RESTRICTED STOCK AGREEMENT

RESTRICTED STOCK AGREEMENT

This Restricted Stock Agreement (this " Agreement ") is made as of this 1 ^st day of December, 2006 (the " Effective Date ") between Simmons Company, a Delaware corporation (the " Company "), and the undersigned (the " Restricted Shareholder "). Certain capitalized terms used herein are defined in Section 7 hereof.

WHEREAS, the Company believes it to be in the best interests of the Company and its shareholders to take action to promote work-force stability, to reward performance and otherwise align the Restricted Shareholder’s interests with those of the Company; and

WHEREAS, accordingly, the Company has determined to issue restricted stock to the Restricted Shareholder in accordance with the provisions of this Agreement.

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

1.    Purchase and Sale of Restricted Shareholder Stock .

(a)  Upon execution of this Agreement and payment of the Original Purchase Price (as hereinafter defined), the Company will issue to the Restricted Shareholder that number of shares of Class B Common Stock, par value $0.01 per share, of the Company (the " Class B Common Stock ") set forth below such Restricted Shareholder’s name on the signature page attached hereto, for a purchase price of $0.01 per share (the " Original Purchase Price "). All of such shares of Class B Common Stock purchased by the Restricted Shareholder pursuant to this Agreement are referred to herein as " Restricted Shareholder Stock ." To secure the Company’s rights under the Repurchase Option in Section 3 , the Company will retain possession of the certificates representing the Restricted Shareholder Stock and will provide the Restricted Shareholder with copies thereof.

(b)  The parties agree that the fair market value of each share of Restricted Stock as of the date hereof is $5.91. The Restricted Shareholder, in his or her sole discretion, may make an effective election with the Internal Revenue Service (the " IRS ") under Section 83(b) of the Code and the regulations promulgated thereunder. The Restricted Shareholder understands that under applicable law such election must be filed with the IRS no later than thirty (30) days after any acquisition of the Restricted Shareholder Stock to be effective. If the Restricted Shareholder files an effective election, the excess of the fair market value of the Restricted Shareholder Stock (which the IRS may assert is different from the fair market value determined by the parties) covered by such election over the amount paid by the Restricted Shareholder for the stock will be treated as ordinary income received by the Restricted Shareholder, and the Company or its subsidiary, Simmons Bedding Company, will withhold from the Restricted Shareholder’s compensation all amounts required under applicable law. If the Restricted Shareholder does not file an effective election, all appreciation on the Restricted Shareholder Stock from the date of issuance will generally be taxable as ordinary income when such stock vests pursuant to this Agreement.

(c)  In connection with the acquisition of the Restricted Shareholder Stock, the Restricted Shareholder represents and warrants to the Company that:

(i)  the Restricted Shareholder Stock to be acquired by the Restricted Shareholder will be acquired for the Restricted Shareholder’s own account, for investment only and not with a view to, or intention of, distribution thereof in violation of the Securities Act, or any applicable state securities laws, and the Restricted Shareholder Stock will not be disposed of in contravention of the Securities Act or any applicable state securities laws or this Agreement or the Securityholders’ Agreement;

(ii)  the Restricted Shareholder, either alone or acting in conjunction with a Purchaser Representative (as such term is defined in Regulation D of the Securities Act), generally has such knowledge and experience in business and financial matters and with respect to investments in securities of privately held companies so as to enable the Restricted Shareholder to understand and evaluate the risks and benefits of his or her investment in the Restricted Shareholder Stock;

(iii)  the Restricted Shareholder has no need for liquidity in his or her investment in the Restricted Shareholder Stock and is able to bear the economic risk of his or her investment in the Restricted Shareholder Stock for an indefinite period of time and understands that the Restricted Shareholder Stock has not been registered or qualified under the Securities Act or any applicable state securities laws, by reason of the issuance of the Restricted Shareholder Stock in a transaction exempt from the registration and qualification requirements of the Securities Act or such state securities laws and, therefore, cannot be sold unless subsequently registered or qualified under the Securities Act or such state securities laws or an exemption from such registration or qualification is available;

