Document:

<PAGE>
                                                                   EXHIBIT 10.18

                                AGREEMENT BETWEEN
                                SIMMONS COMPANY,
                              COLUMBUS, OHIO PLANT

                                       AND

                        UNITED STEEL WORKERS OF AMERICA,
                                 AFL, CIO, CLC

                                    LOCAL 424

                     October 16, 2001 until October 15, 2004

<PAGE>

                                     INDEX
<TABLE>
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ARTICLE           TITLE                                                                                       PAGE
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<S>                                                                                                             <C>
    I             RECOGNITION AND UNION SECURITY..........................................................      1
                  Employees Covered.......................................................................      1
                  Union Security..........................................................................      2
                  Check-Off...............................................................................      3
                  Union Representative Seniority..........................................................      3
                  Procedure for Returning from Leave of Absence for Union Activity........................      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.....................................................      5
                  Grievance Procedure.....................................................................      5
                  Grievances - Step 1.....................................................................      5
                  Grievances - Step 2.....................................................................      5
                  Grievances - Step 3.....................................................................      6
                  Resolution by Default...................................................................      6
                  Arbitration of Disputes.................................................................      6
                  Selection of Arbitrators................................................................      6
                  Authority of Arbitrator.................................................................      7
                  Expedited Arbitration...................................................................      7

    IV            HOURS OF WORK AND PREMIUM PAY...........................................................      8
                  Work Week...............................................................................      8
                  Overtime Hours..........................................................................      8
                  Saturday and Sunday Work................................................................      8
                  Availability for Scheduled Work.........................................................      8
                  No Pyramiding...........................................................................      9
                  Shift Schedule..........................................................................      9
                  Shift Premiums..........................................................................     11
                  Reporting Pay...........................................................................     11

    V             NO STRIKE - NO LOCKOUT..................................................................     11

    VI            MANAGEMENT RIGHTS CLAUSE................................................................     11
</TABLE>

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<TABLE>
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ARTICLE           TITLE                                                                                       PAGE
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<S>                                                                                                             <C>
    VII           SENIORITY...............................................................................      11
                  Accumulation of Seniority...............................................................      12
                  Termination of Seniority................................................................      12
                  Layoff..................................................................................      13
                  Right of Recall.........................................................................      14
                  Notice of Recall........................................................................      15
                  Change of Address.......................................................................      15
                  Layoff Notice...........................................................................      16
                  Furlough................................................................................      16
                  Equalization of Work Wherever Practicable...............................................      16
                  Probationary Period.....................................................................      16
                  Return from Promotion out of Bargaining Unit............................................      16
                  Seniority List..........................................................................      17
                  Change in Union Representatives.........................................................      17
                  Job Bidding Procedures..................................................................      17
                  Transfer After Successful Bid...........................................................      17
                  In the Event of No Bidders..............................................................      18
                  War Emergency...........................................................................      18
                  Seniority Bonus.........................................................................      18
                  Temporary Employees.....................................................................      18

    VIII          WAGES...................................................................................      18
                  Hiring Rate.............................................................................      18
                  Hourly Rates............................................................................      19
                  Shop Committee Meetings.................................................................      19
                  General Wage Increases..................................................................      19
                  Reactivation of Old Classifications.....................................................      19
                  Establishment of New Classifications....................................................      19
                  Rate for Borrowed Man...................................................................      20
                  Average Rate Computation................................................................      20
                  Work Wait Compensation..................................................................      21
                  Injured During Work.....................................................................      22
                  Qualified Incentive Workers.............................................................      23
</TABLE>

                                     -iii-

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ARTICLE           TITLE                                                                                       PAGE
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<S>                                                                                                           <C>
    IX            STANDARD ALLOWED HOURS..................................................................      23
                  Incentive Compensation Plan.............................................................      23
                  New or Varied Jobs and Operations.......................................................      23
                  Standard Allowed Hour...................................................................      24
                  Written Confirmation and Effective Date of SAH..........................................      25
                  Procedural Interpretation of Section....................................................      25
                  Grievances Regarding Incentive Standards................................................      26
                  Availability of Time Study Data.........................................................      27
                  Union Time Study Engineer...............................................................      27
                  Standard Data...........................................................................      27

    X             PAID HOLIDAYS...........................................................................      28
                  Holidays Observed.......................................................................      28
                  Eligibility.............................................................................      28
                  Leave of Absence........................................................................      28
                  Holiday Pay.............................................................................      28
                  Holidays During Approved Vacation.......................................................      28
                  Multiple Holidays on Same Day...........................................................      28
                  Holidays on Sunday......................................................................      28
                  Holidays on Saturday....................................................................      29
                  Pay Rate................................................................................      29
                  Overtime and Premium Pay................................................................      29

    XI            PAID VACATIONS..........................................................................      29
                  Vacation................................................................................      29
                  Pay Rate................................................................................      30
                  Intermittent Vacation...................................................................      30
                  Plant Shutdown and Staggered Vacation...................................................      30
                  Eligibility.............................................................................      30
                  Scheduling of Staggered Vacations.......................................................      30
                  No Accumulation.........................................................................      31
                  Shift Premium...........................................................................      31

    XII           INVENTORY WORK..........................................................................      31

    XIII          LEAVE OF ABSENCE........................................................................      31
                  Return from Leave of Absence............................................................      31

    XIV           UIU PENSION TRUST.......................................................................      31
</TABLE>

                                      -iv-

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

    XVI           JURY SERVICE............................................................................       36

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

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

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

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

    XXI           EQUAL EMPLOYMENT OPPORTUNITY............................................................       38

    XXII          MISCELLANEOUS...........................................................................       39
                  Information.............................................................................       39
                  Safety Shoes............................................................................       39
                  Cameras.................................................................................       39
                  Hand Cleaner............................................................................       39
                  Skills Audits...........................................................................       39
                  Incentive Systems.......................................................................       39
</TABLE>

                                      -v-

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ARTICLE           TITLE                                                                                       PAGE
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<S>                                                                                                             <C>
    XXIII         SAVING CLAUSE...........................................................................       39
                  Separability............................................................................       39
                  Federal and State Laws..................................................................       39

    XXIV          SEVERANCE AND PLANT CLOSINGS............................................................       40

    XXV           DURATION AND TERMINATION OF SUPPLEMENT..................................................       40
                  Effective Dates.........................................................................       40
                  Entire Agreement........................................................................       40
                  Modification or Termination ............................................................       40

    XXVI          CONTRACT RE-OPENER......................................................................       40

                  SIGNATURES..............................................................................       42

                  APPENDIX "A" RATES FOR HOURLY WORKERS...................................................       43

                  APPENDIX "B" RATES FOR INCENTIVE WORKERS................................................       45

                  APPENDIX "C" ARBITRATORS FOR EXPEDITED
                           ARBITRATION....................................................................       47
</TABLE>

                                      -vi-

<PAGE>

                               COLUMBUS AGREEMENT

                                    AGREEMENT

         This Agreement, made this 16H day of October, 2001, by and between
Simmons Company, Columbus, Ohio (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. 424, for and on behalf of itself and the
employees of said Company at its plant located at Columbus, Ohio.

                                   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 EMPLOYER
and the UNION and, therefore, all AGREEMENTs or understandings concerning hours,
wages and working conditions between the EMPLOYER and the employees covered by
this contract are to be made by the EMPLOYER 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 Company hereby recognizes the Union as the
sole and exclusive collective bargaining agent for all the Company's employees
employed by it at its Columbus, Ohio plant. The persons covered by this contract
include all production employees of the Company employed in its Columbus, Ohio,
plant, excluding executives, sales employees, office workers, timekeepers,
watchmen, office janitors, maintenance department employees, truck drivers,
foremen, supervisors, private chauffeurs, main office, clerical, and engine room
and power plant employees.

<PAGE>
         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 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 uniformly
                           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 District Director notifying him of the
                           requested discharge. Failure of the District Director
                           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 7.10
                           of this AGREEMENT.

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

                                      -2-
<PAGE>

                  G.       No Union member shall be compelled to train employees
                           of a non-Union shop.

         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 of America 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 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 UNION REPRESENTATIVE SENIORITY. All officers shall have top
seniority in their classification in the Department and Plant on all layoffs and
recalls. The priority sequence will be as follows: President, Vice President,
Financial Secretary, Recording Secretary, Treasurer, and three (3) Trustees.

         1.06 PROCEDURE FOR RETURNING FROM LEAVE OF ABSENCE FOR UNION ACTIVITY.
An employee, at the expiration of his leave of absence for Union activity, shall
be returned to his former classification on the basis of seniority.

                                   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.

                                      -3-
<PAGE>

                  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.

         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.

                   The Company shall have five (5) working days from the time it
                  learns of the alleged offense to issue disciplinary action.
                  This time limit will be extended to include the time the
                  employee subject to discipline is not physically present at
                  the plant to receive the discipline. After either of the
                  aforementioned times, whichever is later, no discipline can be
                  issued.

                  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.

                                      -4-
<PAGE>

                                   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.

                  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 1(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.

                                      -5-
<PAGE>

         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) 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. 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 8.09 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.

                                      -6-
<PAGE>

         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 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 PARTIES
WILL EACH SELECT THREE (3) ARBITRATORS WHO ARE EITHER AMERICAN ARBITRATION
ASSOCIATION OR FMCS ARBITRATORS TO SERVE ON AN EXPEDITED ARBITRATION PANEL. TWO
OF THE SIX ARBITRATORS SHALL BE QUALIFIED TIME STUDY ENGINEERS AND ALL
ARBITRATORS SELECTED FOR THE PANEL MUST BE WILLING TO ACCEPT THE CONTRACTUAL
CONDITIONS FOR EXPEDITED ARBITRATION. THE PARTY REQUESTING THE EXPEDITED
GRIEVANCE PROCEDURE SHALL IMMEDIATELY CONTACT THE AMERICAN ARBITRATION
ASSOCIATION TO REQUEST THE FIRST AVAILABLE ARBITRATOR FROM THE PRE-AGREED PANEL
OF SIX (6) ARBITRATORS (SEE APPENDIX C) WHO CAN HEAR THE CASE WITHIN SEVEN (7)
CALENDAR DAYS OF THE REQUEST.

                  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.

                                      -7-
<PAGE>

                                   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 8.11 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.

         4.03 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.

         OVERTIME SCHEDULING. Employees must be available to work overtime on
the day they return from any absence if overtime was scheduled in their
classification and the employee failed to speak to their immediate or assigned
supervisor when reporting their absence. (Overtime shall not exceed 10 hours).

              (a)    Overtime. The normal overtime schedule for production
                     employees will be limited to ten (10) hours per day Monday
                     through Friday and no more than eight (8) hours on
                     Saturday. In the event of a serious customer service
                     requirement, overtime hours may be expanded to a maximum of
                     twelve (12) hours per day Monday through Friday and eight
                     (8) hours on Saturday. If twelve (12) hours are necessary,
                     the Company will first seek volunteers. If there are not
                     enough volunteers then the overtime will be scheduled
                     according to seniority. Production on Sundays and holidays
                     may be

                                      -8-
<PAGE>

                     performed by volunteers but will not be mandatory. No
                     employee can be scheduled for more than 58 hours in a one
                     week period. Work over 58 hours will be done on a voluntary
                     basis only.

              (b)    On those occasions where the COMPANY's orders are heavy
                     they must have the right to schedule overtime to satisfy
                     the customers' requirements. If the overtime requirement
                     continues the COMPANY will hire new people and train them
                     or even bring in finished stock from other factories rather
                     than work continued overtime. Over the long run heavy
                     overtime tends to be counter productive and is not in the
                     best interest of SIMMONS COMPANY or its employees. The
                     COMPANY'S intent here is to have the flexibility needed to
                     work overtime on a limited basis to satisfy the customers.
                     In all cases the COMPANY will make every effort to use the
                     variable starting times by department so as to reduce the
                     amount of overtime required on a daily basis.

              (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.

         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.

         4.06 SHIFT SCHEDULE. The following is the usual shift schedule. The
shift schedule below will be modified to permit local plant management to vary
the starting time up to 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 individual involved. Failure to give
three (3) days notice for shift varying times will not release the COMPANY from
payment of overtime premium pay. When it is necessary to temporarily assign an
employee, or group of employees, from a permanent shift assignment to take care
of customer demands, the Company may adjust shift hours, plus or minus up to one
hour, with reasonable notice (reasonable means by the end of the prior working
day) without penalty of overtime premium.

              A.     When one shift is to be worked in any department, the
                     schedule will be from 7:00 a.m. until 3:30 p.m. with a
                     one-half hour unpaid lunch period between 11:00 a.m. to
                     12:30 p.m.

