SELECT COMFORT CORPORATION
 
EXECUTIVE SEVERANCE PAY PLAN
 

 

 

 

 

 

 

 

 
 
 
 
 
 

 
 
 
 
 
 
 
February 2007
 
 

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SELECT COMFORT CORPORATION
EXECUTIVE SEVERANCE PAY PLAN
 
TABLE OF CONTENTS
 

 ARTICLE 1  Name and Purpose   1        ARTICLE 2  Definitions 
 2    
     2.1  Administrator             2      2.2  Affiliate  2      2.3  Base Pay
 2      2.4  Cause  2      2.5  Change in Control  2      2.6  Code  3      2.7
 Company  3      2.8  Employee  3      2.9  Excluded Employee  3      2.10
 Participant  3      2.11  Participating Employer  4      2.12  Plan  4
     2.13  Premium Reimbursement Period  4      2.14  Qualified Employee  4
     2.15  Qualified Employee Category  4      2.16  Release  4      2.17
 Severance Pay  4        ARTICLE 3  Entitlement to Severance Pay   5      3.1
 Eligible Terminations  5      3.2      Terminations Not Covered  5      3.3
 Release Required  5      3.4  Return of Property  5        ARTICLE 4  Amount of
Severance Pay   6      4.1  Base Amount  6      4.2  COBRA Reimbursement  7
     4.3      Reductions  7      4.4      Period of Payment  8      4.5
 Termination of Severance Pay  8      4.6  Death of Participant  8      
 ARTICLE 5  Administration  9      5.1      Administrator  9      5.2
 Administrator's Discretion  9        ARTICLE 6  Amendment and Termination of
Plan   10      6.1  Right to Amend or Terminate the Plan  10      6.2  Change in
Control  10

 
 
 
 
 
 
 
 
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     ARTICLE 7  Miscellaneous Provisions   11      7.1  Participation by
Affiliate  11      7.2  No Benefit Accrues  11      7.3  Indemnification  11
     7.4  Specialist's Assistance  11      7.5  Benefits Claim Procedure  11
     7.6  Disputes  12      7.7  Company Action  12      7.8  Status of Plan  12
     7.9  No Assignment of Benefits  12      7.10  Withholding and Offsets  13
     7.11  Other Benefits  13      7.12  No Employment Rights Created  13
     7.13  Successors  13

 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SELECT COMFORT CORPORATION
EXECUTIVE SEVERANCE PAY PLAN
 
This instrument sets forth the Select Comfort Corporation Executive Severance
Pay Plan, effective as of February 22, 2007. The provisions of this instrument
will apply to any Qualified Employee who terminates employment after February
22, 2007.
 
ARTICLE 1
Name and Purpose
 
The name of this Plan is the “Select Comfort Corporation Executive Severance Pay
Plan.” Its purpose is to provide severance benefits to certain Qualified
Employees whose employment is involuntarily terminated without Cause. Severance
Pay is in addition to regular earned pay and benefits for accrued paid time off,
if any, payable to Qualified Employees upon separation.
 
As stated in Section 4.4, it is not intended that this Plan be treated as a
nonqualified deferred compensation plan subject to Code section 409A.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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ARTICLE 2
Definitions
 
The terms listed in this section shall have the meanings given below.
 
2.1  Administrator. The Administrator is the person designated under the Plan to
perform administrative duties on behalf of the Company or, as the context may
require, the individual to whom specific administrative duties have been
delegated.
 
2.2  Affiliate. An Affiliate is the Company or another member of a controlled
group of corporations, within the meaning of Code section 1563(a) without regard
to Code section 1563(a)(4), that includes the Company, any trade or business
that is under common control with the Company, within the meaning of Code
section 414(c), any member of an “affiliated service group,” within the meaning
of Code section 414(m), of which the Company is a member, or any other
organization that, together with the Company, is treated as a single employer
pursuant to Code section 414(o) and Treasury Regulations.
 
2.3  Base Pay.
 
(A)  Base Pay means the Employee’s base salary in effect immediately prior to
his or her termination of employment and will exclude any commissions, incentive
pay, bonus or other addition to pay.
 
