Document:

Exhibit 10.2 to Lenox Group Inc. Form 8-K dated March 16, 2009

Exhibit 10.2  

 

AMENDMENT

TO

ASSET PURCHASE AGREEMENT

 

This Amendment, dated as of March 15, 2009 (this "Amendment"), to the Asset Purchase Agreement dated as of February 28, 2009 (the "Asset Purchase Agreement"), is entered into by and among Lenox Group Inc., a Delaware corporation (“LGI”), Lenox, Incorporated, a New Jersey corporation (“LI”), Lenox Worldwide, LLC, a Delaware limited liability company (“LW”), Lenox Retail, Inc., a Minnesota corporation (“LRI”), Lenox Sales, Inc., a Minnesota corporation (“LSI”), FL 56 Intermediate, Corp., a Delaware corporation
(“FL”), D 56, Inc., a Minnesota corporation (“D56” and collectively with LGI, LI, LW, LRI, LSI and FL, the “Sellers”), and LDG-Delaware Opco, Inc., a Delaware corporation (the “Purchaser”).  Capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings ascribed to such terms in the Asset Purchase Agreement.

 

RECITALS

 

WHEREAS, the Sellers and Purchaser desire to extend the period of time in which Contracts may be added to the Assigned Contracts List and the period of time in which a determination may be made by Purchaser to exclude certain Contracts from the Transactions and the Assigned Contracts List.

 

NOW, THEREFORE, in consideration of the promises and the representations, warranties, agreements and covenants hereinafter set forth, and intending to be legally bound, the parties hereto hereby agree as follows:

 

	
1.
 	
Amendments.
 

 

          (a)  Section 5.01(a) is hereby amended and restated in its entirety as follows: “No later than one (1) day prior to the Closing Date, the Purchaser shall deliver to Sellers a list of the Contracts that the Purchaser proposes to be the Assigned Contracts pursuant to this Agreement (the “Assigned Contracts List”).  Subject to the second sentence of Section 5.01(d), at any time and from time to time before the Closing Date (or in the case of (x) any lease pursuant to which the Leased Real Property is leased by a Seller, at any time and from time to time on or before 90 days after the Closing Date (the period of time from the Closing Date until the earlier of (i) the date that is 90 days after the Closing Date and (ii) the date
that Purchaser, by written notice to LGI, elects to exclude such lease from the Transactions, the “Lease Retention Period”) or (y) any Contract set forth on Annex I hereto (each, a “Specified Contract”), at any time and from time to time on or before 60 days after the Closing Date (the period of time from the Closing Date until the earlier of (I) the date that is 60 days after the Closing Date and (II) the date that Purchaser, by written notice to LGI, elects to exclude such Specified Contract from the Transactions, the “Specified Contract Retention Period”)), the Purchaser may, by written notice to LGI, elect to exclude from the Transactions and the Assigned Contracts List (i) any one or more of the Contracts that would otherwise be Purchased Assets (including any lease pursuant to which the Leased Real Property is
leased by a Seller) and (ii) any or more of the Permits and Licenses.  Any Contract or Permit and License designated in such a notice pursuant to the preceding 

 

sentence or designated as an Excluded Contract pursuant to the second sentence of Section 5.01(d) (each such designated Contract or Permit and License, an “Excluded Contract”, and all such designated Contracts and Permits and Licenses collectively, the “Excluded Contracts”) shall no longer be an Assigned Contract or a Permit and License to be assigned to the Purchaser hereunder.  There shall be no adjustment to the Purchase Price as a result of the Purchaser’s election to exclude any one or more of the Contracts or Permits and Licenses from the Transactions pursuant to this Section 5.01(a) except that the Purchaser shall not be required to make any payments for Determined Cure Costs or any other
amounts for any such Excluded Contracts, provided that, with respect to (x) any lease pursuant to which the Leased Real Property is leased by a Seller that would otherwise be a Purchased Asset and that Purchaser has not elected to exclude prior to the Closing, such lease shall be treated as a Consent Pending Contract under Section 2.12(b) and Purchaser shall compensate the Sellers with respect thereto in accordance with such Section except that the Contract Retention Period shall be deemed to be the Lease Retention Period for these purposes, and (y) any Specified Contract that would otherwise be a Purchased Asset and that Purchaser has not elected to exclude prior to the Closing, such Specified Contract shall be treated as a Consent Pending Contract under Section 2.12(b) and Purchaser shall compensate the Sellers with respect thereto in accordance with such Section except that the Contract Retention Period shall be deemed to be the
Specified Contract Retention Period for these purposes.”

 

	
2.
 	
Miscellaneous.
 

 

          (a)  Modification.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Asset Purchase Agreement, but except as expressly modified and superseded by this Amendment, the terms and provisions of the Asset Purchase Agreement shall remain in full force and effect, all parties hereto hereby agreeing that the Asset Purchase Agreement shall continue to be outstanding, validly existing and enforceable in accordance with its terms.

 

          (b)  Counterparts.  This Amendment may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.