(iv)  the Restricted Shareholder acknowledges that he or she is aware that the Shares may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of that Rule are met. Among the current conditions for use of Rule 144 by certain holders is the availability to the public of current information about the Company. Such information is not now available, and the Company has no current plans to make such information available;

(v)  the Restricted Shareholder has had an opportunity to ask questions and receive answers concerning the terms and conditions of the offering of the Restricted Shareholder Stock and has had full access to or been provided with such other information concerning the Company as the Restricted Shareholder has requested; and

(vi)  This Agreement constitutes the legal, valid and binding obligation of the Restricted Shareholder, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by the Restricted Shareholder does not and will not conflict with, violate or cause a breach of any agreement, contract or instrument to which the Restricted Shareholder is a party or any judgment, order or decree to which the Restricted Shareholder is subject.

(d)  As an inducement to the Company to issue the Restricted Shareholder Stock to the Restricted Shareholder and as a condition thereto, the Restricted Shareholder acknowledges and agrees that:

(i)  neither the issuance of the Restricted Shareholder Stock to the Restricted Shareholder nor any provision contained herein shall entitle the Restricted Shareholder to remain on the Board of or in the employment of the Company or any of its Subsidiaries, if any, or affect the rights of the Company, its shareholders or any of its Subsidiaries to terminate the Restricted Shareholder’s service to or employment with the Company or any of its Subsidiaries at any time for any reason; and

(ii)  except as provided in any other agreement between the Company and/or Simmons Bedding Company or any Subsidiary thereof and the Restricted Shareholder, the Company shall have no duty or obligation to disclose to the Restricted Shareholder, and the Restricted Shareholder shall have no right to be advised of, any material information regarding the Company and its Subsidiaries, if any, at any time prior to, upon or in connection with the forfeiture of the Restricted Shareholder Stock upon the termination of the Restricted Shareholder’s service to or employment with the Company or a Subsidiary thereof.

(e)  In connection with the issuance and sale by the Company to the Restricted Shareholder of the Restricted Shareholder Stock, the Company represents and warrants that:

(i)  the Company is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power and authority to own, lease and operate the assets used in its business, to carry on its business as presently conducted, to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby;

(ii)  the Company has taken all corporate action necessary to authorize its execution and delivery of this Agreement, its performance of its obligations thereunder, and its consummation of the transactions contemplated thereby;

(iii)  this Agreement constitutes a valid and binding obligation of the Company, enforceable in accordance with its terms; and

(iv)  the Restricted Shareholder Stock has been duly authorized and validly issued, fully paid and nonassessable and will be free of all Encumbrances created by or through the Company. For purposes of this clause, " Encumbrance " means any security interest, mortgage, lien, pledge, charge, easement, reservation, restriction, or similar right of any third party.

2.    Vesting of Restricted Shareholder Stock .

(a)   General .

(i)   Vesting . The shares of Restricted Shareholder Stock granted hereunder (the " Shares ") will be deemed "vested" (the " Vested Shares ") as follows: Shares shall become Vested Shares in accordance with this Section 2 , based upon the Company’s achievement of the Consolidated Adjusted EBITDA targets set forth below (each, the " Target EBITDA ") for each of the Company’s fiscal years ending December 29, 2007, December 27, 2008, December 26, 2009 and December 26, 2010 (the " Measurement Years ").

EBITDA Targets

(dollars in millions)

The minimum Target EBITDA numbers set forth above shall be equitably adjusted by the Board for acquisitions and dispositions made by the Company (whether by purchase or sale of assets or stock, merger, consolidation or otherwise), including adjustments for the acquisition of Simmons Canada Inc. and the disposition of Sleep Country USA, Inc., and such adjustments may take into account the pro forma annual Consolidated Adjusted EBITDA of any acquired business, as determined by the Board.

