall end on December 6, 2000 and
will thereafter be automatically extended for consecutive 12 month periods
unless notice of termination is delivered by either party to the other at least
90 days prior to the end of such period; provided that (i) the Employment Period
shall terminate prior to such date immediately upon Executive's resignation,
death or Disability and (ii) the Employment Period may be terminated by Holdings
at any time prior to such date for Cause (as defined below) or without Cause.
Except as otherwise provided herein, any termination of the Employment Period by
Holdings shall be effective as specified in a written notice from Holdings to
Executive.

          (b)   If the Employment Period is terminated by Holdings or its
successors in interest without Cause, Executive shall be entitled to continue to
receive from the Company (i) his Base Salary payable in regular installments for
a period of 12 months from the date of termination (the "Severance Period"), and
                                                         ----------------
(ii) for the duration of the Severance Period or until such time as Executive
obtains health benefits from another employer, whichever comes first, the health
benefits to which he was entitled at the time of termination, and in either
case, if and only if Executive has executed and delivered to Holdings a General
Release in the form of Exhibit A attached hereto and only so long as Executive
has not breached the provisions of Sections 6, 7 and 8 hereof. The amounts
payable pursuant to Section 5(b)(i) may be payable, at the Company's discretion,
in one lump sum payment within 30 days following termination of the Employment
Period.

                                      -3-

<PAGE>

          (c)  If the Employment Period is terminated by Holdings for Cause or
is terminated pursuant to clause (a)(i) above or expires and is not renewed
hereunder, Executive shall only be entitled to receive his Base Salary through
the date of termination or expiration.

          (d)  Except as otherwise expressly provided herein, all of Executive's
rights to salary, bonuses, fringe benefits and other compensation hereunder
which accrue or become payable after the termination or expiration of the
Employment Period shall cease upon such termination or expiration. Holdings and
the Company may offset any amounts Executive owes it or its Subsidiaries against
any amounts it owes Executive hereunder.

          (e)  For purposes of this Agreement, "Cause" shall mean (i) the
                                                -----
commission of a felony or other crime involving moral turpitude or the
commission of any other act or omission involving dishonesty, disloyalty or
fraud with respect to Holdings, the Company or any Subsidiary or any of their
customers or suppliers, (ii) chronic drug or alcohol abuse or other repeated
conduct causing Holdings, the Company or any Subsidiary substantial public
disgrace or disrepute or economic harm, (iii) substantial and repeated failure
to perform duties as reasonably directed by the Board, which is not cured,
if curable, to the Board's reasonable satisfaction in all material respects
within thirty (30) days after the Board or the designee thereof gives written
notice thereof to Executive or (iv) any other material breach of this Agreement
which is not cured, if curable, to the Board's reasonable satisfaction within 15
days after written notice thereof to Executive (provided, that a breach
of Sections 6, 7 or 8 shall be material and the applicable cure period shall be
3 days).

          6.   Confidential Information. Executive acknowledges that the
               ------------------------
information, observations and data (including trade secrets) obtained by him
while employed by Holdings, the Company and the Subsidiaries concerning the
business or affairs of Holdings, the Company or any Subsidiary ("Confidential
                                                                 ------------
Information") are the property of Holdings, the Company or such Subsidiary.
-----------
Therefore, Executive agrees that he shall not disclose to any unauthorized
person or use for his own purposes any Confidential Information without the
prior written consent of the Board, unless and to the extent that the
Confidential Information becomes generally known to and available for use by the
public other than as a result of Executive's acts or omissions. Executive shall
deliver to Holdings at the termination or expiration of the Employment Period,
or at any other time Holdings may request, all memoranda, notes, plans,
records, reports, computer tapes, printouts and software and other documents and
data (and copies thereof) embodying or relating to the Confidential Information,
Work Product (as defined below) or the business of Holdings, the Company or any
Subsidiaries which he may then possess or have under his control.

          7.   Inventions and Patents.  Executive acknowledges that all
               ----------------------
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to Holdings', the Company's or any Subsidiary's actual
or anticipated business, research and development or existing or future products
or services and which are conceived, developed or made by Executive while
employed by Holdings, the Company or any Subsidiary ("Work Product") belong to
                                                      ------------
Holdings, the Company or such Subsidiary. Executive shall promptly disclose such
Work Product to the Board and, at the Company's expense, perform all actions
reasonably requested by the Board (whether during or after

                                     -4-

<PAGE>

the Employment Period) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments).

          8.   Non-Compete, Non-Solicitation.
               -----------------------------

          (a)  In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment
with Holdings, the Company and the Subsidiaries he shall become familiar, and he
has become familiar, with Holdings and the Company's trade secrets and with
other Confidential Information and that his services have been and shall be of
special, unique and extraordinary value to Holdings, the Company and the
Subsidiaries. Therefore, Executive agrees that, during the Employment Period and
for 18 months thereafter (the "Noncompete Period"), he shall not directly or
                               -----------------
indirectly own any interest in, operate, manage, control, participate in,
consult with, advise, render services for, or in any manner engage in any
business (including by himself or in association with any person, firm,
corporate or other business organization or through any other entity) in
competition with, or potential competition with, the businesses of Holdings, the
Company or the Subsidiaries as such businesses exist or are in process on the
date of the termination or expiration of the Employment Period, within the
United States. Nothing herein shall prohibit Executive from being a passive
owner of not more than 2% of the outstanding stock of any class of a corporation
which is publicly traded, so long as Executive has no active participation in
the business of such corporation.