(B)  Base Pay includes any amounts by which pay is voluntarily reduced under a
Code section 125 cafeteria plan, section 401(k) cash or deferred arrangement or
the Select Comfort Executive Investment Plan.
 
2.4  Cause.  Cause means any reason for which an Employee may be subject to
discipline under the Company’s or Affiliate’s policies, practices and procedures
including, but not limited to, the following: 
 
(A)  dishonesty, fraud, misrepresentation, embezzlement or deliberate injury or
attempted injury, in each case related to the Company or any Affiliate,
 
(B)  commission of a felony crime, or commission of any criminal or unlawful
activity of any nature or degree in the course of or in relation to Employee's
employment,
 
(C)  failure to satisfactorily perform the duties of the Employee's employment,
if the failure to perform would merit termination under the Company's or
Affiliate's usual policy or practice,
 
(D)  any material breach of any employment, service, confidentiality or
non-compete agreement entered into with the Company or any Affiliate, or
 
(E)  violation of the Company's Code of Business Conduct.
 
2.5  Change in Control.  A "Change in Control" of the Company shall mean: 
 
(A)  the sale, lease, exchange or other transfer of all or substantially all of
the assets of the Company (in one transaction or in a series of related
transactions) to a corporation that is not controlled by the Company,
 
(B)  the approval by the shareholders of the Company of any plan or proposal for
the liquidation or dissolution of the Company, or
 
 
 
 
 
 
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(C)  a change in control of a nature that would be required to be reported
(assuming such event has not been “previously reported”) in response to Item
1(a) of the Current Report on Form 8-K, as in effect on the effective date of
the Select Comfort Corporation 2004 Stock Incentive Plan, pursuant to Section 13
or 15(d) of the Exchange Act, whether or not the Company is then subject to such
reporting requirement;
 
(D)  provided that, without limitation, such a Change in Control shall be deemed
to have occurred at such time as -
 
(1)  any Person becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act) directly or indirectly, of 50% or more of the combined voting
power of the Company’s outstanding securities ordinarily having the right to
vote at elections of directors or
 
(2)  individuals who constitute the Board of Directors on the effective date of
the Select Comfort Corporation 2004 Stock Incentive Plan cease for any reason to
constitute at least a majority thereof, provided that any person becoming a
director subsequent to the effective date of the Select Comfort Corporation 2004
Stock Incentive Plan whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors
comprising the Board of Directors on the effective date of the Select Comfort
Corporation 2004 Stock Incentive Plan (either by a specific vote or by approval
of the proxy statement of the Company in which such person is named as a nominee
for director, without objection to such nomination) shall be, for purposes of
this clause (2), considered as though such person were a member of the Board of
Directors on the effective date of the Select Comfort Corporation 2004 Stock
Incentive Plan.
 
2.6  Code.  Code means the Internal Revenue Code of 1986, as amended. Any
reference to a specific provision of the Code includes any amendment of or
successor to that provision.
 
2.7  Company.  The Company is Select Comfort Corporation or its successor.
 
2.8  Employee.  An Employee is any individual who performs services for a
Participating Employer as a common-law employee of the Participating Employer.
No reclassification of an individual as a common-law employee of a Participating
Employer will be given retroactive effect for any purpose under this Plan.
 
2.9  Excluded Employee.  An “Excluded Employee” is an Employee who:
 
(A)  resides in the United States but is not a United States citizen, unless he
or she is classified as a permanent resident of the United States;
 
(B)  is classified by the Participating Employer as a part-time Employee;
 
(C)  is classified by the Participating Employer as a temporary Employee; or
 
(D)  is covered by a collective bargaining agreement that does not specifically
provide for participation in this Plan.
 
2.10  Participant.  A Participant is a former Qualified Employee who is entitled
to Severance Pay benefits under this Plan.
 
