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Exhibit 10.17
 
 

March 8, 2005

Kathy Roedel

Dear Kathy,

On behalf of Select Comfort Corporation, I am pleased to confirm that you will
be joining Select Comfort as the Senior Vice President, Global Supply Chain
reporting to me. This position is considered as an executive officer of the
company. Your anticipated start date is April 4, 2005. You will be based in our
Plymouth, MN location.

The agreed upon terms of this exempt, full-time position are as follows:

·  
Starting bi-weekly salary of $9615.38. ($250,000 annualized). You will also be
eligible for your next salary review in February, 2006.

·  
You will be eligible to receive a one-time lump sum sign on bonus of $50,000
(less applicable withholdings) within your first 2 weeks of employment.

·  
You will be eligible to participate in the company’s management bonus plan.
Under the plan as established for 2005, you will be eligible for a targeted
bonus of 55% of base compensation actually paid for the year. The actual bonus
payment may range from 0% to 250% of the targeted bonus level, depending on the
performance of the Company. Your minimum 2005 bonus payment will be paid at
full-year target(not pro-rated), with upside if the company exceeds plan. Your
minimum 2006 bonus payment will be paid at 75% of target, with upside based on
company performance versus targets.

·  
You will be granted options to purchase 75,000 shares of the Company’s common
stock at a fixed exercise price. The exercise price of these options will be the
average of the high and low trading prices of the Company’s common stock on the
date of grant, which we expect to be the first day of employment. These options
will vest 25% per year on each of the first 4 anniversaries of the date of
grant. You will be eligible for annual equity grants as part of our annual
long-term incentive plan.

·  
You will also be granted 5000 restricted shares which will vest after 4
completed years of service. The grant price of these shares will be the average
of the high and low trading prices of the Company’s common stock on the day your
employment begins.

·  
You will be eligible for the company’s director level & above benefits as part
of your total compensation package. Please refer to the attached summary of
benefits for details.

Actual benefits are defined in the individual plan documents. You will be
eligible for 25 days paid time off annually, plus 10 holidays.

You will be eligible for relocation benefits as part of your compensation
package. Select Comfort will cover reimbursable relocation expenses to include:

·  
Reasonable costs (travel, food, lodging, car rental, etc.) for the purpose of
finalizing a home purchase. We would expect this to include the cost of a
pre-employment house hunting trip for you and your spouse; and an additional
house hunting trip for your spouse/family if necessary.

·  
Interim temporary living for a period of up to 60 days if permanent residence is
not available.

·  
Reasonable number of trips back home while/if you are in interim living.

·  
The moving of your household goods and personal effects through a moving company
set up by Select Comfort.

·  
Real estate fees associated with the sale of your home and other reimbursable
closing costs.

In the event that you voluntarily leave Select Comfort during the first twelve
months of employment, you agree to re-pay to Select Comfort the reimbursed
relocation expenses.  

If your employment is terminated by the Company within one (1) year following a
change of control of the Company, or if you are subject at any time to a
termination without cause, upon the termination of your employment under such
circumstances, and subject to the execution and delivery to the Company of a
standard release of claims, you will be entitled to receive one (1) year’s base
salary as severance compensation, and the portion of the stock options referred
to above which have not previously been vested, will vest immediately and remain
exercisable for a period not to exceed ninety (90) days following termination of
employment. At your option, the severance compensation described above will be
payable (a) over a period of one (1) year following termination of employment in
accordance with the Company’s normal payroll schedule, or (b) in a lump sum
equal to the present value of such stream of payments discounted at a
capitalization rate of 10%. In addition, if such termination occurs more than
half-way through a fiscal year of the Company, and subject to the execution and
delivery to the Company of a standard release of claims, you will be entitled to
receive a pro rata portion of any bonus payment that is ultimately earned for
such fiscal year, payable at the time such bonus payments are paid to other
eligible employees.

This offer is contingent upon successful completion of your reference, education
and background investigation, and compliance with the Immigration Reform Control
Act of 1986 (IRCA). Furthermore, this offer is conditional upon your signing our
Employee Inventions, Confidentiality and Non-Compete Agreement, a copy of which
will be sent under separate cover. In addition, you will need to sign the
attached release authorizing a background check. Please complete and sign the
background check release and fax to Kevin Gunn’s attention at 763.694.3305

You should understand that this offer of employment does not constitute a
contract of employment, nor is it to be construed as a guarantee of continuing
employment for any period of time. Employment with Select Comfort is “at will”.
We recognize your right to terminate the employment relationship at anytime and
for any reason, and, similarly, we reserve the right to alter, modify or
terminate the relationship at any time and for any reason.

This written offer of employment constitutes the entire understanding of the
parties regarding your hiring and employment, and supersedes and replaces any
and all oral or written statements made by Select Comfort relating to your
hiring and employment that are inconsistent with its terms. Upon commencement of
employment, you will be subject to all policies and procedures of Select
Comfort.

Select Comfort is rapidly transforming the industry, and dramatically improving
people’s lives through better sleep! I look forward to you joining the Select
Comfort team! Should you have any questions, please contact me directly at (763)
551-7007.

Sincerely,

/s/ William R. McLaughlin

William R. McLaughlin
Chairman, President & CEO
 
 
 
Accepted: /s/ Kathy Roedel