          (b)  During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of Holdings, the Company or any Subsidiary to leave the employ of Holdings, the
Company or such Subsidiary, or in any way interfere with the relationship
between Holdings, the Company or any Subsidiary and any employee thereof, (ii)
hire any person who was an employee of Holdings, the Company or any Subsidiary
at any time during the year prior to the termination of the Employment Period or
(iii) induce or attempt to induce any customer, supplier, licensee, licensor,
franchisee or other business relation of Holdings, the Company or any Subsidiary
to cease doing business with Holdings, the Company or such Subsidiary, or in any
way interfere with the relationship between any such customer, supplier,
licensee, licensor, franchisee or business relation and Holdings, the Company or
any Subsidiary (including, without limitation, making any negative or
disparaging statements or communications regarding Holdings, the Company or any
Subsidiary).

          (c)  Executive agrees that: (i) the covenants set forth in this
Section 8 are reasonable in geographical and temporal scope and in all other
respects and that he has reviewed the provisions of this Agreement with his
legal counsel, (ii) neither Holdings nor the Company would have entered into
this Agreement but for the covenants of Executive contained herein, and (iii)
the covenants contained herein have been made in order to induce Holdings and
the Company to enter into this Agreement.

          (d)  If, at the time of enforcement of this Section 8, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances

                                     -5-

<PAGE>

shall be substituted for the stated duration, scope or area and that the court
shall be allowed to revise the restrictions contained herein to cover the
maximum period, scope and area permitted by law.

          (e)  Executive recognizes and affirms that in the event of his breach
of any provision of this Section 8, money damages would be inadequate and
Holdings and the Company would have no adequate remedy at law. Accordingly, the
Executive agrees that in the event of the breach or a threatened breach by
Executive of any of the provisions of this Section 8, Holdings or the Company,
in addition and supplementary to other rights and remedies existing in its
favor, shall be entitled to specific performance and/or injunctive or other
equitable relief from a court of competent jurisdiction in order to enforce or
prevent any violations of the provisions hereof (without posting a bond or other
security). In addition, in the event of an alleged breach or violation by
Executive of this Section 8, the Noncompete Period shall be tolled until such
breach or violation has been duly cured.

          9.   Executive's Representations. Executive hereby represents and
               ---------------------------
warrants to Holdings and the Company that (i) the execution, delivery and
performance of this Agreement by Executive do not and shall not conflict with,
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Executive is a party or by which he is bound,
(ii) Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other person or
entity and (iii) upon the execution and delivery of this Agreement by Holdings
and the Company, this Agreement shall be the valid and binding obligation of
Executive, enforceable in accordance with its terms. Executive hereby
acknowledges and represents that he has consulted with independent legal counsel
regarding his rights and obligations under this Agreement and that he fully
understands the terms and conditions contained herein.

          10.  Survival. Sections 6 through 19 shall survive and continue in
               --------
full force in accordance with their terms notwithstanding the expiration or
termination of the Employment Period.

          11.  Notices. All notices, demands or other communications to be given
               -------
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally, mailed
by certified or registered mail, return receipt requested and postage prepaid,
or sent via a nationally recognized overnight courier, or sent via fascimile to
the recipient with telephonic confirmation by the sending party. Such notices,
demands and other communications will be sent to the address indicated below:

          To Executive:
          ------------

          4660 Jefferson Township Place
          Marietta, GA 30066
          Attention: Stephen A. Walker
          Telecopy No.:
          Telephone.:  (770)645-5605

                                      -6-

<PAGE>

          To Holdings or the Company:
          --------------------------

          Mattress Holding Corporation
          c/o Bain Capital, Inc.
          Two Copley Place
          Boston, MA 02116
          Attention:  Michael Krupka
          Telecopy No.:  (617) 572-3274
          Telephone No.: (617) 572-2753

          With copies to:
          --------------

          Kirkland & Ellis
          Citicorp Center
          153 East 53rd Street
          New York, NY 10022
          Attention:  Lance C. Balk, Esq.
          Telecopy No.:  (212) 446-4900
          Telephone No.: (212) 446-4800

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.

          12.  Severability. Whenever possible, each provision of this Agreement
               ------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

          13.  Complete Agreement. This Agreement embodies the complete
               ------------------
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way,
but excluding any breaches thereof by either party prior to the date hereof.

          14.  No Strict Construction. The language used in this Agreement shall
               ----------------------
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.

                                      -7-

<PAGE>

     15.  Counterparts. This Agreement may be executed in separate counterparts,
          ------------
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.