 
 
 
 
 
 
 
 
 
 
 
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2.11  Participating Employer.  A Participating Employer is the Company and any
other U.S. Affiliate that has adopted the Plan, or all of them collectively, as
the context requires, and their respective successors. An Affiliate will cease
to be a Participating Employer upon a termination of the Plan as to its
Employees or upon its ceasing to be an Affiliate. The Participating Employer
with respect to any individual is the Affiliate that is responsible for paying
the individual’s wages or salary.
 
2.12  Plan.  The Plan is the Select Comfort Corporation Executive Severance Pay
Plan set forth in this instrument as it may be amended from time to time.
 
2.13  Premium Reimbursement Period.  The Premium Reimbursement Period is the
period of time during which the Participant is entitled to receive cash
reimbursement payments for COBRA continuation coverage, as described in Section
4.2.
 
2.14  Qualified Employee.  A “Qualified Employee” is an Employee who -
 
(A)  is paid under a U.S. domestic payroll of the Participating Employer;
 
(B)  is classified by the Participating Employer in Qualified Employee Category
grade 15, grade 14 or grade 13; and
 
(C)  is not an Excluded Employee.
 
2.15  Qualified Employee Category.  A “Qualified Employee Category” is the
employment grade or classification of a Qualified Employee as determined by the
Participating Employer in its sole discretion.
 
2.16  Release.  A Release is a written instrument, prescribed by the
Administrator and signed by the Qualified Employee, under which the Qualified
Employee releases all Affiliates, and the directors, officers and employees of
each of them, all employee benefit plans and all employee benefit plan
fiduciaries from any and all claims the Qualified Employee may have against any
of them. The Release will waive all claims the Qualified Employee may have under
the Age Discrimination in Employment Act, the Older Workers Benefit Protection
Act, the Americans with Disabilities Act, the Employee Retirement Income
Security Act of 1974 (other than benefits payable following termination of
employment), and such other statutes and rules of law as the Company may deem
advisable.
 
2.17  Severance Pay.  Severance Pay is an amount payable under the terms of this
Plan.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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ARTICLE 3  
Entitlement to Severance Pay
 
3.1  Eligible Terminations.  Severance Pay will be paid, subject to the
succeeding provisions of this Plan, only to a Qualified Employee whose
employment is involuntarily terminated by a Participating Employer.
 
3.2  Terminations Not Covered.  No Severance Pay will be paid to any person upon
commencement of a leave of absence, including military service leave, or to any
person whose employment is terminated by:
 
(A)  his or her resignation, retirement or death;
 
(B)  discharge for Cause;
 
(C)  failure to be reinstated following a leave of absence; or
 
(D)  refusal to accept a new job position with an Affiliate, a transfer to a new
work location or a reduction in wages or salary; provided that a refusal to
accept a job change that would entail (1) a reduction of 10% or more in the
Qualified Employee’s combined base compensation plus target bonus, other than in
conjunction with a general compensation reduction program or (2) an increase in
the commuting distance from the Qualified Employee’s current principal residence
to his or her job location of more than 50 miles or (3) a required relocation of
the Qualified Employee’s principal residence will be deemed to be an involuntary
termination not excluded from Severance Pay.
 
3.3  Release Required.  No Severance Pay will be paid to an individual who fails
to execute a Release in the form provided by the Company and deliver it to the
Administrator within the period prescribed by the Administrator or who revokes
his or her Release.
 
3.4  Return of Property.  No Severance Pay will be paid to a Participant prior
to the date on which the Participant returns to his or her employer all property
of the Company and any Affiliate he or she has in his or her possession or
control including, but not limited to, employee identification cards, credit
cards, phone cards, vehicles, equipment, documents and electronic storage media.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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ARTICLE 4  
Amount of Severance Pay
 
4.1  Base Amount.  Subject to the succeeding provisions of this section, a
Participant in each Qualified Employee Category will receive a cash base amount
of Severance Pay determined from the following table.
 