                                      -9-
<PAGE>

       B.     When two shifts are to be worked in any department, the schedule
              will be as follows:

              1.     The first shift will work from 7:00 a.m. until 3:30 p.m.
                     with a one-half hour unpaid lunch period between 11:00 a.m.
                     to 12:30 p.m.

              2.     The second shift will work from 3:30 p.m. until 12:00
                     midnight with a one-half hour unpaid lunch period between
                     7:30 p.m. to 8:00 p.m.

       C.     When three shifts are to be worked in any department, the schedule
              will be as follows:

              1.     The first shift will work from 7:00 a.m. until 3:00 p.m.
                     with a one-half hour paid lunch period between 11:00 a.m.
                     to 12:30 p.m.

              2.     The second shift will work from 3:00 p.m. until 11:00 p.m.
                     with a one-half hour paid lunch period between 7:00 p.m. to
                     7:30 p.m.

              3.     The third shift will work from 11:00 p.m. until 7:00 a.m.
                     with a one-half hour paid lunch period between 3:00 a.m. to
                     3:30 a.m.

       D.     WORKING HOURS. If three shifts become necessary, each shift may be
              scheduled so that the employees each work a full eight-hour shift
              with an additional unpaid 1/2 hour for lunch. In this case, the
              shift hours will overlap each other.

              When it is necessary to temporarily assign an employee, or group
              of employees, from a permanent shift assignment to take care of
              the operational bottlenecks, the Company has the right to adjust
              the starting time up to plus or minus one hour from normal as long
              as reasonable notice (reasonable notice means by the prior work
              day) is given to the employees involved.

       E.     FRIDAY NIGHT SHIFT. Employees who work the night shift on Friday
              will not be made to work before 11:00 a.m. Saturday.

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

       G.     RIGHT OF REFUSAL FOR INCENTIVE EMPLOYEES. An incentive employee
              shall have the right to refuse all work after four (4) hours if
              assigned to another classification with a rate lower than his/her
              average.

                            (SEE PAY PLUS ADDENDUM)

                                      -10-
<PAGE>

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

         4.08 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 be
paid at average rate as computed in Section 8.11 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.

                             (SEE PAY PLUS ADDENDUM)

                                    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.

                                   ARTICLE VII

                                    SENIORITY

         The COMPANY recognizes the principle of seniority among its employees
and agrees that all layoffs occasioned by lack of work and recalls from layoff
shall be by seniority as herein provided.

                                      -11-
<PAGE>

         7.01 ACCUMULATION OF SENIORITY. 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
                     7.10 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

              G.     When an employee obtains other employment while on an
                     approved leave of absence.

                                      -12-
<PAGE>

         7.03     LAYOFF.

                  A.       When increases or decreases in workforce become
                           necessary, they shall be made on the basis of
                           seniority. IF THE HOURS OF WORK IN ANY CLASS FALL
                           BELOW THIRTY-TWO (32) HOURS PER WEEK FOR A PERIOD OF
                           TWO (2) CONSECUTIVE WEEKS, THE COMPANY WILL LAY OFF A
                           SUFFICIENT NUMBER OF EMPLOYEES TO PERMIT A NEARER
                           NORMAL WORK WEEK.

                  B.       When there is not sufficient work for all employees,
                           probationary employees with less than (60) days
                           seniority, shall first be laid off. If further
                           reduction of the work force is necessary, employees
                           will be laid off in accordance with Section 7.03A.

                  C.       Bumping rights or options will be given first to the
                           most senior person to be laid off. If an employee is
                           not qualified in any classification, they will have
                           the right to bump the least senior employee in the
                           plant.

                  D.       In the event a layoff is necessary, the employee must
                           roll or bump into a position in which he or she can
                           perform without additional training. The maximum
                           number of bumps will be limited to six. The first
                           five bumps will follow the guidelines established in
                           Section 7.03A. The fifth person bumped shall have the
                           right to bump the least senior person in the plant.

                  E.       If a doctor certifies that an employee has a physical
                           disability that prevents such employee from working
                           on his current job without aggravating such
                           condition, or endangering the health or safety of
                           others, such employee will have the right of bumping
                           the least senior employee on the job that the ailing
                           employee can perform without further training.

                  F.       The Company has a right to train employees. When the
                           employee requests training, they shall be paid at
                           their base rate. If the Company mandates training,
                           piecework employees shall receive 85% of their
                           average or base wage which ever is greater and hourly
                           employees shall receive their base wage.

                                    (SEE PAY PLUS ADDENDUM)

                                      -13-
<PAGE>

                     G.     Time allowed for the refreshment of skills will be
                            as follows:

                            Employees who have been off the job:

                            0-29 days            No training allowance
                            30-89 days           4 hours at average
                            90-6 months          8 hours at average
                            6 months - 1 year    24 hours at average
                            1 year - 3 years     40 hours at average
                            3 or more years      Retrain completely

                     The above refreshment of skills shall also apply to Section
                     8.10, Rate for Borrowed Man. (SEE PAY PLUS ADDENDUM)

                     H.     Before Section 7.03 is placed in effect, each
                            employee will be interviewed to determine his/her
                            various skills. At that time, the employee has the
                            option of deleting any skills he/she is no longer
                            interested in performing. We agree that both a
                            COMPANY and a UNION representative will be present
                            at the time of the interview. (Interview to be on
                            COMPANY time.)

                     I.     Any employee who is trained on a new job may not
                            declare himself/herself ineligible for such skill
                            until he/she has made himself/herself available to
                            work in that new job for a period of twelve (12)
                            months after being qualified.

                     J.     Any employee assigned to his/her secondary skill
                            must be assigned to such for a minimum of four (4)
                            consecutive hours. Any assignment less than four (4)
                            hours will be paid at average rate.

                     K.     The borrowed man clause will be available whenever
                            an employee is taken off his/her regular
                            classification for the convenience of the COMPANY
                            when an individual did not request training.

             7.04 RIGHT OF RECALL

                     A.     The Company will return the most senior employee on
                            layoff, provided such employee can successfully
                            perform the work available without additional
                            training. If no one is qualified, the most senior
                            person on layoff will be recalled.

                     B.     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.

                                      -14-
<PAGE>

                     C.     SURPLUS LABOR LIST. 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/her name shall be removed from such
                            list.

                     D.     PROCEDURE IN REPLACING EMPLOYEES ON FORMER
                            CLASSIFICATION

                            1.     The Human Resource Office will check "return
                                   to former classification" file involving
                                   employees presently working in the plant.

                            2.     Failing to find applicants from step "A," the
                                   Human Resource Office will check the surplus
                                   labor list and select employees on the basis
                                   of seniority.

                            3.     Any employee returning to his/her former
                                   classification must remain on that job for a
                                   period of one (1) year before having bidding
                                   rights.

                            4.     Any employee who has a "return to former
                                   classification" form made out and refuses to
                                   accept the former classification when an
                                   opening occurs loses any right to claim that
                                   job as his "former classification" for the
                                   purpose of future recall.

                            5.     An open or vacant job shall be deemed to
                                   exist when a requisition for help is unfilled
                                   by the Human Resource Office through "return
                                   to former classification" or by preference of
                                   the employee on the surplus labor list and
                                   shall be filled as hereinafter set forth.

                     E.     The Company will furnish to the Union, monthly, a
                            current list of all people laid off.

         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

                                      -15-
<PAGE>

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 LAYOFF NOTICE. The Company will give four (4) working hours notice
of a temporary layoff. On a permanent layoff, the Company will give a notice of
two (2) working days. A "temporary" layoff is when an employee is laid off for a
period of more than eight (8) working hours but not exceeding seven (7) calendar
days. A "permanent" layoff is when an employee is laid off for more than seven
(7) calendar days.

         7.08 FURLOUGH. When a temporary reduction in a classification becomes
necessary, the Company will seek volunteers for a furlough, starting with the
most senior employee in the classification. If no volunteers are available,
regular layoff procedures will apply. A furlough may last up to three (3) weeks
and be a minimum of one (1) week. Employees on furlough will be eligible for
unemployment benefits. Employees must continue to pay their portion of the
health benefit contribution while on furlough. In the event there is an opening
in another classification for which there are no employees available in such
classification on surplus labor and provided a senior employee from another
skill group on surplus labor can successfully perform the available work, such
employee will be given an opportunity to return to the active payroll prior to
the hiring of a new employee.

         7.09 EQUALIZATION OF WORK WHEREVER PRACTICABLE. Hours of work
(including overtime hours) will be distributed as equally as practicable among
qualified employees in each classification. If complaints are made, adjustments
in equal distribution of hours of work will be made, as far as practicable,
within periods of three (3) months.

         7.10 PROBATIONARY PERIOD. New employees shall be considered
probationary employees until they have completed the probationary period of
sixty (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 30 days of rehire.

         7.11 RETURN FROM PROMOTION OUT OF BARGAINING UNIT. In the event that an
employee covered by this Agreement is promoted to a supervisory position or to
any other position outside of the bargaining unit, and is thereafter transferred
back into a classification within the bargaining unit, he/she shall be credited
with the amount of seniority which he/she had acquired before promotion, plus
thirty (30) calendar days, but shall not be credited with seniority for the time
spent outside the bargaining unit in excess of the aforementioned thirty (30)
days. He/she shall not be eligible to replace any employee other than the one
with the least seniority in his/her classification to which

                                      -16-
<PAGE>

he/she is returning if his/her seniority so permits. The employee must decide
within six (6) months whether he/she will stay on the job or transfer back to
the bargaining unit.

         7.12 SENIORITY LIST. Upon the execution of this Agreement, a basic
seniority list shall be prepared containing the names of all employees who are
covered by this Agreement and the date of the commencement of their respective
employment. Copies of this seniority list shall be posted on the bulletin
boards, and a copy shall be delivered to the Union. The seniority list shall be
revised from time to time as necessary, and a list of the current additions and
deletions and hires shall be furnished to the Union for the previous month.

         7.13 CHANGE IN UNION REPRESENTATIVES. It is agreed that the Union will
keep the Company notified at all times of the persons who are officers and shop
stewards of the Union.

         7.14 JOB BIDDING PROCEDURES. Any employee with at least six (6) months
seniority shall be entitled to bid on any new or vacated job. Notice of such new
or vacated jobs shall be posted on the bulletin board by the Company for a
minimum of twenty-four (24) hours excluding Saturday and Sunday. The Company
will award the job to the senior bidder. The successful bidder shall have a 48
hour waiting period (excluding Sunday and holidays) from accepting the bid until
transfer to the new job. The successful bidder can refuse to accept the job
awarded in this forty-eight (48) hour period. Union/Company will use a document
that reflects the bidding, job award, job refusal, job transfer requirements,
and employee signature for the action taken.

                  Any person accepting the posted job must remain on that job
twelve (12) months. Rules of seniority shall apply. Any person accepting the
posted job will be given a trial period of at least thirty (30) days provided
he/she shows progressive improvement and, failing to do so, he/she shall be
disqualified in which event he/she may bump the employee with least seniority in
the Plant. If disqualified a second time, he/she shall be laid off and have
his/her name placed on the surplus labor list for a maximum of one (1) year. Any
person who is a successful bidder for an open job and refuses to accept the job
is ineligible to bid for a period of one (1) year. It is understood that
employee(s) who are on vacation at the time a job is posted for bid may have
his/her name entered for bid by the shop steward. If the employee is the
successful bidder and is subsequently laid off , his bidding rights will be
restored.

                  Because of the delays inherent in successive job openings, the
Company may elect to fill, without posting, job vacancies resulting from the
assignment of an applicant to the job originally posted, with this exception:
When an employee successfully bids to a lower-rated job, the opening created by
his/her bidding off will be posted. (This will not apply to lateral bids or bids
to higher-rated jobs.) However, the Company will post a vacated job resulting
from the assignment of an employee to an open job which did not originally
require posting.

         7.15 TRANSFER AFTER SUCCESSFUL BID. Successful job bidders will be
transferred to their new job classification within fifteen (15) calendar days,
provided it does not cause any undue hardship in maintaining existing production
schedules, and provided that they do not involve jobs that take extended
training periods such as pocket machine operators and closers.

                                      -17-
<PAGE>

                  Should the  Company  have a need for  components  or
finished pieces that it is unable to fill because the replacement for the
successful bidder has not been able to produce the required number of pieces, it
is understood that the Company can borrow the successful bidder for a period not
to exceed sixty (60) days during which time the successful bidder will continue
to work on incentive. (SEE PAY PLUS ADDENDUM)

                  The Company and Union committee shall mutually agree on an
extended period to allow the Company sufficient time to train a replacement.