     16.  Successors and Assigns. This Agreement is intended to bind and inure
          ----------------------
to the benefit of and be enforceable by Executive, Holdings, the Company and
their respective heirs, successors and assigns; provided that the rights and
obligations of Executive under this Agreement shall not be assignable.

     17.  Governing Law. All issues and questions concerning the construction,
          -------------
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules hereto shall be governed by, and construed in accordance with, the
laws of the State of New York, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of New York or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.

     18.  Amendment and Waiver. The provisions of this Agreement may be amended
          --------------------
or waived only with the prior written consent of Holdings, the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.

     19.  Remedies. Each of the parties to this Agreement will be entitled to
          --------
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.

                                   * * * * *

                                      -8-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                        MATTRESS HOLDING CORPORATION

                                        By:  /s/ Michael A. Krupka
                                             -----------------------------------

                                        Its: ___________________________________

                                        MATTRESS DISCOUNTERS CORPORATION

                                        By:  /s/ Michael A. Krupka
                                             -----------------------------------

                                        Its: ___________________________________

                                        /s/ Stephen A. Walker
                                        ----------------------------------------
                                        Stephen A. Walker

                                      -9-
<PAGE>

                                                                       Exhibit A

                                GENERAL RELEASE

     I, Stephen A. Walker, in consideration of and subject to the performance by
Mattress Holding Corporation, a Virginia corporation ("Holdings"), and Mattress
                                                       --------
Discounters Corporation, a Delaware corporation (together with Holdings and its
subsidiaries, the "Company"), of its material obligations under the Employment
                   -------
Agreement, dated as of December 6, 1999 (the "Agreement"), do hereby release and
                                              ---------
forever discharge as of the date hereof the Company and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of the Company and its direct or indirect owners (collectively, the "Released
                                                                     --------
Parties") to the extent provided below.
-------

1.   I understand that any payments or benefits paid or granted to me under
     Section 5(b) of the Agreement represent, in part, consideration for signing
     this General Release and are not salary, wages or benefits to which I was
     already entitled. I understand and agree that I will not receive the
     payments and benefits specified in Section 5(b) of the Agreement unless I
     execute this General Release and do not revoke this General Release within
     the time period permitted hereafter or breach this General Release.

2.   Except as provided in Section 4 below, I knowingly and voluntarily release
     and forever discharge the Company and the other Released Parties from any
     and all claims, controversies, actions, causes of action, cross-claims,
     counter-claims, demands, debts, compensatory damages, liquidated damages,
     punitive or exemplary damages, other damages, claims for costs and
     attorneys' fees, or liabilities of any nature whatsoever in law and in
     equity, both past and present (through the date of this General Release)
     and whether known or unknown, suspected, or claimed against the Company or
     any of the Released Parties which I, my spouse, or any of my heirs,
     executors, administrators or assigns, may have, which arise out of or are
     connected with my employment with, or my separation from, the Company
     (including, but not limited to, any allegation, claim or violation, arising
     under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
     Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
     amended (including the Older Workers Benefit Protection Act); the Equal Pay
     Act of 1963, as amended; the Americans with Disabilities Act of 1990; the
     Family and Medical Leave Act of 1993; the Civil Rights Act of 1866, as
     amended; the Worker Adjustment Retraining and Notification Act; the
     Employee Retirement Income Security Act of 1974; any applicable Executive
     Order Programs; the Fair Labor Standards Act; or their state or local
     counterparts; or under any other federal, state or local civil or human
     rights law, or under any other local, state, or federal law, regulation or
     ordinance; or under any public policy, contract or tort, or under common
     law; or arising under any policies, practices or procedures of the Company;
     or any claim for wrongful discharge, breach of contract, infliction of
     emotional distress, defamation; or any claim for costs, fees, or other
     expenses, including attorneys' fees incurred in these matters) (all of the
     foregoing collectively referred to herein as the "Claims").
                                                       ------

                                      A-1

<PAGE>

3.   I represent that I have made no assignment or transfer of any right, claim,
     demand, cause of action, or other matter covered by Section 2 above.

4.   I agree that this General Release does not waive or release any rights or
     claims that I may have under the Age Discrimination in Employment Act of
     1967 which arise after the date I execute this General Release. I
     acknowledge and agree that my separation from employment with the Company
     in compliance with the terms of the Agreement shall not serve as the basis
     for any claim or action (including, without limitation, any claim under the
     Age Discrimination in Employment Act of 1967).

5.   In signing this General Release, I acknowledge and intend that it shall be
     effective as a bar to each and every one of the Claims hereinabove
     mentioned or implied. I expressly consent that this General Release shall
     be given full force and effect according to each and all of its express
     terms and provisions, including those relating to unknown and unsuspected
     Claims (notwithstanding any state statute that expressly limits the
     effectiveness of a general release of unknown, unsuspected and
     unanticipated Claims), if any, as well as those relating to any other
     Claims hereinabove mentioned or implied. I acknowledge and agree that this
     waiver is an essential and material term of this General Release and that
     without such waiver the Company would not have agreed to the terms of the
     Agreement. I further agree that in the event I should bring a Claim seeking
     damages against the Company, or in the event I should seek to recover
     against the Company in any Claim brought by a governmental agency on my
     behalf, this General Release shall serve as a complete defense to such
     Claims. I further agree that I am not aware of any pending charge or
     complaint of the type described in Section 2 as of the execution of this
     General Release.