Qualified Employee Category
Base Amount - Severance Pay
Grade 15
An amount equal to:
 
(a) two times -
 
(i)  annual Base Pay (in effect as of the date of termination of employment) and
 
(ii)  target annual bonus (in effect as of the date of termination of
employment)
 
plus
 
(b) pro-rata target bonus for year of termination of employment
Grade 14
An amount equal to:
 
(a) one times -
 
(i) annual Base Pay (in effect as of the date of termination of employment) and
 
(ii) target annual bonus (in effect as of the date of termination of employment)
 
plus
 
(b) pro-rata target bonus for year of termination of employment
Grade 13
An amount equal to:
 
(a) fifty percent of -
 
(i)  annual Base Pay (in effect as of the date of termination of employment) and
 
(ii)  target annual bonus (in effect as of the date of termination of
employment)
 
plus
 
(b) pro-rata target bonus for year of termination of employment

 

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4.2  COBRA Reimbursement. Subject to the succeeding provisions of this section,
if the Participant timely elects continued coverage under the Participating
Employer’s group medical plan or group dental plan pursuant to section 4980B of
the Code (“COBRA”), in accordance with ordinary plan practices and provides
appropriate documentation of such payment as requested by the Administrator, for
the Premium Reimbursement Period the Participating Employer will reimburse the
Participant each month during the Premium Reimbursement Period an amount equal
to the difference between the amount the Participant pays for such COBRA
continuation coverage each such month and the amount paid by a full-time active
employee of the Participating Employer each such month for the same level of
coverage elected by the Participant. For purposes of the preceding sentence, the
Premium Reimbursement Period is the period that begins on the date of
termination of employment and ends on the earlier of: 
 
(A)  the last date of the Premium Reimbursement Period that applies to the
Participant based on his or her Qualified Employee Category in the table below;
 
(B)  the date on which the Participant’s eligibility for COBRA continuation
coverage under the Company’s group medical or group dental plan ends; or
 
(C)  the date on which the Participant becomes eligible to participate in
another group medical plan or group dental plan, as the case may be, because of
reemployment or otherwise, whether or not the Participant elects to participate
in such plan and whether or not such plan provides comparable benefits or
includes limitations or exclusions (unless such other group medical plan
contains a pre-existing condition exclusion that affects the Participant’s
coverage under such plan).
 
Other than the Premium Reimbursement Period payments described in this Section
4.2, the Participant’s coverage under any Employer employee benefit plan is
subject to the terms of such employee benefit plan and applicable law.
 
Qualified Employee Category
Premium Reimbursement Period
Grade 15
 
Two Years after the date of termination of employment
Grade 14
 
One Year after the date of termination of employment
Grade 13
 
Six months after the date of termination of employment

 
4.3  Reductions. Notwithstanding the foregoing provisions, the total amount of
Severance Pay (base amount and COBRA reimbursements) to which a Participant
would otherwise be entitled under this Plan will be reduced by each of the
following:
 
(A)  the full amount of any payments the Company or any Affiliate is required to
make to the Participant under any provision of law on account of the termination
of his or her employment including, but not limited to, any payments owed to the
Participant under any individual severance, separation or employment agreement
or pursuant to the Worker Adjustment and Retraining Notification Act, 21 U.S.C.
§2101 et seq. (or a similar law of any state);
 
(B)  the full amount of any indebtedness of the Participant to the Company or
any Affiliate including, but not limited to, unearned advances, credit card
balances and paid time off in excess of time accrued; and
 
 
 
 
 
 
 
 
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(C)  with respect to any Participant who terminated employment with the Company
or an Affiliate and is rehired by the Company or an Affiliate, the full amount
of Severance Pay paid to the Participant under this Plan or any individual
severance, separation or employment agreement or pursuant to the Worker
Adjustment and Retraining Notification Act, 21 U.S.C. §2101 et seq. (or a
similar law of any state) within the two year period following such previous
termination of employment.
 
4.4  Period of Payment. 
 
(A)  The base amount of Severance Pay benefits pursuant to Section 4.1 will be
paid in a single lump sum within a reasonable time following the Participant’s
termination of employment and in no event later than March 1st of the calendar
year following the calendar year during which such termination of employment
occurs. These benefits are intended to comply with the short-term deferral
exception to Code section 409A (as described in Proposed Treasury Regulations
section 1.409A-1(b)(4)) because such benefits will be paid not later than March
15th of the calendar year following the calendar year in which the employee’s
right to the benefits is no longer subject to a substantial risk of forfeiture
within the meaning of Code section 409A.
 