         7.16 IN THE EVENT OF NO BIDDERS. In the event a job is posted for bid
and there are no bidders, the most senior employee on lay-off who is qualified
to perform the posted job duties will be given an opportunity to take the open
job. It is clearly the responsibility of the employee to make known to the
Company his/her desire to identify the job he/she wishes to return to in
writing.

         7.17 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.

         7.18 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.

         7.19 TEMPORARY EMPLOYEES. TEMPORARY EMPLOYEES MAY BE USED FOR POSITIONS
VACANT DUE TO SICK LEAVE, VACATION, UNFILLED AFTER POSTED FOR BID OR SEASONAL
NEEDS. TEMPORARY EMPLOYEES MAY ALSO BY USED FOR SHORT TERM PROJECTS IF NO OTHER
PERMANENT EMPLOYEE IS AVAILABLE TO WORK IN THE SHORT TERM POSITION. TEMPORARY
EMPLOYEES MAY FILL A POSITION FOR UP TO 60 DAYS. AFTER THIRTY DAYS IF THE
POSITION STILL APPEARS TO BE NECESSARY, THE JOB WILL BE POSTED AND FILLED
ACCORDING TO THE PROVISIONS OF THE CONTRACT. PROBATIONARY PERIOD WILL BE WAIVED
FOR TEMPORARY EMPLOYEES HIRED FOR THE PERMANENT POSITIONS IF THEY HAVE WORKED 60
CONSECUTIVE DAYS AS A TEMPORARY FOR THE COMPANY. WHEN A NEED ARISES FOR
TEMPORARY EMPLOYEES THE UNION WILL BE NOTIFIED.

(TEMPORARY EMPLOYEES WILL NOT BE ELIGIBLE FOR BENEFITS.)

                                  ARTICLE VIII
                                      WAGES

         8.01     HIRING RATE.

                  A.       The hiring rate for all new employees shall be $8.00
                           per hour. After thirty (30) days the rate for day
                           workers will be increased by one-dollar ($1.00) and
                           by fifty cents ($.50) for incentive workers. After
                           sixty (60) days, day workers will be brought up to
                           the base rate for the job.

                             (SEE PAY PLUS ADDENDUM)

                                      -18-
<PAGE>

                     B.     TRAINING RATE. The training rate shall be $8.00 per
                            hour.

                            1.     Employees who are recalled, transferred,
                                   bids, bumped or rolled to another incentive
                                   job shall immediately receive the training
                                   rate where such training rate is provided or
                                   his/her incentive earnings for such job,
                                   which ever is higher. Any employee who is
                                   recalled, transferred, bids, bumped or rolled
                                   to a day work job shall immediately receive
                                   the top rate for the classification of said
                                   job.

                            2.     In all cases involving transfer, bid, bump,
                                   roll or promotion, the employee or employees
                                   concerned shall receive a trial period of at
                                   least thirty (30) working days, provided the
                                   employee shows satisfactory progressive
                                   improvements. Such trial period may be
                                   extended by mutual AGREEMENT BETWEEN THE
                                   COMPANY and the UNION. If the employee fails
                                   to show satisfactory improvement and is about
                                   to be disqualified, the UNION will be so
                                   advised immediately. If the employee and the
                                   UNION request an extension of time the
                                   COMPANY will consider such request.

                             (SEE PAY PLUS ADDENDUM)

         8.02 HOURLY RATES. The Company and the Union have agreed upon the
hourly rates of classifications for hourly workers as set forth in Appendix "A"
and the base rates of classifications for pieceworkers as set forth in Appendix
"B."

         8.03 SHOP COMMITTEE MEETINGS. Shop committee meetings or conferences
with any member of said committee, if called or approved by the Company during
working hours, shall be compensated for at the employee's basic rate.

         8.04 GENERAL WAGE INCREASE. EFFECTIVE OCTOBER 16, 2001, THERE WILL BE A
THIRTY-FIVE (.35) CENT PER HOUR ACROSS THE BOARD GENERAL WAGE INCREASE.
EFFECTIVE OCTOBER 16, 2002, THERE WILL BE A THIRTY (.30) CENT PER HOUR ACROSS
THE BOARD GENERAL WAGE INCREASE. EFFECTIVE OCTOBER 16, 2003, THERE WILL BE A
THIRTY (.30) CENT PER HOUR ACROSS THE BOARD GENERAL WAGE INCREASE. THE INCREASE
WILL BE APPLIED TO THE PREVIOUS QUARTERLY AVERAGES AND PAID EFFECTIVE NOVEMBER
1, 2001, NOVEMBER 1, 2002 AND NOVEMBER 1, 2003. ALL BASE RATES, ALL HOURLY RATES
AND ALL LABOR GRADES, EXCLUDING THE $8.00 PER HOUR HIRING RATE, WILL BE
INCREASED.

         8.05 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.

         8.06 ESTABLISHMENT OF NEW CLASSIFICATIONS. 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. When new jobs, split jobs, or combined jobs are created,
preference for filling those jobs will be given to the employees currently
performing those jobs based

                                      -19-
<PAGE>

on their seniority. If no employee who is currently performing those functions
wants to perform the newly defined position, the job will be posted and filled
according to the posting provisions outlined in this Agreement.

         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.

         8.08 RATE FOR BORROWED MAN. When an employee is borrowed for the
convenience of the COMPANY and given a type of work to perform on which he/she
has not been qualified (previously earned incentive rate), then his/her rate
shall be his/her average hourly earnings rate, provided such average rate is
greater than his/her earnings on incentive or the day work rate for the work
being performed. In those cases where an employee is borrowed into a job on
which he/she has previously qualified, his earnings shall be at incentive rate
for that job. The Refreshing of Skills chart will apply to those individuals. An
employee who has been trained on a job may not delete himself/herself from that
job unless it is mutually agreed by both the COMPANY and the UNION.

                  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.

                             (SEE PAY PLUS ADDENDUM)

         8.09 AVERAGE RATE COMPUTATION. 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.

         Any employee who is borrowed for more than 30 days during one quarter
and has not had the opportunity to establish an average in their prime
classification shall have an average established for them based on 125% of the
base rate of their prime classification. An employee who is borrowed for

                                      -20-
<PAGE>

more than thirty days during one quarter and has not had the opportunity to
establish an average in their prime classification, but they have worked on
piecework for 30 days or more, shall have their average based on this piecework.
The employee will be paid this average or the 125% of the base rate of their
prime classification, whichever is higher. (SEE PAY PLUS ADDENDUM)

         An employee who qualifies on a piecework job during the period between
the cutoff date for the computation of averages and the date the new average is
issued, (a period of approximately 4 weeks), will have an average calculation
based on the qualifying piecework during the period between the cutoff date and
the issue date for the new averages each quarter. An employee who qualifies on a
piecework job after the issue date for quarterly averages will have their
average issued during the following quarter.

         8.10 WORK WAIT COMPENSATION

              A.     If, due to absenteeism, mechanical failure, lack of
                     materials, components or supplies, an incentive worker is
                     required to wait for any continuous period of more than ten
                     (10) minutes time and he/she is unassigned to any work,
                     he/she shall be compensated at eighty-five percent (85%) of
                     his/her average hourly earnings for all time lost. (SEE PAY
                     PLUS ADDENDUM)

              B.     If he/she is assigned to other work, he/she shall be
                     compensated at his/her average hourly earnings rate, except
                     when on secondary skill training for a job chosen by
                     employee. In such event, the employee shall receive
                     eighty-five percent (85%) of his/her average hourly rate.
                     (SEE PAY PLUS ADDENDUM)

              C.     It is agreed that the Company shall have no liability
                     regarding the above provisions in the event of a breakdown
                     of power outside the plant or if inside the plant and not
                     maintained by the Company, General Plant Fire, Act of God,
                     Act of Public Enemy, or because of conditions beyond the
                     control of the Company.

              D.     It is agreed that, in the event of one of the occurrences
                     listed in the preceding paragraph, employees will stand by
                     until instructed by the Company to go home or to return to
                     work. If the Company, within sixty (60) minutes after the
                     moment of the occurrence, instructs an employee to go home
                     or to return to work, the employee will be paid base pay
                     for time lost within this sixty (60) minute period. If the
                     Company does not instruct any employee within sixty (60)
                     minutes after the beginning of one of the above occurrences
                     to go home or to return to work, he/she will be paid his
                     average hourly earnings as computed in Section 8.11 above,
                     if an incentive worker and at the hourly day work rate of
                     his classification if a day worker for all time lost from
                     the end of the first minute of one of the above-listed
                     occurrences to the time he/she is either instructed to go
                     home or to return to work.

                                      -21-
<PAGE>

              E.     An hourly employee assigned to fill in on an incentive
                     operation will be paid eighty-five percent (85%) of his/her
                     average daily earnings for work wait, provided that he/she
                     has earned such amount that day on the operation to which
                     he/she is assigned. Should he/she fail to earn such amount,
                     he/she will receive his/her hourly rate for work wait.

         8.11 INJURED DURING WORK

              A.     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 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.

                                      -22-
<PAGE>

         8.12 QUALIFIED INCENTIVE WORKERS. To be qualified, an employee must
attain one hundred percent (100%) of the basic rate for a period of five (5)
continuous days. A utility classification employee or any other employee must
also meet this standard to be an adequate replacement for an absent member of a
team. (SEE PAY PLUS ADDENDUM)

                  No incentive worker will be required to work at piecework with
an employee who has been off that job for more than thirty (30) days until the
employee has had reasonable time to learn the job. Time not to exceed two (2)
working days.

                                   ARTICLE IX

                             STANDARD ALLOWED HOURS

         9.01 INCENTIVE COMPENSATION PLAN. 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. The Standard Allowed Hour System of Payment will
be in effect at the Plant.

         9.02 NEW OR VARIED JOBS AND OPERATIONS. 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

                  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 and 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 work s on a unit for which there is no standard or
standard allowed hour will be paid his/her average hourly rate for such unit.

                                      -23-
<PAGE>

         9.03 STANDARD ALLOWED HOUR. 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>
<CAPTION>
<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)
                                                                       -----
                  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>

                                      -24-
<PAGE>

         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. 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%) 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

                                      -25-
<PAGE>

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.     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.     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.

              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.

                                      -26-
<PAGE>

         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. Whenever a Local Union party to this
Agreement desires to have the International Union designated time study engineer
visit one of the plants 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.

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

                                      -27-
<PAGE>

                                    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
                                    Independence Day
                                    Labor Day
                                    Thanksgiving Day
                                    Friday after Thanksgiving Day
                                    Day before Christmas Christmas Day
                                    Day before New Year's Day

         10.02 ELIGIBILITY. In order to receive holiday pay, an employee must
have sixty (60) days or more of service and must work his/her full regularly
scheduled shift preceding and following the holiday, unless excused by
management for reasonable cause. The Company will pay holiday benefits
consistent with past contract and policy.

         10.03 LEAVE OF ABSENCE. When an eligible employee is on an approved
leave of absence for either pregnancy, illness, accident, or personal reasons
and a paid holiday or holidays occur during this period, he/she shall receive
pay for the first paid holiday occurring after the commencement of such leave of
absence. If an employee's approved leave of absence begins on the day following
a holiday, the employee will be paid for such holiday.

         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.

         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.

                                      -28-
<PAGE>

         10.08 HOLIDAYS ON SATURDAY. The COMPANY agrees 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. Holiday pay will be at eight (8) times the employee's
average hourly earnings rate as computed in section 8.11 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.

         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.

                                   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;

              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 continuous
                     service shall have the option of taking a fourth week of
                     vacation in lieu of the seniority bonus (section 7.18) 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;

                                      -29-
<PAGE>

                     (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 INTERMITTENT VACATION. One (1) week of vacation can be taken at
eight (8) hour intervals (by days) with one (1) week or more notice and
seniority permitting. Time of payment for this week to be determined.

         11.04 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.

         11.05 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.

         11.06 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 3rd
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 can
mutually agree to such with the Operations Manager or the Human Resources
Manager.

                                      -30-
<PAGE>

         11.07 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.

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

                                   ARTICLE XII

                                 INVENTORY WORK

         When employees are selected for inventory work, the selection shall be
made by applying the following factors: (1) length of service; (2)
qualifications (ability to read, write, compute, weigh, and identify the
components and products); and (3) non-volunteers on basis of youngest in
seniority, if qualified. Length of continuous service shall govern where, as
between two or more employees, in the judgment of the Company, the factors in
Item 2 are relatively equal.