6.   I agree that neither this General Release, nor the furnishing of the
     consideration for this General Release, shall be deemed or construed at any
     time to be an admission by the Company, any Released Party or myself of any
     improper or unlawful conduct.

7.   I agree that I will forfeit all amounts payable by the Company pursuant to
     the Agreement if I challenge the validity of this General Release. I also
     agree that if I violate this General Release by suing the Company or the
     other Released Parties, I will pay all costs and expenses of defending
     against the suit incurred by the Released Parties, including reasonable
     attorneys' fees, and return all payments received by me pursuant to the
     Agreement.

8.   I agree that this General Release is confidential and agree not to disclose
     any information regarding the terms of this General Release, except to my
     immediate family and any tax, legal or other counsel I have consulted
     regarding the meaning or effect hereof or as required by law, and I will
     instruct each of the foregoing not to disclose the same to anyone.

9.   Any non-disclosure provision in this General Release does not prohibit or
     restrict me (or my attorney) from responding to any inquiry about this
     General Release or its underlying facts and circumstances by the Securities
     and Exchange Commission (SEC), the National

                                      A-2
<PAGE>

     Association of Securities Dealers, Inc. (NASD), any other self-regulatory
     organization or governmental entity.

10.  I agree to reasonably cooperate with the Company in any internal
     investigation or administrative, regulatory, or judicial proceeding. I
     understand and agree that my cooperation may include, but not be limited
     to, making myself available to the Company upon reasonable notice for
     interviews and factual investigations; appearing at the Company's request
     to give testimony without requiring service of a subpoena or other legal
     process; volunteering to the Company pertinent information; and turning
     over to the Company all relevant documents which are or may come into my
     possession all at times and on schedules that are reasonably consistent
     with my other permitted activities and commitments. I understand that in
     the event the Company asks for my cooperation in accordance with this
     provision, the Company will reimburse me solely for reasonable travel
     expenses, including lodging and meals, upon my submission of receipts.

11.  Notwithstanding anything in this General Release to the contrary, this
     General Release shall not relinquish, diminish, or in any way affect any
     rights or claims arising out of any breach by the Company or by any
     Released Party of the Agreement.

12.  Whenever possible, each provision of this General Release shall be
     interpreted in, such manner as to be effective and valid under applicable
     law, but if any provision of this General Release is held to be invalid,
     illegal or unenforceable in any respect under any applicable law or rule in
     any jurisdiction, such invalidity, illegality or unenforceability shall not
     affect any other provision or any other jurisdiction, but this General
     Release shall be reformed, construed and enforced in such jurisdiction as
     if such invalid, illegal or unenforceable provision had never been
     contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

(a)  I HAVE READ IT CAREFULLY;

(b)  I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT
     RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION
     IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF
     1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
     DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
     OF 1974, AS AMENDED;

(c)  I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

(d)  I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I
     HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT
     TO DO SO OF MY OWN VOLITION;

                                      A-3
<PAGE>

(e)  I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
     SUBSTANTIALLY IN ITS FINAL FORM ON _______________, _____ TO CONSIDER IT
     AND THE CHANGES MADE SINCE THE ____________________, _____ VERSION OF THIS
     RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

(f)  THE CHANGES TO THE AGREEMENT SINCE DECEMBER 6, 1999 EITHER ARE NOT MATERIAL
     OR WERE MADE AT MY REQUEST.

(g)  I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO
     REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE
     UNTIL THE REVOCATION PERIOD HAS EXPIRED;

(h)  I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE
     ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

(i)  I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
     WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN
     AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

DATE: DEC 6, 1999.                             /s/ Stephen Walker
      --------------------                     ------------------------

                                      A-4<PAGE>

                                                                   Exhibit 10.26

                                                                  EXECUTION COPY

                        MATTRESS DISCOUNTERS CORPORATION

                              EMPLOYMENT AGREEMENT

            THIS AGREEMENT is made as of August 6, 1999, between Mattress
Discounters Corporation, a Delaware corporation (the "Company"), and Raymond T.
Bojanowski ("Executive").

            In consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

            1. Employment. The Company agrees to employ Executive, and Executive
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and ending
as provided in Section 4 hereof (the "Employment Period").

            2. Position and Duties.

            (a) During the Employment Period, Executive shall serve as the
Executive Vice President of Sales of the Company and shall have the normal
duties, responsibilities and authority of the Executive Vice President of Sales,
subject to the power of the Company's President and the Company's board of
directors (the "Board") to expand or limit such duties, responsibilities and
authority and to override actions of officers of the Company.