(B)  The COBRA reimbursement benefits pursuant to Section 4.2 will be paid in
cash within a reasonable time following the Participant’s monthly payment of the
COBRA premium. These benefits are intended to comply with the exception to Code
section 409A for reimbursement of medical expenses under a separation pay plan
(as described in Proposed Treasury Regulations section 1.409A-1(b)(9)(iv))
because such COBRA reimbursement benefits will be paid no later than December
31st of the second calendar year following the calendar year during which the
Participant’s termination of employment occurred.
 
4.5  Termination of Severance Pay. A Participant’s right to receive Severance
Pay will terminate before the last scheduled payment upon the occurrence of any
of the following events.
 
(A)  The Participant becomes employed by the Company or any Affiliate.
 
(B)  The Participant’s Release is declared invalid or the Participant revokes
(or attempts to revoke) the Release or commences or is part of a legal or
administrative action against the Company, any of its Affiliates, or the
directors, officers or employees of any of them that is based on any claim
waived under the Release. Upon the occurrence of any such event, the Participant
shall, upon demand of the Administrator, repay to the Employer the full amount
of Severance Pay he or she received, to the extent such amount would not have
been payable under this Plan if the Participant had not executed the Release.
 
(C)  The office of the Company’s general counsel informs the Administrator that
the Participant is in violation of a non-compete or confidentiality agreement
with the Company or any Affiliate.
 
4.6  Death of Participant. If a Participant dies prior to receiving all of the
Severance Pay to which he or she is entitled, any remaining payments will be
made to the Participant’s estate. If the Participant dies during the COBRA
reimbursement period pursuant to Section 4.2, COBRA premium reimbursement
payments still owed (if any) will continue to be paid to the Participant’s
estate.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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ARTICLE 5 
Administration
 
5.1  Administrator. The Company will be the Administrator and Named Fiduciary of
the Plan. The Senior Vice President, Human Resources of the Company will perform
administrative duties on behalf of the Company and will have overall
responsibility for administration of the Plan. The Senior Vice President, Human
Resources may delegate to any person such administrative duties as he or she
deems advisable and may revoke any such delegation at any time. Any delegation
to a person who is not an Employee of an Affiliate will be in writing, and any
delegation to an Employee of an Affiliate will terminate upon the termination of
his or her employment. If the name of position of Senior Vice President, Human
Resources of the Company changes or the duties of such position are transferred
to another position, such other position will be substituted for the Senior Vice
President, Human Resources of the Company in this provision.
 
5.2  Administrator’s Discretion. The Administrator will have the discretionary
power and authority to establish, modify or terminate Plan policies, rules or
procedures, to interpret, construe, apply and enforce the terms of the Plan or
any such Plan rules, polices or procedures whenever he or she deems necessary in
its administration. Such discretion will include, without limitation, the
discretionary power and authority to (A) determine whether an individual is a
Qualified Employee, the amount of a Qualified Employee’s benefit and whether a
Qualified Employee has satisfied applicable conditions or is subject to
limitations and (B) remedy ambiguities, inconsistencies, omissions and erroneous
benefit calculations. In exercising such discretionary power and authority, the
Administrator will treat all individuals determined by the Administrator to be
similarly situated in a uniform manner. All acts and decisions of the
Administrator made in good faith are binding on all interested persons.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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ARTICLE 6  
Amendment and Termination of Plan
 
6.1  Right to Amend or Terminate the Plan. Subject to Section 6.2, the Company
reserves the right to amend or terminate this Plan at any time by a written
instrument signed by the Senior Vice President, Human Resources and General
Counsel of the Company; provided that any amendment that applies to the Chief
Executive Officer or any Senior Vice President of the Company must be approved
in advance or ratified by the Compensation Committee of the Company’s board of
directors. Subject to Section 6.2, the amendment or termination of the Plan
shall be effective as of the date specified in such instrument and may apply to
any Qualified Employee or Participant, except that no amendment will be
effective to reduce the total amount of Severance Pay payable to a Participant
whose employment with all Affiliates terminated before the date the amendment is
adopted. Any Employee whose employment terminates on or after the effective date
of the termination of the Plan will be ineligible for Severance Pay.
 