                                  ARTICLE XIII

                                LEAVE OF ABSENCE

         13.01 RETURN FROM LEAVE OF ABSENCE. On the return to work of an
employee from a leave of absence for pregnancy, illness, accident, or other
legitimate reason, such employee shall return to his/her original shift and
classification and department and work station (work station does not apply if
sick leave was over twelve (12) months) consistent with Article VII, Seniority,
above. Any employee returning from a leave of absence of more than thirty (30)
days must give two (2) working days advance notice of his/her return.

                                   ARTICLE XIV

                                UIU PENSION TRUST

         UIU 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 UIU
Pension Trust a sum a money in an amount equal to six percent (6%)

                                      -31-
<PAGE>

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 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 UIU 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.

         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

                                      -32-
<PAGE>

and negotiations between the parties entered into, but only as to the subject of
the establishment of other benefits in place of the UIU 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.

Effective November 2001, the Heath Insurance premiums for employees will be as
follows:
<TABLE>
<CAPTION>

EMPLOYEE ONLY COVERAGE                         MEMBER PLUS ONE                       FAMILY
<C>                                            <C>                               <C>
$32.00/month PPO                               $65.00/month PPO                  $90.00/month PPO
$85.00/month Plan E                            $178.00/month Plan E              $234.00/month Plan E
</TABLE>

The cost sharing ratios for any increase in premiums up to the 5% cap shall be
the same as those 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,

                                      -33-
<PAGE>

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. Any
increase up to 5% or decreases in insurance premium contribution costs in the
second and third years will be shared in the same ratio as determined effective
November 1, 2001. 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.

                  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 $46.89 for
sickness and accident coverage and life insurance coverage as provided by The
United Steelworkers Of America Health and Welfare Fund Trust.

                                      -34-
<PAGE>

         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 1994 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.

                  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.

                                      -35-
<PAGE>

                  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.

                                   ARTICLE XVI

                                  JURY SERVICE

         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 8.11 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.

                                      -36-
<PAGE>

                                  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, brother, half
brother, sister, half sister, grandparents, 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. 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 United Steelworkers Of
                            America Health and Welfare and UIU Pension Programs.

         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 Human Resources Manager 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.

                                      -37-
<PAGE>

                                   ARTICLE XIX

                                 MILITARY CLAUSE

         The Company agrees to comply with all applicable laws relating to
re-employment rights of employees called for OR VOLUNTEERING 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

                          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 or where a bona fide seniority or
merit system affects compensation, terms, conditions or privileges of
employment. 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

                                      -38-
<PAGE>

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

                                  ARTICLE XXII

                                  MISCELLANEOUS

         22.01 INFORMATION. The Company agrees to cooperate with the Union
representative on information regarding workers' compensation and unemployment
compensation.

         22.02 SAFETY SHOES. The Company will contribute $2.00 towards the
purchase of safety shoes.

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

         22.04 HAND CLEANER. The Company will furnish the same type of hand
cleaner as the IAM for the following departments: 160 - 225 - 490.

         22.05 SKILLS AUDITS. The Company and Union agree to update Skills
Audits on a timely basis.

         22.06 INCENTIVE SYSTEMS. The Company and Union will discuss incentive
systems for some hourly positions.

                                  ARTICLE XXIII

                                  SAVING CLAUSE

         23.01 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.

         23.02 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.

                                      -39-
<PAGE>

                                  ARTICLE XXIV

                          SEVERANCE AND PLANT CLOSINGS

         In the event the Company decides to close this facility presently
organized by the United Steelworkers of America, 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.

                                   ARTICLE XXV

                      DURATION AND TERMINATION OF AGREEMENT

         25.01. EFFECTIVE DATES. THIS AGREEMENT SHALL BE IN FULL FORCE AND
EFFECT FROM OCTOBER 16, 2001 UNTIL OCTOBER 15, 2004.

         25.02. 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.

         25.03. 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 three (3) years and shall continue to remain in full force and
effect from year to year thereafter, unless written notices 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 XXVI

                               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

                                      -40-
<PAGE>

forty-five (45) days prior to the implementation date of the Pay Plus Plan at
the Columbus 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 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 XXVI OF THE
LABOR AGREEMENT WITH A TERM OF 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 XXVI CONTRACT RE-OPENER AND THE MARCH 30, 1999 COLUMBUS
PLANT "PAY PLUS BONUS" LANGUAGE DURING THE TERM OF THE NEW SUCCESSOR AGREEMENT
AND WHEN A NEW PAY PLAN IS INTRODUCED THE PARTIES WILL ABIDE BY THE TERMS AND
CONDITIONS OF ARTICLE XXVI 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.

                                      -41-
<PAGE>

         IN WITNESS WHEREOF, the parties hereunto set their hands and seals as
hereinbefore stated, this 20th day of February, 2002.

THE UNITED STEELWORKERS OF                  SIMMONS COMPANY
AMERICA, AFL-CIO, CLC
<TABLE>
<S>                                             <C>
ON BEHALF OF ITS LOCAL UNION #424

--------------------------------------------      ----------------------------------------
Leo W. Gerard                                     Rhonda Rousch
International President                           Sr. Vice President, Human Resources

--------------------------------------------      ----------------------------------------
James English                                     Dan Murphy
Secretary/Treasurer                               Constangy, Brooks & Smith

--------------------------------------------      ----------------------------------------
Richard H. Davis, International                   Andy Cuppia
Vice-President Administration                     VP of Operations, Eastern Division

--------------------------------------------      ----------------------------------------
Leon Lynch, International                         Barry Williamson
Vice-President, Human Affairs                     Operations Manager

--------------------------------------------      ----------------------------------------
David McCall, District 1 Director                 Wendy Tullis
                                                  Human Resources Manager
--------------------------------------------
David Caldwell, District 1 SubDirector

--------------------------------------------
Billy Boyce, District 1 Staff Representative

--------------------------------------------
John Marcum, President Local 424

--------------------------------------------
Rick Roberts, VP, Local 424

--------------------------------------------
Christina Hardy, Financial Secretary, Local 424

--------------------------------------------
Randy Ater, Guard, Local 424
</TABLE>

                                      -42-
<PAGE>

                                    COLUMBUS
                     [SEE PAY PLUS BONUS ADDENDUM FOR RATES]

                                  APPENDIX "A"
                            RATES FOR HOURLY WORKERS
<Table>
<Caption>
JOB DESCRIPTION                    CODE    10/16/01         10/16/02         10/16/03
-------------------------------------------------------------------------------------
<S>                             <C>        <C>             <C>               <C>
Fork Lift Truck Operator           D-1      11.32             11.62            11.92
Truck Checker                      D-2      11.27             11.57            11.87

Utility Receiving                  D-4      11.35             11.65            11.95

Material Handlers-Heavy            D-5      11.10             11.40            11.70
 (frames, springs, etc.)

Janitors                           D-7      11.03             11.33            11.63

Truck Checkers &
  Loaders Shipping                 D-8      11.27             11.57            11.87

Storekeeper-Cover Cage             D-9      11.35             11.65            11.95

Fold & Inspect Covers, etc.        D-11     11.03             11.33            11.63

Sort & Stack                       D-12     11.25             11.55            11.85

Inspector, 1st Class
 Finish Product                    D-13     11.28             11.58            11.88

Repair Mattress (Closer)           D-15     11.33             11.63            11.93
</Table>

                                      -43-
<PAGE>

                                    COLUMBUS

                          [SEE PAY PLUS BONUS ADDENDUM]

                                  APPENDIX "A"

                              HOURLY RATE EFFECTIVE

 JOB DESCRIPTION           CODE    10/16/01       10/16/02   10/16/03
----------------------------------------------------------------------
 Repair Mattress &
  Box Spring                D21      11.08         11.38       11.68

 Utility-Cut & Sew          D-22     11.34         11.64       11.94

 Cutter Mattress & Box      D-24     11.03         11.33       11.63

 Hem/Double Overcast
  Borders                   D-37     11.03         11.33       11.63

 Inventory-Heavy (frames,
    Springs, etc.)           D-45    11.18         11.48       11.78

 Inventory-Light (covers,
  borders, thread, etc.)     D-46    10.88         11.18       11.48

 Lead Inspector &
    Coordinator              D-47    11.10         11.40       11.70

 Construction Opener         D-50    11.20         11.50       11.80

 Inspector/Packer            D-53    11.49         11.79       12.09

                                      -44-
<PAGE>

                                    COLUMBUS
                          [SEE PAY PLUS BONUS ADDENDUM]
                                  APPENDIX "B"
                             PIECEWORK BASIC TIMING
                                 RATE EFFECTIVE

JOB CLASS                   CODE
--------------------------------

DEPARTMENT 105-BORDER                       10/16/01    10/16/02     10/16/03
001     Mattress Border
        Machine Operator           B-1      10.75        11.05         11.35

002     Operate Bechik
        4-hold punch with
        hand switch or
        foot pedal                 B-2      10.53        10.83         11.13

003     Attach handles to
        border (other than
        Bechik)
DEPARTMENT 115-CUT & SEW
        Sew & tape mattress &
        box spring cover,
        match dot fasteners        S-2       9.96        10.26         10.56

050     Sew panels to border matt
054     Sew box spring panels to border
058     Sew welt to panel or borders
        Sew labels, hem
        panels, & overcast         S-3      10.59        10.89         11.19

048     Sew labels to matt &
        box spring panels
049     Overcast
055     Hemming
057     Overcast & sew Osnaburg
        (Galkin Machine)           S-4      10.59        10.89         11.19

DEPARTMENT 120-QUILT
Quilt Machine Operator            D-48      10.33        10.63         10.93

DEPARTMENT 150-BOX SPRING
008     Top Off                    X-1      10.79        11.09         11.39

                                      -45-
<PAGE>

                                    COLUMBUS

                          [SEE PAY PLUS BONUS ADDENDUM]

                                  APPENDIX "B"
                             PIECEWORK BASIC TIMING
                                 RATE EFFECTIVE
<Table>
<Caption>
JOB CLASS         JOB DESCRIPTION          CODE       10/16/01      10/16/02     10/16/03
-----------------------------------------------
<S>              <C>                       <C>       <C>           <C>            <C>
009               Fill, upholster & trim
                  Box Spring                X-2         10.56         10.86       11.16
                  Pre-Loader                X-4         10.20         10.50       10.80

DEPARTMENT 130-MATTRESS
                  Close mattresses,
                  all types                 M-1         10.62         10.92       11.22

089               Close mattress on
                  closing machine
098               Close Beautyrest(R)
                  on closing machine
062               Pocket Machine Operator
                  (Beautyrest(R))           M-5        10.02          10.32       10.62
063               Assemble Beautyrest(R)
                    Construction            M-6         9.63           9.93       10.23

                  Hog ring panel
                  to construction           M-7        10.62          10.92       11.22

087               Hog ring open coil
096               Hog ring Beautyrest(R)

DEPARTMENT 04-WOOD ROOM

                  Assemble box
                  spring frames             W-1        10.87          11.17      11.47

016               Radius Box spring
                  corners

019               Assemble & nail box
                  spring frames
                  (Pneumatic nailer)

015               Nailing Machine           W-3        10.86          11.16      11.46
</TABLE>

                                      -46-
<PAGE>

                                    COLUMBUS

                                  APPENDIX "C"

                      ARBITRATORS FOR EXPEDITED ARBITRATION

                               GENERAL ARBITRATORS

                  SIX (6) ARBITRATORS WILLING TO ABIDE BY THE TERMS OF THE
EXPEDITED ARBITRATION PROVISION OF THIS AGREEMENT WILL BE SELECTED BY THE
PARTIES. EACH PARTY WILL SELECT THREE (3). OF THE THREE (3), ONE (1) MUST BE A
QUALIFIED TIME-STUDY ENGINEER.

                        SIMMONS COMPANY - COLUMBUS PLANT
                            PAY PLUS BONUS - ADDENDUM
                                  March 30 1999

In accordance with Article XXVI of the collective bargaining agreement between
the parties, the Company and the Union agree to change the individual incentive
plan to a group incentive to be known hereinafter as the pay Plus Bonus plan
(PPB). It is agreed that this new system will take effect on date to be
determined.

The purpose of implementing a new pay system is to align pay practices with
company goals and objectives in the areas of Quality, Productivity and Customer
service. The company proposes to make this change with no negative impact on pay
as long as plant performance does not fall below current level pf performance
which is established at 19% (4% Quality, 8% Productivity, and 7% Customer
Service.) Base Rates and bonus levels were designed to accomplish this.