            (b) During the Employment Period, Executive shall report to the
Board and shall devote his best efforts and his full business time and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity other than Disability) to the business and affairs of the
Company and its Subsidiaries. Executive shall perform his duties and
responsibilities to the Company and its Subsidiaries hereunder to the best of
his abilities in a diligent, trustworthy, businesslike and efficient manner.

            (c) For purposes of this Agreement, "Subsidiaries" shall mean any
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company, directly
or through one or more Subsidiaries. For purposes hereof, the Company shall be
deemed to have a majority ownership interest in a partnership, limited liability
company (without voting securities), association or other business entity if the
Company, directly or through one or more Subsidiaries, shall be allocated a
majority of partnership, limited liability company,
<PAGE>

association or other business entity gains or losses or shall be or control the
managing director or general partner of such partnership, limited liability
company, association or other business entity. For purposes of this Agreement,
"Disability" means the inability, due to illness, accident, injury, physical or
mental incapacity or other disability, of the Executive to carry out effectively
his duties and obligations to the Company or to participate effectively and
actively in the management of the Company or a Subsidiary of the Company for a
period or periods aggregating at least 90 days (whether or not consecutive)
during any twelve-month period, as determined in the reasonable judgment of the
Board.

            3. Compensation and Benefits.

            (a) During the Employment Period, Executive's base salary shall be
$275,000 per annum or such higher rate as the Board may designate from time to
time (the "Base Salary"), which salary shall be payable in regular installments
in accordance with the Company's general payroll practices. In addition, during
the Employment Period, Executive shall be entitled to participate in all of the
Company's employee compensatory and benefit programs for which senior executive
employees of the Company and its Subsidiaries are generally eligible.

            (b) During the Employment Period, the Company shall reimburse
Executive for all reasonable expenses incurred by him in the course of
performing his duties and responsibilities under this Agreement which are
consistent with the Company's policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to the Company's
requirements with respect to reporting and documentation of such expenses.

            (c) In addition to the Base Salary, the Board will award a bonus to
Executive subject to the provisions of and in accordance with the attached
Exhibit A, pro rated for the period beginning on August 6, 1999 and ending
December 31, 1999. The Board shall determine an appropriate bonus plan for
periods thereafter.

            (d) All amounts payable to Executive as compensation hereunder shall
be subject to customary withholding by the Company.

            4. Term.

            (a) The initial Employment Period shall end on February 6, 2001 and
will thereafter be automatically extended for consecutive 18 month periods
unless notice of termination is delivered by either party to the other at least
90 days prior to the end of such period; provided that (i) the Employment Period
shall terminate prior to such date immediately upon Executive's resignation,
death or Disability and (ii) the Employment Period may be terminated by the
Company at any time prior to such date for Cause (as defined below) or without
Cause. Except as otherwise provided herein, any termination of the Employment
Period by the Company shall be effective as specified in a written notice from
the Company to Executive.

                                      -2-
<PAGE>

            (b) If the Employment Period is terminated by the Company or its
successors in interest without Cause, Executive shall be entitled to continue to
receive his Base Salary payable in regular installments for a period of 18
months from the date of termination (the "Severance Period"), if and only if
Executive has executed and delivered to the Company a General Release in the
form of Exhibit B attached hereto and only so long as Executive has not breached
the provisions of Sections 5, 6 and 7 hereof. The amounts payable pursuant to
this Section 4(b) may be payable, at Company's discretion, in one lump sum
payment within 30 days following termination of the Employment Period.

            (c) If the Employment Period is terminated by the Company for Cause
or is terminated pursuant to clause (a)(i) above or expires and is not renewed
hereunder, Executive shall only be entitled to receive his Base Salary through
the date of termination or expiration.

            (d) Except as otherwise expressly provided herein, all of
Executive's rights to salary, bonuses, fringe benefits and other compensation
hereunder which accrue or become payable after the termination or expiration of
the Employment Period shall cease upon such termination or expiration. The
Company may offset any amounts Executive owes it or its Subsidiaries against any
amounts it owes Executive hereunder.

            (e) For purposes of this Agreement, "Cause" shall mean (i) the
commission of a felony or other crime involving moral turpitude or the
commission of any other act or omission involving dishonesty, disloyalty or
fraud with respect to the Company or any of its Subsidiaries or any of their
customers or suppliers, (ii) chronic drug or alcohol abuse or other repeated
conduct causing the Company or any of its Subsidiaries substantial public
disgrace or disrepute or economic harm, (iii) substantial and repeated failure
to perform duties as reasonably directed by the Board, which is not cured, if
curable, to the Board's reasonable satisfaction in all material respects within
thirty (30) days after the Board or the designee thereof gives written notice
thereof to Executive, (iv) any other act or omission of Executive which would in
law permit an employer to, without notice or payment in lieu of notice,
terminate the employment of an employee or (v) any other material breach of this
Agreement which is not cured, if curable, to the Board's reasonable satisfaction
within 15 days after written notice thereof to Executive (provided, that a
breach of Sections 5, 6 or 7 shall be material and the applicable cure period
shall be 3 days).