6.2  Change in Control. Notwithstanding Section 6.1:
 
(A)  the Company or any successor to the Company may not terminate the Plan
during the 24-month period that begins on the date of a Change in Control and
 
(B)  any Severance Pay payable to any individual who is a Participant in this
Plan as of the day immediately prior to the date of the Change in Control and
whose employment with all Affiliates terminates during the 24-month period
beginning on the date of a Change in Control, will be no less than the Severance
Pay such Participant would have been entitled to receive if he or she had become
entitled to Severance Pay upon terminating employment with all Affiliates on the
day immediately prior to the date of the Change in Control.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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ARTICLE 7  
Miscellaneous Provisions
 
7.1  Participation by Affiliate. An Affiliate may, when authorized by its board
of directors, adopt this Plan for the benefit of its Employees, subject to the
approval of the Administrator. Upon adoption of this Plan, the Participating
Employer is subject to the terms of this Plan, as amended by the Company.
Subject to Section 6.2, any Participating Employer may terminate this Plan with
respect to its Employees at any time when authorized by its board of directors.
 
7.2  No Benefit Accrues. No Employee of any Affiliate will accrue any right to
benefits under this Plan before satisfying all of the requirements for Plan
benefits in effect at the termination of his or her employment. No Participant
will accrue any right to continued benefits under this Plan unless he or she
satisfies the conditions for eligibility as of the date each benefit installment
becomes payable.
 
7.3  Indemnification. Each Affiliate will indemnify and hold harmless, to the
extent permitted by law, each of its directors, officers and employees against
any and all liabilities, losses, costs and expenses (including legal fees) of
every kind and nature that may be imposed on, incurred by or asserted against
such person at any time by reason of such individual’s services at the request
of the Affiliate in connection with the Plan, but only if such individual did
not act dishonestly or in bad faith or in willful violation of the law,
regulation or Company by-law under which such liability, loss, cost or expense
arises. An Affiliate has the right, but not the obligation, to select counsel
and control the defense and settlement of any action for which an individual may
be entitled to indemnification under this provision.
 
7.4  Specialist’s Assistance. The Administrator may retain such actuarial,
accounting, legal, clerical and other services as may reasonably be required in
the administration of the Plan, and may pay reasonable compensation for such
services. All costs of administering the Plan will be paid by the Company.
 
7.5  Benefits Claim Procedure. The claim and appeal review procedures set forth
below will apply to this Plan.
 
(A)  The Participant (“Claimant”), or the Participating Employer on the
Participant’s behalf, must make a claim for benefits under the Plan with the
Administrator. A claim for benefits must be made no later than 60 days following
the termination of employment.
 
(1)  Within 30 days after receipt of a claim for benefits, the Administrator
will render a written decision on the claim to the Claimant.
 
(2)  If the claim is denied, in whole or in part, the Administrator will send
notification of the denial to the Claimant. Such notification will comply with
the requirements set forth in Department of Labor regulation 2560.503-1(g).
 
(B)  Appeals of denied claims will be subject to the following procedures.
 
(1)  To appeal the denial, the Claimant or his or her representative must file a
written request for review with the Administrator not later than 60 days after
the Claimant receives the Administrator’s written decision on the claim.
 
(2)  The Claimant or his or her representative may submit written comments,
documents, records, and other information relating to the claim for benefits to
the Administrator for consideration by the Administrator without regard to
whether such information was submitted or considered in the initial review
determination.
 
 
 
 
 
 
 
 
 
 
 
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(3)  The Claimant will be provided, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant
to the Claimant’s claim for benefits.
 
(4)  The Administrator will make a decision on review within 60 days of the
receipt of the request for review and will provide the decision on review in
writing to the Claimant.
 
(5)  If the denial is upheld in whole or part, the Administrator will notify the
Claimant. The notification will include the reasons for the denial, the
reference to the Plan provisions on which the denial is based and the Plan’s
response to any additional information provided by the Claimant following the
initial review determination.
 
