Exhibit
10.33


 


Form
of Stock Option Award Agreement


under
the


Select
Comfort Corporation 2004 Stock Incentive Plan


 


                         ,
20


 


Name


Address


Address


 


Re:                               Options to Purchase Shares of Common Stock of
Select Comfort Corporation


 


Dear                            :


 


In recognition of your
contributions to the ultimate success of our Company, and to enable you to
share in that success, the Board of Directors has approved the grant to you of
stock options under the Company’s 2004 Stock Incentive Plan (the “Plan”).  This letter serves as formal documentation of
these stock options, giving you the right to purchase up to (                                 )
shares of the Company’s Common Stock at a price of $                per
share, subject to the vesting provisions and other terms and conditions of this
letter and the Plan.


 


The options granted
under this letter will become exercisable in installments of one-fourth (1/4th)
of the total number of option shares as of each of the first four (4) anniversaries
of the date of this letter, so long as you remain continuously employed by the
Company.  Your rights to exercise these
options will terminate as to all unexercised options at 5:00 p.m. (Minneapolis,
Minnesota time) on                ,
20     (the “Expiration Date”), subject to earlier
termination as described below or in the Plan.


 


If your employment with
the Company is terminated, your rights to exercise these options will terminate
as described below, depending on the reason for termination of your employment:


 


Retirement.  If your employment is terminated upon your
retirement, as defined in the Plan, options that are vested as of the date of
retirement will remain exercisable for up to one (1) year after retirement, but
not beyond the Expiration Date.


 


Voluntary Termination
other than upon Retirement.  If your employment is terminated voluntarily
by you (other than upon retirement), options that are vested as of the date of
termination of employment will remain exercisable for up to three (3) months
after your employment ends, but not beyond the Expiration Date.


 


Termination by the
Company other than for Cause.  If your employment is terminated by the
Company (other than for “cause,” as defined in the Plan), options that are
vested as of the date of termination of employment will remain exercisable for
up to three (3) months after your employment ends, but not beyond the
Expiration Date.


 





















 


Termination by the
Company for Cause.  If your employment
is terminated by the Company for “cause,” as defined in the Plan, all of your
rights under this letter agreement and the options granted hereby will
immediately terminate without notice of any kind.


 


Termination due to
Death or Disability.  If your employment
is terminated due to death or “disability,” as defined in the Plan, all of the
options will become immediately exercisable in full and will remain exercisable
for up to two (2) years after termination of employment, but not beyond the
Expiration Date.


 


The Company is not
required to give you notice of the termination of your options under any of the
foregoing circumstances.


 


Following the exercise
by you of your rights to purchase shares under these stock options, the shares
purchased by you will be freely tradable, subject to the Company’s policies and
SEC rules regarding insider trading. 
Executive officers and members of the Board of Directors are required to
comply with SEC Rule 144 in connection with any sale of shares received upon
the exercise of any stock options.


 


There may be income tax
consequences resulting from the exercise of the stock options or sale of the
shares received upon the exercise of the stock options.  You are urged to consult with your individual
tax advisor regarding any tax consequences.


 


These options are
granted under the Company’s 2004 Stock Incentive Plan, and are subject to all
of the terms and conditions applicable to stock options granted under the
Plan.  We have enclosed, for your
records, a copy of the Plan, the Prospectus for the Plan, the Company’s most
recent Annual Report and the Company’s most recent Proxy Statement.


 


Please note that your
rights to exercise your options will become void and will expire as to all
unexercised options at 5:00 p.m. (Minneapolis, Minnesota time) on                                     ,
20    , subject to earlier termination as set forth above
or in the Plan.


 


Please sign the copy of
this letter and return it to Becky Moody for the Company’s records.  You should retain this letter, the Plan,
Prospectus, Annual Report and Proxy Statement in your records.  If you have any questions about these
options, please call Becky Moody at (763) 551-7712.


 


Very
truly yours,


 


William
R. McLaughlin


President
and CEO


 


By
signing this letter, I acknowledge the terms of the stock options granted under
this letter, and acknowledge receipt of a copy of the Company’s 2004 Stock
Incentive Plan and the other documents referred to above.


 


	
   

  	
   

  
	
  (Signature)