            5. Confidential Information. Executive acknowledges that the
information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Subsidiaries concerning the business or
affairs of the Company or any Subsidiary ("Confidential Information") are the
property of the Company or such Subsidiary. Therefore, Executive agrees that he
shall not disclose to any unauthorized person or use for his own purposes any
Confidential Information without the prior written consent of the Board, unless
and to the extent that the Confidential Information becomes generally known to
and available for use by the public other than as a result of Executive's acts
or omissions. Executive shall deliver to the Company at the termination or
expiration of the Employment Period, or at any other time the Company may
request, all memoranda, notes, plans, records, reports, computer tapes,
printouts and software and

                                      -3-
<PAGE>

other documents and data (and copies thereof) embodying or relating to the
Confidential Information, Work Product (as defined below) or the business of the
Company or any Subsidiaries which he may then possess or have under his control.

            6. Inventions and Patents. Executive acknowledges that all
inventions, innovations, improvements, developments, methods, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) which relate to the Company's or any of its Subsidiaries' actual or
anticipated business, research and development or existing or future products or
services and which are conceived, developed or made by Executive while employed
by the Company and its Subsidiaries ("Work Product") belong to the Company or
such Subsidiary. Executive shall promptly disclose such Work Product to the
Board and, at the Company's expense, perform all actions reasonably requested by
the Board (whether during or after the Employment Period) to establish and
confirm such ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).

            7. Non-Compete, Non-Solicitation.

            (a) In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment
with the Company and its Subsidiaries he shall become familiar, and he has
become familiar, with the Company's trade secrets and with other Confidential
Information and that his services have been and shall be of special, unique and
extraordinary value to the Company and its Subsidiaries. Therefore, Executive
agrees that, during the Employment Period and for three years thereafter (the
"Noncompete Period"), he shall not directly or indirectly own any interest in,
operate, manage, control, participate in, consult with, advise, render services
for, or in any manner engage in any business (including by himself or in
association with any person, firm, corporate or other business organization or
through any other entity) in competition with, or potential competition with,
the businesses of the Company or its Subsidiaries as such businesses exist or
are in process on the date of the termination or expiration of the Employment
Period, within any geographical area in which the Company or its Subsidiaries
engage or plan to engage in such businesses. Nothing herein shall prohibit
Executive from being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation which is publicly traded, so long as
Executive has no active participation in the business of such corporation.

            (b) During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee
of the Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company or
any Subsidiary and any employee thereof, (ii) hire any person who was an
employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier, licensee,
licensor, franchisee or other business relation of the Company or any Subsidiary
to cease doing business with the Company or such Subsidiary, or in any way
interfere with the relationship between any such customer, supplier, licensee,
licensor, franchisee or business relation and the Company or any Subsidiary
(including,

                                      -4-
<PAGE>

without limitation, making any negative or disparaging statements or
communications regarding the Company or its Subsidiaries).

            (c) Executive agrees that: (i) the covenants set forth in this
Section 7 are reasonable in geographical and temporal scope and in all other
respects and that he has reviewed the provisions of this Agreement with his
legal counsel, (ii) the Company would not have entered into this Agreement but
for the covenants of Executive contained herein, and (iii) the covenants
contained herein have been made in order to induce the Company to enter into
this Agreement.

            (d) If, at the time of enforcement of this Section 7, a court shall
hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.

            (e) Executive recognizes and affirms that in the event of his breach
of any provision of this Section 7, money damages would be inadequate and the
Company would have no adequate remedy at law. Accordingly, the Executive agrees
that in the event of the breach or a threatened breach by Executive of any of
the provisions of this Section 7, the Company, in addition and supplementary to
other rights and remedies existing in its favor, shall be entitled to specific
performance and/or injunctive or other equitable relief from a court of
competent jurisdiction in order to enforce or prevent any violations of the
provisions hereof (without posting a bond or other security). In addition, in
the event of an alleged breach or violation by Executive of this Section 7, the
Noncompete Period shall be tolled until such breach or violation has been duly
cured.

            8. Executive's Representations. Executive hereby represents and
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms. Executive hereby acknowledges and represents that he has consulted
with independent legal counsel regarding his rights and obligations under this
Agreement and that he fully understands the terms and conditions contained
herein.

            9. Survival. Sections 5 through 19 shall survive and continue in
full force in accordance with their terms notwithstanding the expiration or
termination of the Employment Period.