         I. Defining Bonus Eligibility:

Levels One and Two are direct labor positions. Employees performing this work
will be eligible to earn full plant bonus each week plus base rate. They must
meet minimum requirements for their position before reaching "qualified status"
and moving from "New Hire" rate to minimum rate of the job level. Employees
whose disciplinary action under the progressive disciplinary procedure.
Employees who exceed minimum performance levels on a consistent basis may
receive a base rate adjustment as defined under "Rate Adjustment Section."

Level Three are indirect labor positions. These employees will earn plant bonus
for each week in excess of 19% which is considered the bonus hurdle. The 19% is
bonus for achieving a 98% rating on customer service, a 94% Quality Score and an
average of 8%bonus on productivity over the past 12 week. Indirect employees
under Pay Plus earn a bonus for any improvement in current plant performance.
Baseline performance in Columbus =

                                      -47-
<PAGE>

Quality 94%; Customer service 98%; and Productivity at average during the past
12 weeks of 8% bonus. In the event that the plant bonus falls at or below 19%,
indirect employees receive their base rate pay.

New Hires: An hew hire receives a hiring rate of $8.00 Per hr. with interim
increase as specified in the contract. When they complete specified training
period they receive the rate of the job in level three or the minimum of the
range in levels one or two plus appropriate bonus for the assigned level.

         II. Definitions:

Classification - defined by the current job titles as listed n Appendix A under
this addendum.

Level - Established payroll groupings defined in the PPB proposal as 1, 2, 3, &
4 in appendix A.

Range - define minimum, mid-point and maximum pay rates for Levels 1 and 2.

Drop - means moving from Level 1 to 2, 1 to 3, and 2 to 3.

Moving up - means moving from level 2 to 1, 3 to 1 and 3 to 2.

         III. Establishment of base rates from movement between job
classifications and levels:

              A.     An existing employee who changes his/her classifications
                     that involves a drop from Level one to level two would
                     retain his/her current base rate or the midpoint of the new
                     range, whichever is lower.

                     An employee who drops to a Level three position will
                     receive the base rate for the position plus the level three
                     bonus.

              B.     An existing employee who changes his/her classification
                     that involves moving up from one pay level to another would
                     receive a $.50 increase to his/her current base rate or the
                     minimum of the new range (whichever is higher). The
                     employee must qualify on the new job prior to receiving a
                     base rate increase.

              C.     An existing employee who moves from classification to
                     classification within a pay level (Levels 1 & 2) would
                     remain at his/her current base rate. Rate Adjustments would
                     be considered as described in Section entitled "Base Rate
                     Changes for Newly Hired, Transferred or Existing
                     Employees."

                                      -48-
<PAGE>

       IV.    Base Rate Changes for Newly Hired, Transferred, or Existing
              Employees:

Level 1 and 2 employees may petition the Company for a base rate increase of
$.50. A request should be submitted to the Company by the Union for a
performance evaluation that will involve a review of that individual's
performance based upon the individual skills defined in the PPB program
(Quality, Productivity, Customer Service.)

An individual's base rate can be adjusted based on the following: Achieving a
productivity rate of 29% greater than his/her current standard of productivity
and maintaining that rate for 60 days; having no documented quality counseling
during previous 60 days; and having no documented attendance warnings.

All requests for reevaluation may be made no more than three times during the
year with no less than three (3) months between requests.

       V.     Any one employee can have up to a maximum of three (3) additional
              skills. Each additional skill will receive a twenty-five (.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." EMPLOYEES WITH MULTI-SKILLED
              POSITIONS AND PAY AS OF OCTOBER 15, 2001 WILL NOT LOSE THEIR
              STATUS OR PAY AS LONG AS THEY MAINTAIN THEIR SKILLS. IT IS THE
              COMPANY'S INTENTION TO EVENTUALLY HAVE AT LEAST EIGHT INDIVIDUALS
              PER SHIFT WHO WILL BE ELIGIBLE FOR "MULTI-SKILLED EMPLOYEE"
              STATUS.

       A bid shall be posted for a "Multi-skilled Employee" for a particular
       job. Bidding procedures will be followed as defined in the Columbus
       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 no to
       exceed two (2) weeks. This applies only to the bid process for
       multi-skilled positions.

       If more than 16 qualified employees respond to posting, company will use
       rule of seniority for selection.

       The Company agrees there will be no upward assignments, only lateral
       (within level) or downward (down level) movements for employees other
       than multi-skilled employees.

                          CHANGES TO EXISTING CONTRACT
                                    ARTICLES:

       3.07 Second paragraph - change "Base rate on a new classification" to
"job level and pay range."

4.06 G  Delete

4.08   Reference to pay at average does no apply under pay plus . Employee would
       receive his/her base rate plus bonus.

                                      -49-
<PAGE>

7.03F  This paragraph is replaced by "Pay for Skill" language.

7.03G  Agree to delete last sentence - does not apply.

7.03J  Agree this paragraph does not apply under PPB

7.03K  Agree to delete - does not apply

7.09   Equalization of work wherever Practicable - Company agreed under the Pay
       Plus Environment that it would consider fairness as intended in this
       article. Company further agreed if there is an issue we will meet with
       the Union to discuss.

7.15   Second paragraph does not apply under Pay Plus

8.01   A, B (i) and B (ii) - Hiring Rate:

This section is replaced by Section I of the Pay Plus Addendum.

8.02   Rates and Pay levels for all classifications are addressed in APPENDIX A
       of the Pay Plus Addendum.

8.03   Change "basic" to "base."

8.04,  8.05, 8.06, 8.07 - Clean up reference to "incentive and Hourly."

8.09   Change "rate" to "job level and pay range."

8.10   Delete - Does not apply under pay plus

8.11   First paragraph - Delete reference to "incentive classification"

       Third paragraph - Does not apply

       Last paragraph - Does not apply

8.12   Delete A & B

Last paragraph addressed under "Pay for Skill" in Addendum

8.13   Delete reference to incentive and hourly

8.14   First paragraph - replace basic rate with "minimum standard."

Second paragraph - Does not apply

ARTICLE IX - See revised Article IX attached.

                                      -50-
<PAGE>

10.09, 11.02, Article XIV, 17.02 - Delete reference to incentive and hourly

22.06  Does not apply under Pay Plus.

NOTE:

Company and Union agree that any other contract references to "Incentive or
Hourly" which are not noted above would also not apply under Pay Plus.

Company agrees that all 1997 contract language no specifically changed herein
will remain intact as written.

Company agrees to a sixty-day guarantee of rates from the start date of Pay
Plus. Employees during that time will receive the higher of their current
average or rate of pay or the new pay plus pay.

PAY PLUS PRODUCTIVITY IMPROVEMENT COMMITTEE:

The Union and Company agree to form a committee consisting of five Union and
five Company representatives , those members selected by the Union and Company
respectively at their discretion. This committee will meet as needed but no less
than once a month. The purpose of this committee is to present and discuss
issues concerning communication, problem resolution, opportunities for
improvement and the like.

                            PAY PLUS BONUS - ADDENDUM
                                   APPENDIX A

                        CLASSIFICATION AND RATE SCHEDULE
                        SIMMONS COMPANY - COLUMUBS PLANT
                              PAY PLUS BONUS RATES
             As of October 16, 2001 (First added on March 30, 1999)

                        Production Positions - Pay Levels

Level 1:  Range - Min   $11.95    Mid    $14.20    Max  $16.45
          Quilt Operator/Double Overcaster
          Closer
          Coil Operator

Level 2:  Range - Min  $10.45   Mid  $ 12.20    Max  $ 13.95
          Quilt Utility
          Pillow Top Sewer/Blindstich
          Overcaster
          Hog Ring
          Boxspring Sewer
          Boxspring Top Off

                                      -51-
<PAGE>

          Boxspring Upholstery
          Boxspring Framer
          HMB Operator
          Bechick Operator

Level 3:  Range - Rate of the Job
          Group (a)        $11.10
                           Cutter
                           Janitor/Baler
                           Fold & Inspect covers
                           Lead Inspector & Coordinator
         Group (b)         $11.32
                           Receiving:
                           Construction Opener
                           Fork Lift operator
                           Truck Checker
                           Shipping:
                           Truck Loaders
                           Sort & Stack
         Group ( c)       $11.49
                           Utility
                           Inspector/Packer
                           Material Handlers - heavy

Level 4:  Pay Rate $8.00
         New Hires

Light Duty Rate:
         Quarterly Average

Pay Rate for Vacation/Holiday/Other Paid Leave
         Current Quarterly Average Rate

Notes:

       1. Level 3. Employees never earn lower than their present base rate as
defined in appendix A of Pay Plus addendum. They receive plant bonus when Plant
Performance Exceeds 19% Hurdle.

       2. Company has agreed to establish a new classification called "Quilt
Utility." This will combine "Labeler" , "repair, "service", one inspector and
one utility. This will be a Level 2 job. Level 3 employees currently in level3
will go to the minimum rate of Level 2 and receive plant-wide bonus plus base
rate.

       3.     Company has agreed to establish a new classification combining
              quilt machine operators and double overcasters. This will be a
              Level 1 job. Existing double overcasters will move to Level 1 at
              the maximum of the range ($16.45) as the base rate.

                                      -52-
<PAGE>

       4.     Recall rights for employees currently eligible for recall> These
              employees may be recalled with base rates set as for existing
              employees entering Pay Plus startup.

PAY RANGES:

         LEVEL 1

                           11.95    14.20   16.45
         LEVEL 2
                           10.45    12.20   13/95
         LEVEL 3
(A)      11.10
(B)      11.32
(C)      11.49

                         ADDENDUM - "REVISED ARTICLE IX"

9.01   INCENTIVE COMPENSATION PLAN. 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. Effective
       September 1, 1998, the Standard Allowed Hour system used to establish
       individual incentive earnings opportunities was replaced with the Pay
       Plus Bonus program which provides for a plant-wide incentive opportunity
       base on quality, productivity, and customer service performance. SAH
       calculations will continue to be used to compute plant wide productivity
       under this program

With not less than forty-five (45) day written notice to the Union, the Company
may change back to the 12997 contact's Incentive Compensation language.

9.02.  NEW OR VARIED JOBS AND OPERATIONS. If a new job, new operation, or
       variation of an existing operation is set up, the supervisor shall notify
       the shop steward and the operations experience time shall begin on the
       date of this notification.

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 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 other specific job.

9.03.  Replace with PPB information packet labeled Col. P.P.B. Addendum & D.C.
       "Exhibit A."

                                      -53-
<PAGE>

9.04   PROCEDURAL INTERPRETATION OF SECTION. Current standards are guaranteed
       unless the Company makes a change in method, means, process, equipment,
       production condition, or product design. Where such change results in and
       addition to the standard task time, and adjustment will be made to
       proportionately reflect the change.

In this instances where the change results in greater output, the time will be
proportionally 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
minute, the Company will use standard data from its back of appropriate basic
time study standards in determining the new task time reflecting the change. The
company may re-study the operation in those instances where the elements of work
affected by the revised method exceed five percent (5%) 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.

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.

9.05     GRIEVING CHANGES IN STANDARD

(Replaces A & B)

                     A.     If there is a change in any standard, the Company
                            will provide the Union with the methods description
                            at the time the change is made effective. The Union
                            has thirty (30) days to grieve the new standard and
                            if not grieved with thirty days, the Union will lose
                            the right to grieve and/or arbitrate the new
                            standard. A resolution of grievances over incentive
                            standards shall be retroactive to the date the
                            protested standard was originally submitted.

C & D (unchanged)

                                      -54-
<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. 424, and Simmons Company have entered into a collectively bargained
Labor Agreement commencing October 15, 2001 through October 15, 2004, for
certain employees at its plant located at Columbus, Ohio;

       WHEREAS, effective December 31, 2001, the Simmons Company employees
represented by Local No. 424 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. 424, 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. 424

Dated this _____ day of February 2001.

                                      -1-<PAGE>

                                                                  EXHIBIT 10.34

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT is made as of July 15, 2001 (the "EFFECTIVE
DATE") between Simmons Company, a Delaware corporation (the "COMPANY"), and Mark
Parrish (the "EXECUTIVE").

         WHEREAS, the Executive is possessed of certain experience and expertise
in management; and

         WHEREAS, subject to the terms and conditions hereinafter set forth, the
Company wishes to employ the Executive.

         NOW, THEREFORE, the parties agree as follows:

1.       EMPLOYMENT.

         1.1. AGREEMENT. The Company hereby agrees to employ the Executive, and
the Executive hereby agrees to serve the Company, in each case subject to the
terms and conditions set forth herein.