At the end of each Measurement Year, on the Measurement Date, the percentage of Shares set forth above shall be eligible to vest (the " Eligible Shares "). On each Measurement Date, 50% of the Eligible Shares shall become Vested Shares if at least 90% of the Target EBITDA amount was met for the prior Measurement Year. If more than 90% of the Target EBITDA amount was met for the prior Measurement Year, then the Eligible Shares shall become Vested Shares on a straight line basis such that an additional 5% of Eligible Shares shall become Vested Shares for each 1% that actual Consolidated Adjusted EBITDA exceeds 90% of the Target EBITDA amount.

(ii)   Change of Control .

(A) Shares that are not Vested Shares will accelerate as set forth below upon a Change of Control solely if the Company (a) achieves at least 90% of the Target EBITDA for the Measurement Year immediately preceding the year in which the Change of Control occurs, and (b) the actual Consolidated Adjusted EBITDA for the Measurement Year immediately preceding the year in which the Change of Control occurs exceeds the actual Consolidated Adjusted EBITDA for the preceding year. If (x) the conditions set forth in clauses (a) and (b) above are met, and (y) the Company achieves 90% of the Cumulative Target EBITDA above for the Measurement Year completed immediately prior to the Change of Control, then 50% of the Shares that were Eligible Shares but which did not previously become Vested Shares (the " Missed Shares ") and 50% of the Shares that are not yet Eligible Shares shall become Vested Shares. If (1) the conditions set forth in clauses (a) and (b) above are met, and (2) the Company achieves more than 90% of the Cumulative Target EBITDA above for the immediately preceding Measurement Year, then a number of Missed Shares and Shares that are not yet Eligible Shares will become Vested Shares, determined on a straight line basis such that an additional 5% of the Missed Shares and 5% of the Shares that are not yet Eligible Shares will become Vested Shares for each 1% that actual Consolidated Adjusted EBITDA for the immediately preceding Measurement Year exceeds 90% of the Cumulative Target EBITDA set forth above.

(B) Notwithstanding the foregoing paragraph, Shares that are not Vested Shares will accelerate upon a Change of Control which occurs in the Measurement Year ending December 29, 2007 solely if the Company (a) achieves at least 90% of the Target EBITDA for the fiscal year ending December 30, 2006, and (b) the actual Consolidated Adjusted EBITDA for the fiscal year ending December 30, 2006 exceeds the actual Consolidated Adjusted EBITDA for the 2005 fiscal year. The Target EBITDA for the fiscal year ending December 30, 2006 is $149.7 million. If the conditions set forth in clauses (a) and (b) above are met and the Company achieves 90% of the 2007 Year to Date Target EBITDA (as defined below) for the month completed immediately prior to the Change of Control, then 50% of the Shares that are not yet Eligible Shares shall become Vested Shares. The Target EBITDA for each month in 2007 shall be determined by the end of the 2006 fiscal year at such time as the budget for the Company’s 2007 fiscal year has been approved by the Board (the "2007 Budget"). The Target EBITDA for each month in fiscal year 2007 shall exceed the budgeted EBITDA for each month in such year (as set forth in the 2007 Budget) by the same percentage by which the annual Target EBITDA for 2007 exceeds the annual budgeted EBITDA for 2007 set forth in the 2007 Budget. The Company shall inform the Restricted Shareholder of the Target EBITDA for each month in the 2007 fiscal year promptly after determination. The 2007 Year to Date Target EBITDA represents the cumulative Target EBITDA for the period commencing December 31, 2006 and ending on the last day of the applicable month in the 2007 fiscal year of the Company (the "Year to Date Target EBITDA"). If (1) the conditions set forth in clauses (a) and (b) above are met, and (2) the Company achieves more than 90% of the 2007 Year to Date Target EBITDA for the month completed immediately prior to the Change of Control, then a number of Shares that are not yet Eligible Shares will become Vested Shares, determined on a straight line basis such that an additional 5% of the Shares that are not yet Eligible Shares will become Vested Shares for each 1% that actual Consolidated Adjusted EBITDA for the period commencing January 1, 2007 and ending on the last day of the month immediately preceding the Change of Control exceeds 90% of the 2007 Year to Date Target EBITDA.