            10. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement will
be in writing and will be deemed to have been given when delivered personally,
mailed by certified or registered mail, return

                                      -5-
<PAGE>

receipt requested and postage prepaid, or sent via a nationally recognized
overnight courier, or sent via facsimile to the recipient with telephonic
confirmation by the sending party. Such notices, demands and other
communications will be sent to the address indicated below:

            To Executive:

            13656 Palmetto Circle
            Germantown, MD 20874
            Attention: Raymond T. Bojanowski
            Telecopy No.: (301) 515-3914
            Telephone No.: (301) 428-0714

            To the Company:

            Mattress Discounters Corporation
            9822 Fallard Court
            Upper Marlboro, MD 20772
            Attention: Board of Directors
            Telecopy No.: (301) 856-4591
            Telephone No.: (301) 856-6755

            With copies to:

            Bain Capital, Inc.
            Two Copley Place
            Boston, MA  02116
            Attention: Michael Krupka
            Telecopy No.: (617) 572-3274
            Telephone No.: (617) 572-2753

            Kirkland & Ellis
            Citicorp Center
            153 East 53rd Street
            New York, NY  10022
            Attention: Lance C. Balk, Esq.
            Telecopy No.: (212) 446-4900
            Telephone No.: (212) 446-4800

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.

                                      -6-
<PAGE>

            11. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

            12. Complete Agreement. This Agreement embodies the complete
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way
(including, without limitation, the Employment Agreement between the parties
hereto, dated January 1, 1997), but excluding any breaches thereof by either
party prior to the date hereof.

            13. No Strict Construction. The language used in this Agreement
shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party.

            14. Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.

            15. Successors and Assigns. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns; provided that the rights and
obligations of Executive under this Agreement shall not be assignable.

            16. Governing Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement and the
exhibits and schedules hereto shall be governed by, and construed in accordance
with, the laws of the State of Delaware, without giving effect to any choice of
law or conflict of law rules or provisions (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.

            17. Amendment and Waiver. The provisions of this Agreement may be
amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.

            18. Remedies. Each of the parties to this Agreement will be entitled
to enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other

                                      -7-
<PAGE>

rights existing in its favor. The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any breach of the provisions of
this Agreement and that any party may in its sole discretion apply to any court
of law or equity of competent jurisdiction (without posting any bond or deposit)
for specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.

                             *    *    *    *    *

                                      -8-
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.

                                        MATTRESS DISCOUNTERS CORPORATION

                                        By:  /s/ Raymond T. Bojanowski
                                           _____________________________________

                                        Its:____________________________________

                                        ________________________________________
                                        RAYMOND T. BOJANOWSKI

                                      -9-
<PAGE>

                                                                       Exhibit B

                                 GENERAL RELEASE

      I, Raymond T. Bojanowski, in consideration of and subject to the
performance by Mattress Discounters Corporation, a Delaware corporation
(together with its subsidiaries, the "Company"), of its material obligations
under the Employment Agreement, dated as of August 6, 1999 (the "Agreement"), do
hereby release and forever discharge as of the date hereof the Company and all
present and former directors, officers, agents, representatives, employees,
successors and assigns of the Company and its direct or indirect owners
(collectively, the "Released Parties") to the extent provided below.

1.    I understand that any payments or benefits paid or granted to me under
      Section 4(b) of the Agreement represent, in part, consideration for
      signing this General Release and are not salary, wages or benefits to
      which I was already entitled. I understand and agree that I will not
      receive the payments and benefits specified in Section 4(b) of the
      Agreement unless I execute this General Release and do not revoke this
      General Release within the time period permitted hereafter or breach this
      General Release.

2.    Except as provided in Section 4 below, I knowingly and voluntarily release
      and forever discharge the Company and the other Released Parties from any
      and all claims, controversies, actions, causes of action, cross-claims,
      counter-claims, demands, debts, compensatory damages, liquidated damages,
      punitive or exemplary damages, other damages, claims for costs and
      attorneys' fees, or liabilities of any nature whatsoever in law and in
      equity, both past and present (through the date of this General Release)
      and whether known or unknown, suspected, or claimed against the Company or
      any of the Released Parties which I, my spouse, or any of my heirs,
      executors, administrators or assigns, may have, which arise out of or are
      connected with my employment with, or my separation from, the Company
      (including, but not limited to, any allegation, claim or violation,
      arising under: Title VII of the Civil Rights Act of 1964, as amended; the
      Civil Rights Act of 1991; the Age Discrimination in Employment Act of
      1967, as amended (including the Older Workers Benefit Protection Act); the
      Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of
      1990; the Family and Medical Leave Act of 1993; the Civil Rights Act of
      1866, as amended; the Worker Adjustment Retraining and Notification Act;
      the Employee Retirement Income Security Act of 1974; any applicable
      Executive Order Programs; the Fair Labor Standards Act; or their state or
      local counterparts; or under any other federal, state or local civil or
      human rights law, or under any other local, state, or federal law,
      regulation or ordinance; or under any public policy, contract or tort, or
      under common law; or arising under any policies, practices or procedures
      of the Company; or any claim for wrongful discharge, breach of contract,
      infliction of emotional distress, defamation; or any claim for costs,
      fees, or other expenses, including attorneys' fees incurred in these
      matters) (all of the foregoing collectively referred to herein as the
      "Claims").

                                      B-1
<PAGE>

3.    I represent that I have made no assignment or transfer of any right,
      claim, demand, cause of action, or other matter covered by Section 2
      above.