         1.2. TERM. The employment of the Executive by the Company under this
Agreement shall be for the period commencing on the Effective Date and expiring
on the date on which termination of employment is effective pursuant to the
provisions of Section 8 (the "TERMINATION DATE"). For all purposes of this
Agreement, references to the "term" of the Executive's employment hereunder
shall mean the period commencing on the Effective Date and ending on the
Termination Date.

2.       POSITION AND DUTIES. The Executive shall serve as Executive Vice
President and Chief Operations Officer of the Company, and shall be accountable
to, and shall have such powers, duties and responsibilities as may from time to
time be prescribed by, the Board of Directors of the Company (the "BOARD") or
the President of the Company (the "PRESIDENT"). The Executive shall perform and
discharge, faithfully, diligently, competently and in good faith such duties and
responsibilities. The Executive (a) shall devote all of his business time and
attention and his best efforts and ability to the business and affairs of the
Company and its Subsidiaries and (b) shall not engage in other business
activities whether or not compensated during the term of this Agreement without
prior written consent of the Board; provided, however, that it shall not be a
violation of this Agreement for Executive to (i) devote reasonable periods of
time to public speaking activities, if Executive notifies the Board or the
president of the Company in advance of such activities, and/or (ii) continue to
serve on the Board of Directors of MW Manufacturers. The services of the
Executive shall be performed at the offices of the Company in the Metropolitan
Area; PROVIDED, HOWEVER, that the Executive acknowledges that substantial travel
will be required in view of the fact that the Company conducts operations and
maintain facilities throughout the United States and elsewhere around the world.

<PAGE>

3.       COMPENSATION. Subject to all of the terms and conditions hereof and to
the performance by the Executive of his duties and obligations to the Company:

         3.1. SALARY. As compensation for services performed during the term of
his employment hereunder, the Company shall pay the Executive a salary at a rate
of $250,000 per annum or such other higher amount as may from time to time be
established by the Board (such annual rate of salary in effect from time to time
being referred to as, the "SALARY"). The Salary shall be payable in accordance
with the regular payroll practices of the Company. Except as otherwise provided
in this Agreement, the Salary shall be prorated for any period less than a full
year.

         3.2. ANNUAL BONUS. As additional compensation for services hereunder,
the Executive shall be eligible for a bonus for each Bonus Year commencing on
the first day of each fiscal year and ending on the last day of the term hereof.
The target bonus payable for any Bonus Year shall equal 60% of the Salary (the
"TARGET BONUS") upon 100% achievement of Board-specified targets, with an amount
equal to 4% of Salary for each 1% achievement over such targets. The actual
amount of any such bonus payable with respect to any Bonus Year shall be based
upon the Company's achievement of specified performance targets set by the Board
for such Bonus Year, as set forth on Exhibit A hereto. Such performance targets
will be determined and set by the Board at the beginning of each Bonus Year as
set forth on Exhibit A and will be based upon various performance measures such
as EBITDA and sales. Any bonus payable under this Section 3.2 is referred to
herein as an "ANNUAL BONUS".

         3.3. STOCK OPTIONS. As soon as practicable after the date hereof, the
Company shall grant to the Executive under the Company's 1999 Stock Option Plan
(the "OPTION PLAN") stock options (the "STOCK OPTIONS") to purchase shares of
Common Stock of Holdings, 200,000 of which will be Regular Options (as defined
in the Stock Option Certificate) and 75,000 of which will be Superincentive
Options (as defined in the Stock Option Certificate). Contingent upon the
Executive's achievement of specific performance-based targets to be established
by the President and approved by the Compensation Committee of the Board for
fiscal year 2001, the Company shall issue an additional 25,000 Superincentive
Options to the Executive (the "ADDITIONAL OPTIONS") within 15 days of the
release of the audited financial statements of the Company for the 2001 fiscal
year. The Stock Options and the Additional Options will have an exercise price
of $7.15 per share of Common Stock. The Stock Options and the Additional Options
will be issued pursuant to stock option certificates in substantially the form
of Exhibit B (the "STOCK OPTION CERTIFICATES"). The Stock Options and the
Additional Options will vest on the schedule specified in, and in accordance
with the terms of, the Stock Option Certificates and will be subject to the
terms of the Option Plan, PROVIDED, HOWEVER, that for the sole purpose of
calculating the vesting with respect to the Stock Options and the Additional
Options, the Executive will be presumed to have commenced employment with the
Company as of the first day of fiscal year 2001. Notwithstanding the foregoing
provisions of this Section 3.3, in the case of a conflict between this Section
3.3 and the Stock Option Certificates, the Stock Option Certificates shall
govern.

         3.4. BUSINESS AND TRAVEL EXPENSES. During the term of his employment
hereunder, the Executive shall be entitled to receive prompt reimbursement by
the Company for all reasonable business expenses incurred by him on behalf of
the Company or any of its Subsidiaries or Affiliates (in accordance with the
policies and procedures established by the Board from time to

                                     - 2 -
<PAGE>

time for the Company's executive officers) in performing services hereunder;
PROVIDED, HOWEVER, that the Executive shall properly account therefor in
accordance with requirements for federal income tax deductibility and the
Company's policies and procedures.

         3.5. AUTOMOBILE STIPEND. During the term of his employment hereunder,
the Executive shall be entitled to a stipend of at least an aggregate amount of
$750.00 per month, to cover the expenses associated with leasing or owning an
automobile; PROVIDED, HOWEVER, that the Executive shall properly account
therefor on his federal and applicable state tax returns and related
documentation in accordance with the requirements for federal income tax
deductibility and the Company's policies and procedures.

         3.6. FORGIVENESS OF LOANS. As of July 15, 2001, the Company agrees to
forgive $54,905 of aggregate principal amount of loans (and any accrued interest
on such amount) owed by the Executive to the Company. Contingent upon the
Executive's continued employment by the Company hereunder through July 15, 2002,
on July 15, 2002, the Company agrees to forgive $54,905 of aggregate principal
amount of loans (and any accrued interest on such amount) owed by the Executive
to the Company. In addition to the foregoing, the Company shall reimburse the
Executive for any amount (computed at the highest applicable marginal tax rate)
of federal, state and local income taxes for which the Executive is liable on
account of the loan forgiveness set forth in this Section 3.6.

         3.7. FRINGE BENEFITS. The Executive shall be entitled to participate in
or receive benefits under any life insurance, health and accident plans,
retirement plans and other similar fringe benefit arrangements made generally
available by the Company to its executives and key management employees, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements and to the extent not duplicative
of the benefits provided to the Executive under this Agreement. Notwithstanding
any other arrangements that the Company may make available from time to time to
its other executives or key management employees, the Salary, the bonuses
payable under this Agreement and any stock options granted by the Company to the
Executive in accordance with the Agreement shall be in lieu of the Executive's
participation in any other bonus, equity incentive or equity-type incentive
plans established by the Company, except that the Executive shall be entitled to
participate in any supplemental executive retirement plans, "401(k) plans" and
profit sharing plans.

         3.8. VACATION. The Executive shall be entitled to 20 days of paid
vacation each year.

4.       OFFICES; SUBSIDIARIES AND AFFILIATES.

         4.1. GENERALLY. The Executive agrees to serve during the term of his
employment hereunder, if elected or appointed thereto, in one or more positions
as an officer or director of the Company or any of its Subsidiaries or
Affiliates, or as an officer, trustee, director or other fiduciary of any
pension or other employee benefit plan of the Company or any of its Subsidiaries
or Affiliates. Service in such additional positions will be without additional
compensation except for reimbursement of reasonably related business expenses on
the same terms as provided elsewhere in this Agreement.

                                     - 3 -
<PAGE>

         4.2. INDEMNIFICATION. The Company agrees that in connection with the
Executive's service in additional positions as provided under Section 4.1, the
Executive shall be entitled to the benefit of any indemnification provisions in
the charter and by-laws of the Company and any of its Subsidiaries and
Affiliates for which the Executive serves in such an additional position and any
director and officer liability insurance coverage carried by the Company and any
of its Subsidiaries and Affiliates for which the Executive serves as an officer
or director; PROVIDED, HOWEVER, that this Section 4.2 shall not impose on the
Company or any of its Subsidiaries or Affiliates any obligation to include any
such indemnification provisions in its charter or by-laws or to maintain any
such insurance coverage.

5.       UNAUTHORIZED DISCLOSURE; INVENTIONS.

         5.1. CONFIDENTIAL INFORMATION. The Executive acknowledges that the
Company and its Subsidiaries and Affiliates continually develop Confidential
Information, that the Executive may develop Confidential Information for the
Company or its Subsidiaries or Affiliates and that the Executive may learn of
Confidential Information during the course of employment. The Executive will
comply with the policies and procedures of the Company and its Subsidiaries and
Affiliates for protecting Confidential Information and agrees not to disclose to
any Person (except as required by applicable law or for the proper performance
of his duties and responsibilities to the Company and its Subsidiaries and
Affiliates), or use for his own benefit or gain, any Confidential Information
obtained by the Executive incident to his employment or other association with
the Company or any of its Subsidiaries or Affiliates. The Executive understands
that this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination.

         5.2. PROTECTION OF DOCUMENTS. All documents, records, tapes and other
media of every kind and description relating to the business, present or
otherwise, of the Company or its Subsidiaries or Affiliates and any copies, in
whole or in part, thereof (the "DOCUMENTS"), whether or not prepared by the
Executive, shall be the sole and exclusive property of the Company or its
Subsidiaries or Affiliates. The Executive shall safeguard all Documents and
shall surrender to the Company at the time his employment terminates, or at such
earlier time or times as the Board or its designee may specify, all Documents
then in the Executive's possession or control.

         5.3. PROPRIETARY RIGHTS. Any and all inventions, discoveries,
developments, methods, processes, compositions, works, supplier and customer
lists (including information relating to the generation and updating thereof),
concepts and ideas (whether or not patentable or copyrightable) conceived, made,
developed, created or reduced to practice by the Executive (whether at the
request or suggestion of the Company or otherwise, whether alone or in
conjunction with others, and whether during regular hours of work or otherwise)
during the term of his employment by the Company and for one year thereafter,
which may be directly or indirectly useful in, or related to, the business,
ventures or other activities of or products manufactured or sold by the Company
or any of its Subsidiaries or Affiliates or any business or products
contemplated by the Company or any of its Subsidiaries or Affiliates while the
Executive was or is an employee, officer or director of the Company
(collectively, "PROPRIETARY RIGHTS"), shall be promptly and fully disclosed by
the Executive to the Board and shall be the exclusive property of the Company as
against the Executive and his successors, heirs, devisees, legatees and assigns,
and the Executive hereby assigns to the Company his entire right, title and
interest therein and shall promptly deliver to the Company all papers, drawings,
models, data and

                                     - 4 -
<PAGE>

other material relating to any of the foregoing Proprietary Rights conceived,
made, developed, created or reduced to practice by him as aforesaid. All
copyrightable Proprietary Rights shall be considered "works made for hire." The
Executive shall, upon the Company's request and without any payment therefor,
execute any documents necessary or advisable in the opinion of the Company's
counsel to assign, and confirm the Company's title in, his entire right, title
and interest in the foregoing Proprietary Rights and to direct issuance of
patents or copyrights to the Company with respect to such Proprietary Rights as
are the Company's exclusive property as against the Executive and his
successors, heirs, devisees, legatees and assigns under this Section 5.3 or to
vest in the Company title to such Proprietary Rights as against the Executive
and his successors, heirs, devisees, legatees and assigns, the expense of
securing any such patent or copyright, however, to be borne by the Company.

6.       RESTRICTED ACTIVITIES.  The Executive agrees that some restrictions on
his activities during and after his employment are necessary to protect the
goodwill, Confidential Information and other legitimate interests of the Company
and its Subsidiaries and Affiliates:

         6.1. NON-COMPETITION.

                  6.1.1. While the Executive is employed by the Company and for
         a period which is one year immediately following termination of his
         employment (the "NON-COMPETITION PERIOD"), the Executive shall not,
         directly or indirectly, whether as owner, partner, investor,
         consultant, agent, employee, co-venturer or otherwise, compete with the
         Company or any of its Subsidiaries or Affiliates within the United
         States in any Competitive Business or undertake any planning for any
         Competitive Business.

                  6.1.2. Without limiting the generality of the foregoing,
         during the Non-Competition Period, the Executive will not solicit or
         encourage any Person who is or was a customer of the Company or any of
         its Subsidiaries or Affiliates and with whom the Executive has had any
         contact, to terminate its relationship with any of them, or to conduct
         with any other Person any business or activity which such customer
         conducted or could conduct with the Company or any of its Subsidiaries
         or Affiliates.