(C)  The 30- and 60-day periods during which the Administrator must respond to
the Claimant, may be extended by up to an additional 30- or 60- days,
respectively, if circumstances beyond the Administrator’s control so require and
if notice of such extension is given to the Claimant. If the time for rendering
a written decision on a claim is extended due to the Claimant’s failure to
provide information necessary to decide the claim, the time period for making
the determination will be tolled from the date on which the notification of the
extension is sent to the Claimant until the date on which the Claimant responds
to the request for additional information.
 
(D)  Any individual who fails to follow the claim and appeal procedure will be
barred from asserting his or her claim in any judicial or administrative
proceeding.
 
7.6  Disputes. The United States District Court for the District of Minnesota is
the exclusive proper venue for any action involving a dispute between any
individual and any Affiliate, the Administrator or any other person relating to
or arising from the Plan, and such court will have personal jurisdiction over
any Qualified Employee named in the action. The law as stated and applied by the
United States Court of Appeals for the Eighth Circuit or the United States
District Court for the District of Minnesota will apply to and control all
actions relating to the Plan brought against the Plan. No action relating to or
arising from the Plan may be commenced against the Plan, the Plan Administrator
or the Company more than six months following termination of the involved
individual’s employment with an Affiliate or, if later, 90 days after the
issuance of the Administrator’s final decision on the request for review of a
denied claim under the Plan’s benefit claim procedure.
 
7.7  Company Action. The Company’s decisions and actions pursuant to the Plan
(other than those decisions which the Plan requires to be made by the
Administrator when the Company is acting in that capacity) will be made or taken
in the Company’s own interest, and the Company is not required to consider the
interest of any Qualified Employee or other individual, it being intended that
any such decision or action will be made or taken by the Company in its settlor
capacity rather than in a fiduciary capacity.
 
7.8  Status of Plan. Nothing contained in the Plan is to be construed as
providing for assets to be held for the benefit of any Qualified Employee or any
other person to whom benefits are to be paid pursuant to the terms of this Plan,
the Qualified Employee’s or other person’s only interest under the Plan being
the right to receive the benefits specified in this instrument. To the extent
the Qualified Employee or any other person acquires a right to receive benefits
under this Plan, such right is no greater than the right of any unsecured
general creditor of the Company.
 
7.9  No Assignment of Benefits. The benefits payable under the Plan and the
right to receive future benefits under the Plan may not be anticipated,
alienated, sold, transferred, assigned, pledged, encumbered or subjected to any
charge or legal process.
 
 
 
 
 
 
 
 
 
 
 
 
 
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7.10  Withholding and Offsets. The Company retains the right to withhold from
any benefit payment pursuant to the Plan any and all income, employment, excise
and other taxes as the Company deems necessary, and the Company may offset
against amounts otherwise then distributable to any person under the Plan any
amounts such person then owes the Company.
 
7.11  Other Benefits. No amounts paid pursuant to the Plan constitute salary or
compensation for the purpose of computing benefits under any other benefit plan,
practice, policy or procedure of the Company that does not expressly provide
otherwise.
 
7.12  No Employment Rights Created. Neither the maintenance of nor participation
in the Plan gives any employee a right to continued employment or limits the
right of the Company to discharge, transfer, demote or modify the terms and
conditions of employment or otherwise deal with any employee without regard to
the effect such action might have on him or her with respect to the Plan.
 
7.13  Successors. Except as otherwise expressly provided in the Plan, all
obligations of the Company under the Plan are binding on any successor to the
Company, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation or other transfer of all or
substantially all of the business or assets of the Company.
 
IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its
authorized officers on the date written below.
 

 

 
SELECT COMFORT CORPORATION
 
 
 
 
 
Dated: February 22, 2007
 
 
 
 
By:  /s/ Mark A. Kimball  
Senior Vice President & General Counsel
 
 
 
 
Dated: February 22, 2007
 
 
 
 
By:  /s/ Scott Peterson  
Senior Vice President, Human Resources
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

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