4.    I agree that this General Release does not waive or release any rights or
      claims that I may have under the Age Discrimination in Employment Act of
      1967 which arise after the date I execute this General Release. I
      acknowledge and agree that my separation from employment with the Company
      in compliance with the terms of the Agreement shall not serve as the basis
      for any claim or action (including, without limitation, any claim under
      the Age Discrimination in Employment Act of 1967).

5.    In signing this General Release, I acknowledge and intend that it shall be
      effective as a bar to each and every one of the Claims hereinabove
      mentioned or implied. I expressly consent that this General Release shall
      be given full force and effect according to each and all of its express
      terms and provisions, including those relating to unknown and unsuspected
      Claims (notwithstanding any state statute that expressly limits the
      effectiveness of a general release of unknown, unsuspected and
      unanticipated Claims), if any, as well as those relating to any other
      Claims hereinabove mentioned or implied. I acknowledge and agree that this
      waiver is an essential and material term of this General Release and that
      without such waiver the Company would not have agreed to the terms of the
      Agreement. I further agree that in the event I should bring a Claim
      seeking damages against the Company, or in the event I should seek to
      recover against the Company in any Claim brought by a governmental agency
      on my behalf, this General Release shall serve as a complete defense to
      such Claims. I further agree that I am not aware of any pending charge or
      complaint of the type described in Section 2 as of the execution of this
      General Release.

6.    I agree that neither this General Release, nor the furnishing of the
      consideration for this General Release, shall be deemed or construed at
      any time to be an admission by the Company, any Released Party or myself
      of any improper or unlawful conduct.

7.    I agree that I will forfeit all amounts payable by the Company pursuant to
      the Agreement if I challenge the validity of this General Release. I also
      agree that if I violate this General Release by suing the Company or the
      other Released Parties, I will pay all costs and expenses of defending
      against the suit incurred by the Released Parties, including reasonable
      attorneys' fees, and return all payments received by me pursuant to the
      Agreement.

8.    I agree that this General Release is confidential and agree not to
      disclose any information regarding the terms of this General Release,
      except to my immediate family and any tax, legal or other counsel I have
      consulted regarding the meaning or effect hereof or as required by law,
      and I will instruct each of the foregoing not to disclose the same to
      anyone.

9.    Any non-disclosure provision in this General Release does not prohibit or
      restrict me (or my attorney) from responding to any inquiry about this
      General Release or its underlying facts and circumstances by the
      Securities and Exchange Commission (SEC), the National

                                      B-2
<PAGE>

      Association of Securities Dealers, Inc. (NASD), any other self-regulatory
      organization or governmental entity.

10.   I agree to reasonably cooperate with the Company in any internal
      investigation or administrative, regulatory, or judicial proceeding. I
      understand and agree that my cooperation may include, but not be limited
      to, making myself available to the Company upon reasonable notice for
      interviews and factual investigations; appearing at the Company's request
      to give testimony without requiring service of a subpoena or other legal
      process; volunteering to the Company pertinent information; and turning
      over to the Company all relevant documents which are or may come into my
      possession all at times and on schedules that are reasonably consistent
      with my other permitted activities and commitments. I understand that in
      the event the Company asks for my cooperation in accordance with this
      provision, the Company will reimburse me solely for reasonable travel
      expenses, including lodging and meals, upon my submission of receipts.

11.   Notwithstanding anything in this General Release to the contrary, this
      General Release shall not relinquish, diminish, or in any way affect any
      rights or claims arising out of any breach by the Company or by any
      Released Party of the Agreement.

12.   Whenever possible, each provision of this General Release shall be
      interpreted in, such manner as to be effective and valid under applicable
      law, but if any provision of this General Release is held to be invalid,
      illegal or unenforceable in any respect under any applicable law or rule
      in any jurisdiction, such invalidity, illegality or unenforceability shall
      not affect any other provision or any other jurisdiction, but this General
      Release shall be reformed, construed and enforced in such jurisdiction as
      if such invalid, illegal or unenforceable provision had never been
      contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

(a)   I HAVE READ IT CAREFULLY;

(b)   I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT
      RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION
      IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT
      OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
      DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
      OF 1974, AS AMENDED;

(c)   I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

                                      B-3
<PAGE>

(d)   I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I
      HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT
      TO DO SO OF MY OWN VOLITION;

(e)   I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
      SUBSTANTIALLY IN ITS FINAL FORM ON _______________ __, _____ TO CONSIDER
      IT AND THE CHANGES MADE SINCE THE _______________ __, _____ VERSION OF
      THIS RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY
      PERIOD;

(f)   THE CHANGES TO THE AGREEMENT SINCE AUGUST 6, 1999 EITHER ARE NOT MATERIAL
      OR WERE MADE AT MY REQUEST.

(g)   I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO
      REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE
      UNTIL THE REVOCATION PERIOD HAS EXPIRED;

(h)   I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE
      ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

(i)   I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
      WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY
      AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

DATE: ___________ __, ______                      ______________________________

                                     B-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]