         6.2. OUTSIDE ACTIVITIES. The Executive agrees that, during his
employment with the Company, he will not undertake any outside activity, whether
or not competitive with the business of the Company or any of its Subsidiaries
or Affiliates, that could reasonably give rise to a conflict of interest or
otherwise interfere with his duties and obligations to the Company or any of its
Subsidiaries or Affiliates; provided, however, that it shall not be a violation
of this Agreement for Executive to (i) devote reasonable periods of time to
public speaking activities, if Executive notifies the Board or the president of
the Company in advance of such activities, and/or (ii) continue to serve on the
Board of Directors of MW Manufacturers.

         6.3. NON-SOLICITATION OF EMPLOYEES.

                  6.3.1. Acknowledging the strong interest of the Company in an
         undisrupted workplace, the Executive further agrees that while he is
         employed by the Company and for a period which is one year immediately
         following termination of his employment (the "NON-SOLICITATION
         PERIOD"), the Executive will not hire or attempt to hire any employee
         of

                                     - 5 -
<PAGE>

         the Company or any of its Subsidiaries or Affiliates for employment by
         the Executive or any other Person.

                  6.3.2. During the Non-Solicitation Period, the Executive will
         not assist in such hiring by any Person.

                  6.3.3. During the Non-Solicitation Period, the Executive will
         not seek to persuade any employee of the Company or any of its
         Subsidiaries or Affiliates to discontinue employment with the Company
         or any of its Subsidiaries or Affiliates.

                  6.3.4. During the Non-Solicitation Period, the Executive will
         not solicit or encourage any independent contractor providing services
         to the Company or any of its Subsidiaries or Affiliates to terminate or
         diminish its relationship with the Company or any of its Subsidiaries
         or Affiliates.

         6.4. OWNERSHIP OF SECURITIES. Notwithstanding the provisions of this
Sections 6, the Executive shall have the right to acquire as a passive investor
(with no involvement in the operations or management of the business) up to 1%
of any class of securities which is (a) issued by any Person engaged in a
Competitive Business and (b) publicly traded on a national securities exchange
or over-the-counter market.

7.       ENFORCEMENT OF COVENANTS. The Executive acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 5 and 6. The
Executive agrees that such restraints are necessary for the reasonable and
proper protection of the Company and its Subsidiaries and Affiliates and that
each and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The Executive further acknowledges that,
were he to breach any of the covenants contained in Section 5 or 6, the damage
to the Company would be irreparable. The Executive therefore agrees that the
Company, in addition to any other remedies available to it, shall be entitled to
preliminary and permanent injunctive relief against any breach or threatened
breach by the Executive of any of such covenants, without having to post bond.
The parties further agree that, in the event that any provision of Section 5 or
6 shall be determined by any court of competent jurisdiction to be unenforceable
by reason of its being extended over too great a time, too large a geographic
area or too great a range of activities, such provision shall be deemed to be
modified to permit its enforcement to the maximum extent permitted by law.

8.       TERMINATION.

         8.1. DEATH. The Executive's employment hereunder shall terminate upon
his death.

         8.2. INCAPACITY. If the Executive shall have been unable to perform his
duties hereunder by reason of any physical or mental illness, injury or other
incapacity (a) for any period of 90 consecutive days or (b) for a total of 120
days in any period of 12 consecutive calendar months, in the reasonable judgment
of the Board, after consultation with such experts, if any, as the Board may
deem necessary or advisable, the Company may terminate the Executive's
employment hereunder by written notice to the Executive.

                                     - 6 -
<PAGE>

         8.3. CAUSE. The Company may terminate the Executive's employment
hereunder for Cause at any time upon written notice to the Executive. For the
purposes of this Agreement, the Company shall have "CAUSE" to terminate the
Executive's employment hereunder upon: (a) the Executive's breach of any of his
obligations set forth in this Agreement, which breach is not cured within 15
days after receipt by the Executive from the Board or the President of written
notice of such breach; (b) the Executive's breach of his fiduciary duties as an
officer or director of the Company or any of its Subsidiaries or Affiliates, or
as an officer, trustee, director or other fiduciary of any pension or employee
benefit plan of the Company or any of its Subsidiaries or Affiliates; (c) the
Executive's commission of a felony involving fraud, personal dishonesty or moral
turpitude (whether or not in connection with his employment); or (d) the
Executive's failure to follow the reasonable instructions of the Board or the
President, which failure does not cease within 15 days after receipt by the
Executive from the Board or the President of written notice of such failure.

         8.4. OTHER THAN FOR CAUSE. The Company may terminate the Executive's
employment hereunder other than for Cause at any time upon written notice to the
Executive.

         8.5. GOOD REASON. The Executive may terminate the Executive's
employment hereunder for Good Reason at any time upon 60 days' prior written
notice to the Company. In the event of termination of the Executive pursuant to
this Section 8.5, the Board may elect to waive the period of notice or any
portion thereof. For the purposes of this Agreement, the Executive shall have
"GOOD REASON" to terminate the Executive's employment hereunder upon: (a)
material diminution in the nature or scope of Executive's responsibilities,
duties or authority, in each case except in the event of termination of the
Executive's employment pursuant to Section 8.1, 8.2, 8.3, 8.4 or 8.6; PROVIDED,
HOWEVER, that the Company's failure to continue Executive's appointment or
election as a director or officer of any of its Affiliates and any diminution of
the business of the Company or any of its Affiliates, including without
limitation the sale or transfer of any or all of the assets of the Company or
any of its Affiliates, shall not constitute "Good Reason", or (b) material
failure of the Company to provide Executive the Salary and benefits in
accordance with the terms of Section 3 hereof.

         8.6. OTHER THAN FOR GOOD REASON. The Executive may terminate his
employment hereunder at any time upon 60 days' prior written notice to the
Company. In the event of termination of the Executive pursuant to this Section
8.6, the Board may elect to waive the period of notice, or any portion thereof.

9.       COMPENSATION UPON TERMINATION.

         9.1. DEATH. In the event of the Executive's death during the term
hereof, the Company shall pay or transfer, as the case may be, to the
Executive's designated beneficiary or, if no beneficiary has been designated by
the Executive, to his estate, (a) his Salary that is earned and unpaid at the
date of death and (b) on the earlier of (i) the date of the release of the
audited financial statements of the Company for the Bonus Year during which
death occurs or (ii) the date which is 120 days after the end of such Bonus
Year, an amount equal to the product of (A) the Annual Bonus that the Executive
would otherwise have earned for such Bonus Year if death had not occurred
MULTIPLIED BY (B) a fraction, the numerator of which is the number of days from
the beginning of such Bonus Year until the date of death and the denominator of
which is 365.

                                     - 7 -
<PAGE>

         9.2. INCAPACITY. If the Executive's employment shall be terminated by
reason of his incapacity pursuant to Section 8.2, the Company shall (a) continue
to pay the Executive his Salary through the Termination Date and (b) pay the
Executive on the earlier of (i) the date of the release of the audited financial
statements of the Company for the Bonus Year during which termination pursuant
to Section 8.2 occurs or (ii) the date which is 120 days after the end of such
Bonus Year, an amount equal to the product of (A) the Annual Bonus that the
Executive would otherwise have earned for such Bonus Year if termination
pursuant to Section 8.2 had not occurred MULTIPLIED BY (B) a fraction, the
numerator of which is the number of days from the beginning of such Bonus Year
until the date of termination pursuant to Section 8.2 and the denominator of
which is 365.

         9.3. CAUSE. If the Company shall terminate the Executive's employment
for Cause, the Company shall have no further obligations to the Executive under
this Agreement other than payment of his Salary through the Termination Date.

         9.4. OTHER THAN FOR CAUSE; GOOD REASON. If the Company shall terminate
the Executive's employment pursuant to Section 8.4 or the Executive shall
terminate the Executive's employment pursuant to Section 8.5, then the Company
shall pay to the Executive:

                  (a) his Salary through the Termination Date;

                  (b) on the earlier of (i) the date of the release of the
         audited financial statements of the Company for the Bonus Year during
         which such termination occurs or (ii) the date which is 120 days after
         the end of such Bonus Year, an amount equal to the product of (A) the
         Annual Bonus that the Executive would otherwise have earned for such
         Bonus Year if such termination had not occurred MULTIPLIED BY (B) a
         fraction, the numerator of which is the number of days from the
         beginning of such Bonus Year until the Termination Date and the
         denominator of which is 365; and

                  (c) until the first anniversary of the Termination Date,
         severance at a rate equal to 100% of his Salary in effect at the time
         notice of termination is given, such severance to be paid on a monthly
         basis (or such other increment as the Company and the Executive
         mutually agree) for a period of 12 months after the termination of the
         Executive's employment.

With respect to any termination of employment to which this Section 9.4 applies,
until the earlier to occur of (1) the first anniversary of the Termination Date
and (2) the date on which the Executive commences other employment in connection
with which the Executive receives medical and dental benefits substantially
comparable to those made available by the Company (including self-employment or
engaging in an enterprise as a sole proprietor or partner) (the "BENEFITS
TERMINATION DATE"), the Company shall continue to contribute to the cost of the
Executive's participation in its medical and dental insurance plans at the same
level so long as the Executive is entitled to continue such participation under
applicable law and plan terms. The obligations of the Company to the Executive
under this Section 9.4 (other than clause (a) of the first sentence of this
Section 9.4) are conditioned upon the Executive's signing a release of claims in
the form of Exhibit C (the "RELEASE") within 28 days of the date on which notice
of termination is given and upon such Release remaining in full force and effect
thereafter. All severance payments under this Section 9.4 will be in the form of
salary continuation, payable in

                                     - 8 -
<PAGE>

accordance with the normal payroll practices of the Company and will begin at
the Company's next regular payroll period following the effective date of the
Release, but shall be retroactive to the Termination Date.

         9.5. OTHER THAN FOR GOOD REASON. If the Executive shall terminate his
employment pursuant to Section 8.6, the Company shall have no further
obligations to the Executive under this Agreement other than payment of his
Salary through the Termination Date (it being understood that if, in accordance
with Section 8.6, the Board elects to waive the period of notice, or any portion
thereof, the payment of Salary under this Section 9.5 shall continue through the
notice period or any portion thereof so waived).

         9.6. POST-TERMINATION OBLIGATIONS GENERALLY. Except as expressly set
forth in this Section 9, the Stock Option Certificate and any other stock option
certificate issued to the Executive, the Company shall have no further
obligations to the Executive following expiration of the term of the Executive's
employment hereunder, and performance by the Company of any obligation
specifically provided in this Section 9 shall constitute full settlement of any
claim that the Executive may have on account of such termination against the
Company and its Subsidiaries and Affiliates and all of their respective past and
present officers, directors, stockholders, controlling Persons, employees,
agents, representatives, successors and assigns and all other others connected
with any of them, both individually and in their official capacities.

10.      CONFLICTING AGREEMENTS. Executive hereby represents and warrants that
the execution of this Agreement and the performance of Executive's obligations
hereunder will not breach or be in conflict with any other agreement to which
Executive is a party or is bound and that Executive is not now subject to any
covenants against competition, non-solicitation or similar covenants that would
affect the performance of Executive's obligations hereunder or would restrict
the Company in its operations, including hiring any additional executives.
Executive has provided the Company with a true and correct copy of all
agreements between Executive and Executive's former employer or employers and
any similar agreements governing Executive's rights and obligations relating to
any former employer. Executive will not disclose to or use on behalf of the
Company any confidential or proprietary information of a third party without
such party's consent.

11.      WITHHOLDING. All payments made by the Company under this Agreement
shall be net of any tax or other amounts required to be withheld by the Company
under any applicable law or legal requirement.

