My rule of sleep used to be 16 hours of adventuring rendered you automatically fatigued, and 8 hours of sleep would fix this. If they do not sleep, then after 16 hours of being fatigued they are exhausted.
Unfortunately, the rules for sleeping in heavy armor would suggest that one had not slept at all, despite 8 hours of nonmovement
Now I do it like this: 16 hours of adventuring makes you fatigued. If you do not sleep, you become exhausted after 8 hours. If you do not sleep for another 16 hours of being exhausted, you need to make a DC 5+1/hour Fortitude save each hour or fall unconscious and sleep for 8 hours, after which you wake up fatigued.
If you sleep in heavy armor, you wake up fatigued, yes, but you can go a full 16-hour adventuring day becfore you become exhausted. If you sleep in heavy armor to remove the exhausted condition, you wake up fatigued, ready for another 16-hour adventuring day before exhaustion. However, if you are exhausted after 16 hours because you were fatigued from sleeping in heavy armor, sleeping without heavy armor removes both the fatigued and exhausted conditions.
I realize that this rule effectively creates different kinds of fatigue and exhaustion, but I needed to stick to the "heavy armor sleeping makes fatigued" rule. After all, going without sleep is way more exhausting than getting a bad sleep!