(b)   Termination . In the event the Restricted Shareholder ceases to serve on the Board of, or be employed by the Company or any of its Subsidiaries on a full-time basis for any reason, then (i) all Shares of Restricted Shareholder Stock shall cease vesting effective as of the date upon which the Restricted Shareholder ceases to so serve or be so employed (the " Termination Date ") and, (ii) in the event that the Company achieves the Target EBITDA with respect to the Measurement Year in which such termination occurs, then the Eligible Shares with respect to such year multiplied by a fraction, the numerator of which shall equal the number of whole months during such year that the Restricted Shareholder served on the Board or remained employed with the Company and the denominator of which is 12, shall become Vested Shares as of the end of such year.

3.    Repurchase of Shares .

(a)  In the event that the Restricted Shareholder ceases to serve on the Board of, or be employed by the Company or any of its Subsidiaries on a full-time basis for any reason, then all Shares of Restricted Shareholder Stock (whether held by the Restricted Shareholder or by one or more of the Restricted Shareholder’s transferees) which as of the date of termination:

(i)  have not vested pursuant to Section 2 hereof, will be subject to repurchase by the Company, at its option (the " Non-Vested Repurchase Option "), for the lower of the Original Purchase Price of the Restricted Shareholder Stock and Fair Market Value as of the date of repurchase;

(ii)  have vested pursuant to Section 2 hereof, will be subject to repurchase by the Company, at its option (the " Vested Repurchase Option "), for Fair Market Value as of the date of repurchase.

(b)  In the event of a Change of Control, then all Shares of Restricted Shareholder Stock (whether held by the Restricted Shareholder or by one or more of the Restricted Shareholder’s transferees) which, as of the date of such Change of Control, have not become Vested Shares pursuant to Section 2 , will be subject to repurchase by the Company, at its option (the " Non-Vested Change of Control Repurchase Option ") for the lower of the Original Purchase Price of the Restricted Shareholder Stock and Fair Market Value.

(c)  The Non-Vested Change of Control Repurchase Option, together with the Non-Vested Repurchase Option and the Vested Repurchase Option, are referred to collectively as the " Repurchase Options ." The Repurchase Options shall be exercised by the Company, or its designee, from time to time, by delivering to the Restricted Shareholder a written notice of exercise and a check in the amount of the Original Purchase Price or Fair Market Value, as determined in accordance with Sections 3(a) and (b) above. Upon delivery of such notice and payment of the purchase price as described above, the Company, or its designee, shall become the legal and beneficial owner of the Shares of Restricted Shareholder Stock being repurchased and all rights and interest therein or related thereto, and the Company, or its designee, shall have the right to transfer to its own name the number of Shares of Restricted Shareholder Stock being repurchased without further action by the Restricted Shareholder or any of his or her transferees. If the Company or its designee elect to exercise the repurchase rights pursuant to this Section 3 and the Restricted Shareholder or his or her transferee fails to deliver the Shares of Restricted Shareholder Stock in accordance with the terms hereof, the Company, or its designee, may, at its option, in addition to all other remedies it may have, deposit the purchase price in an escrow account administered by an independent third party (to be held for the benefit of and payment over to the Restricted Shareholder or his or her transferee in accordance herewith), whereupon the Company shall by written notice to the Restricted Shareholder cancel on its books the certificates(s) representing such Shares of Restricted Shareholder Stock registered in the name of the Restricted Shareholder and all of the Restricted Shareholder’s or his or her transferee’s right, title, and interest in and to such Shares of Restricted Shareholder Stock shall terminate in all respects.

(d)  Notwithstanding the foregoing, if at any time the Company elects to purchase any Class B Common Stock pursuant to this Section 3 , the Company shall pay the purchase price for the Class B Common Stock it purchases (i) first, by offsetting indebtedness, if any, owing from such Restricted Shareholder to the Company and (ii) then, by the C