12.      NOTICES. All notices, requests and demands to or upon the parties
hereto to be effective shall be in writing, by facsimile, by overnight courier
or by registered or certified mail, postage prepaid and return receipt
requested, and shall be deemed to have been duly given or made upon: (a)
delivery by hand; (b) one business day after being sent by nationally recognized
overnight courier; (c) in the case of transmission by facsimile, when
confirmation of receipt is obtained; or (d) three business days after being sent
by registered or certified mail, postage prepaid and return receipt requested.
Such communications shall be addressed and directed to the parties as follows
(or to such other address as either party shall designate by giving like notice
of such change to the other party):

                                     - 9 -
<PAGE>

                  If to the Executive:

                           Mark Parrish
                           1128 Mooresmill Road
                           Atlanta, GA  30327

                  If to the Company:

                           Simmons Company
                           One Concourse Parkway
                           Atlanta, GA  30328
                           Attention:  Robert Hellyer
                           Facsimile:  (770) 392-2565

                  with a copy to:

                           Ropes & Gray
                           One International Place
                           Boston, MA  02110
                           Attention:  Lauren I. Norton, Esq.
                           Facsimile:  (617) 951-7050

13.      DEFINITIONS; CERTAIN RULES OF CONSTRUCTION. Certain capitalized terms
are used in this Agreement with the specific meanings defined below in this
Section 13. Except as otherwise explicitly specified to the contrary or unless
the context clearly requires otherwise, (a) the capitalized term "Section"
refers to sections of this Agreement, (b) the capitalized term "Exhibit" refers
to exhibits to this Agreement, (c) references to a particular Section include
all subsections thereof, (d) the word "including" shall be construed as
"including without limitation" and (e) references to "$" mean United States
dollars.

         13.1. "AAA" is defined in Section 19.

         13.2. "ADDITIONAL OPTIONS" is defined in Section 3.3.

         13.3. "AFFILIATE" shall mean (a) any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with the
Company (or other specified Person), (b) any other Person which, together with
its Affiliates (as defined in clause (a) above), shall, directly or indirectly,
own beneficially or control the voting of at least 10% of the ownership interest
in the Company (or other specified Person) and (c) any other Person of which the
Company (or other specified Person) and its Affiliates (as defined in clauses
(a) and (b) above) shall, directly or indirectly, own beneficially or control
the voting of at least 10% of any class of outstanding capital stock or other
evidence of beneficial interest or of any interest as a general partner or joint
venturer.

         13.4. "ANNUAL BONUS" is defined in Section 3.2.

         13.5. "BENEFITS TERMINATION DATE" is defined in Section 9.4.

                                     - 10 -
<PAGE>

         13.6. "BOARD" is defined in Section 2.

         13.7. "BONUS YEAR" means fiscal year of the Company, PROVIDED, HOWEVER,
that in the event the fiscal year of the Company is changed, any calculations
made under Section 3.2 and Exhibit A shall be proportionately adjusted as the
Board, in its sole and absolute discretion, shall deem appropriate.

         13.8. "CAUSE" is defined in Section 8.3.

         13.9. "COMMON STOCK" means the common stock, $.01 par value, of
Holdings.

         13.10. "COMPANY" is defined in the preamble to this Agreement.

         13.11. "COMPETITIVE BUSINESS" means any business conducted or proposed
to be conducted by the Company or any of its Subsidiaries during the term of the
Executive's employment with the Company.

         13.12. "CONFIDENTIAL INFORMATION" means any and all information of the
Company and its Subsidiaries and Affiliates that is not generally known by
others with whom they compete or do business, or with whom they actively plan to
compete or do business, including such information relating to (a) the
development, research, testing, manufacturing, marketing and financial
activities of the Company and its Subsidiaries and Affiliates, (b) the Products,
(c) the costs, sources of supply, financial performance and strategic plans of
the Company and its Subsidiaries and Affiliates, (d) the identity and special
needs of the customers of the Company and its Subsidiaries and Affiliates and
(e) the people and organizations with whom the Company and its Subsidiaries and
Affiliates have business relationships and those relationships, but excluding
information which (i) is generally available to and known by the public or (ii)
is or becomes known on a non-confidential basis from a source other than the
Executive.

         13.13. "DOCUMENTS" is defined in Section 5.2.

         13.14. "EFFECTIVE DATE" is defined in the preamble.

         13.15. "EXECUTIVE" is defined in the preamble.

         13.16. "FENWAY" means Fenway Capital Partners Fund, L.P., a Delaware
limited partnership, and Fenway Capital Partners Fund II, L.P., a Delaware
limited partnership.

         13.17. "GOOD REASON" is defined in Section 8.5.

         13.18. "HOLDINGS" means Simmons Holdings, Inc., a Delaware corporation.

         13.19. "METROPOLITAN AREA" means the Atlanta, Georgia metropolitan
area.

         13.20. "NON-COMPETITION PERIOD" is defined in Section 6.1.

         13.21. "NON-SOLICITATION PERIOD" is defined in Section 6.3.

         13.22. "OPTION PLAN" is defined in Section 3.3.

                                     - 11 -
<PAGE>

         13.23. "PERSON" means any individual, partnership, corporation,
association, trust, joint venture, limited liability company, unincorporated
organization or entity, and any government, governmental department or agency or
political subdivision thereof.

         13.24. "PRESIDENT" is defined in Section 2.

         13.25. "PRODUCTS" means all products planned, researched, developed,
tested, manufactured, sold, licensed, leased or otherwise distributed or put
into use by the Company or any of its Subsidiaries or Affiliates, together with
all services provided or planned by the Company or any of its Subsidiaries or
Affiliates, during the Executive's employment.

         13.26. "PROPRIETARY RIGHTS" is defined in Section 5.3.

         13.27. "RELEASE" is defined in Section 9.4.

         13.28. "SALARY" is defined in Section 3.1.

         13.29. "STOCK OPTION CERTIFICATE(S)" is defined in Section 3.3.

         13.30. "STOCK OPTIONS" is defined in Section 3.3.

         13.31. "SUBSIDIARY" means any Person of which the Company (or other
specified Person) shall, directly or indirectly, own beneficially or control the
voting of at least a majority of the outstanding capital stock (or other shares
of beneficial interest) entitled to vote generally or at least a majority of the
partnership, joint venture or similar interests, or in which the Company (or
other specified Person) or a Subsidiary thereof shall be a general partner or
joint venturer without limited liability.

         13.32. "TARGET BONUS" is defined in Section 3.2.

         13.33. "TERMINATION DATE" is defined in Section 1.2.

14.      MISCELLANEOUS. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is approved by the
Board and agreed to in writing by the Executive and such officer as may be
specifically authorized by the Board in connection with such approval. No waiver
by either party hereto at any time of compliance with or of any breach by the
other party hereto of any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not set forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement and the legal relations created
thereby shall be governed by the domestic substantive laws of the State of
Georgia without giving effect to any choice or conflict of laws provision or
rule that would cause the application of the domestic substantive laws of any
other jurisdiction. The Executive acknowledges and agrees that, because the
Company's legal remedies may be inadequate in the event of a breach of, or other
failure to perform, any of the covenants and agreements set forth in Section 5
or 6 by the Executive, the Company may, in addition to obtaining any other
remedy or relief available to it (including

                                     - 12 -
<PAGE>

damages at law), enforce the provisions of Sections 5 and 6 by injunction and
other equitable relief.

15.      SEVERABILITY. If any portion or provision of this Agreement shall to
any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.

16.      COUNTERPARTS. This Agreement may be executed in any one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

17.      ENTIRE AGREEMENT. This Agreement (together with the Stock Option
Certificates) constitutes the entire agreement between the parties hereto, and
supersedes any and all prior communications, agreements and understandings,
written or oral, with respect to the terms and conditions of the Executive's
employment with the Company.

18.      ASSIGNMENT. This Agreement shall inure to the benefit of and be binding
upon (a) the Executive, his personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees and (b)
the Company and its successors (including by means of reorganization, merger,
consolidation or liquidation) and permitted assigns. The Company may assign this
Agreement to any of its Subsidiaries or Affiliates or to any successor of the
Company by reorganization, merger, consolidation or liquidation and any
transferee of all or substantially all of the business or assets of the Company
or of any division or line of business of the Company with which the Executive
is at any time associated. The Company requires the personal services of the
Executive hereunder and the Executive may not assign this Agreement.

19.      ARBITRATION. With the exception of Sections 5 and 6, any unresolved
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted by a single arbitrator in
Atlanta, Georgia in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association ("AAA") then in
effect; PROVIDED, HOWEVER, that the parties may agree to use an arbitrator other
than those provided by the AAA. The arbitrator shall not have the authority to
add to, detract from, or modify, any provision hereof nor to award punitive
damages to any injured party. The arbitrator shall have the authority to order
back-pay, severance compensation, reimbursement of costs (including those
incurred to enforce this Agreement), together with interest thereon. A decision
by a the arbitrator shall be final and binding. Judgment may be entered on the
arbitrator's award in any court having competent jurisdiction. Responsibility
for bearing the cost of the arbitration shall be determined by the arbitrator
and shall be proportional to the arbitrator's decision on the merits.

20.      STOCKHOLDER APPROVAL OF CERTAIN PAYMENTS. The Executive hereby agrees
that any payments owed to the Executive pursuant to this Agreement or the Stock
Option Certificates or any other stock option certificate issued to the
Executive by the Company that would be construed as "parachute payments" for the
purposes of Sec.280G of the Internal Revenue

                                     - 13 -
<PAGE>

Code are hereby conditioned on the receipt by Holdings of a vote of persons who
own more than 75% of the voting stock of Holdings approving such payments.

         [THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]

                                     - 14 -
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
under seal, as of the date first above written.

                                       THE COMPANY:

                                       SIMMONS COMPANY

                                       By_________________________________
                                         Name:
                                         Title:

                                       THE EXECUTIVE:

                                       ___________________________________
                                       Mark Parrish

                                     - 15 -
<PAGE>
                                                                       EXHIBIT A

                   ILLUSTRATION OF COMPUTATION OF ANNUAL BONUS

                  % OF PERFORMANCE
                  TARGETS ACHIEVED                            % OF TARGET BONUS
                  ----------------                            -----------------

                less than or equal to 90                               0

                          91                                          10

                          92                                          20

                          93                                          30

                          94                                          40

                          95                                          50

                          96                                          60

                          97                                          70

                          98                                          80

                          99                                          90

                          100                                         100

X        A minimum achievement of at least 91% of the performance targets is
         required in order for any portion of the Annual Bonus to be awarded.

X        Upon attaining 100% of the performance targets, the amount of the
         Annual Bonus is increased thereafter by 4% of the Salary for each 1%
         increase over the performance targets.

X        The Board will approve performance targets for any Bonus Year on or
         prior to the later of (a) the date which is 45 days after the end of
         the immediately preceding fiscal year or (b) the date which is 15 days
         after the release of the audited financial statements of the Company
         for the immediately preceding fiscal year.

<PAGE>

                                                                       EXHIBIT B

                            STOCK OPTION CERTIFICATE

<PAGE>

                                                                       EXHIBIT C

                                RELEASE OF CLAIMS

         FOR AND IN CONSIDERATION OF the special payments and benefits to be
provided in connection with the termination of my employment in accordance with
the terms of the Employment Agreement dated as of July 15, 2001 (as amended and
in effect from time to time, the "EMPLOYMENT AGREEMENT") between Simmons
Company, a Delaware corporation (the "COMPANY"), and me, I, on my own behalf and
on behalf of my personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees and all others connected
with me, hereby release and forever discharge Fenway (as defined in the
Employment Agreement), the Company and their respective Affiliates (as defined
in the Employment Agreement) and all of their respective past and present
officers, directors, stockholders, controlling persons, employees, agents,
representatives, successors and assigns and all others connected with any of
them (all collectively, the "RELEASED"), both individually and in their official
capacities, from any and all rights, liabilities, claims, demands and causes of
action of any type (collectively, "CLAIMS") which I have had in the past, now
have, or might now have, through the date of my signing of this Release of
Claims, in any way resulting from, arising out of or connected with my
employment or its termination or pursuant to any federal, state, foreign or
local employment law, regulation or other requirement (including, without
limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act, the Americans with Disabilities Act, and the fair employment
practices laws of the state or states in which I have been employed by the
Company, each as amended from time to time); PROVIDED, HOWEVER, that the
foregoing release shall not apply to (a) any right explicitly set forth in the
Employment Agreement to special payments and benefits to be provided in
connection with the termination of my employment or (b) any right to
indemnification set forth in Section 4.2 of the Employment Agreement.

         In signing this Release of Claims, I acknowledge that I have had at
least 21 days from the date of notice of termination of my employment to
consider the terms of this Release of Claims and that such time has been
sufficient; that I am encouraged by the Company to seek the advice of an
attorney prior to signing this Release of Claims; and that I am signing this
Release of Claims voluntarily and with a full understanding of its terms.

         I understand that I may revoke this Release of Claims at any time
within seven days of the date of my signing by written notice to the Company and
that this Release of Claims will take effect only upon the expiration of such
seven-day revocation period and only if I have not timely revoked it.

         Intending to be legally bound, I have signed this Release of Claims
under seal as of the date first written above.

Signature: ___________________________________
                     Mark Parrish

Date Signed: _________________________________

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