 

          (c)  Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors (including any trustee, receiver, receiver-manager, interim receiver or monitor or similar officer appointed in respect of the Sellers in the Chapter 11 Cases) and permitted assigns, but shall not be assignable or delegable by the Sellers or Purchaser without the prior written consent of the other party and by Order of the Bankruptcy Court.  Notwithstanding the foregoing, (i) prior to the Closing, Purchaser shall have the right to assign its rights and/or delegate its obligations hereunder to any Affiliate that is directly or indirectly wholly owned by Purchaser and (ii) after the Closing, Purchaser (or its permitted assignee) shall have the
right to assign its rights and/or delegate its obligations hereunder (A) to any Affiliates, (B) to any financing sources for collateral purposes or (C) to any subsequent purchaser of all or substantially all of the stock or assets of Purchaser or the Business; provided, however, that in each case Purchaser shall remain liable for the obligations 

 

of any assignee to whom Purchaser assign its rights and/or obligations pursuant to this Section 2(c) except in the case of Section 2(c)(ii)(C) where the subsequent purchaser shall assume any such rights and/or obligations.

 

          (d)  Severability.  If any term or other provision of this Amendment is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Amendment shall nevertheless remain in full force and effect for so long as the economic or legal substance of the Transactions is not affected in any manner materially adverse to any party hereto.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Amendment so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the Transactions are consummated as originally contemplated to the greatest extent possible.

 

          (e)  This Amendment shall be governed by, and construed in accordance with, the Laws of the State of New York and, to the extent applicable, the Bankruptcy Code.  The parties hereto agree that the Bankruptcy Court shall be the exclusive forum for enforcement of this Amendment or the Transactions and (only for the limited purpose of such enforcement) submit to the jurisdiction thereof; provided that if the Bankruptcy Court determines that it does not have subject matter jurisdiction over any action or proceeding arising out of or relating to this Amendment, then each party:  (a) agrees that all such actions or proceedings shall be heard and determined in a New York federal court sitting in The City of New York; (b) irrevocably submits to the jurisdiction of such court in any such action or proceeding; (c) consents that any such
action or proceeding may be brought in such courts and waives any objection that such party may now or hereafter have to the venue or jurisdiction or that such action or proceeding was brought in an inconvenient court; and (d) agrees that service of process in any such action or proceeding may be effected by providing a copy thereof by any of the methods of delivery permitted by Section 11.02 of the Asset Purchase Agreement to such party at its address as provided in Section 11.02 of the Asset Purchase Agreement (provided that nothing herein shall affect the right to effect service of process in any other manner permitted by Law).

 

          (f)        Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT OR THE TRANSACTIONS.  EACH OF THE PARTIES HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AMENDMENT AND THE TRANSACTIONS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 2(f).

[Remainder of page intentionally left blank]

 

IN WITNESS WHEREOF, the Sellers and the Purchaser have caused this Amendment to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

	
 
 	
LENOX GROUP INC.
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
LENOX, INCORPORATED
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
LENOX WORLDWIDE, LLC
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
LENOX RETAIL, INC.
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
LENOX SALES, INC.
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 

 

	
 
 	
FL 56 INTERMEDIATE, CORP.
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
D 56, INC.
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
LDG-DELAWARE OPCO, INC.
 
	
 
 	
 
 	
 
 
	
 
 	
 
 	
 
 
	
 
 	
By:
 	
 
 
	
 
 	
 
 	
Name:
 
	
 
 	
 
 	
Title:
 

ANNEX I

SPECIFIED CONTRACTS

 

	
Chuck Fischer
 2715 N. Ocean Blvd #9E
 Fort Lauderdale, FL 33308
 	
2002
 	
Work-for-hire
 	
$0
 
	
Macquarie Equipment Finance
 GPO Drawer 67-865
 Detroit, MI
 	
10/19/2005
 	
Computer hardware lease agreement
 	
$0
 
	
Vovici Corporation
  
 Voice Corporation
 45365 Vintage Park Plaza
 Suite 250
 Dulles, VA 20166
 	
11/5/08
 	
Hosting Service for consumer website survey information
 	
$0
 
	
Resolute Management, Inc. 
 United Plaza
 30 S. 17th Street-Suite 700
 Philadelphia, PA 19103
 Attention: Alexandra S. Zajac
 	
11/18/2003
 	
Indemnification Agreement
 	
$0
 
	
Nationwide Indemnity Company 
 1431 Opus Place, Suite 100
 Downers Grove, IL 60515-1169
 Attention: Anita Smith
 	
5/5/1994
 	
Indemnification Agreement
 	
$0
 
	
Resolute Management, Inc. 
 United Plaza
 30 S. 17th Street-Suite 700
 Philadelphia, PA 19103
 Attention: Alexandra S. Zajac
 	
6/24/1994
 	
Indemnification Agreement
 	
$0
 
	
Nationwide Indemnity Company 
 1431 Opus Place, Suite 100
 Downers Grove, IL 60515-1169
 Attention: Anita Smith
 	
11/18/1994
 	
Indemnification Agreement
 	
$0
 
	
Resolute Management, Inc. 
 United Plaza
 30 S. 17th Street-Suite 700
 Philadelphia, PA 19103
 Attention: Alexandra S. Zajac
 	
9/29/1992
 	
Indemnification Agreement
 	
$0
 
	
Nationwide Indemnity Company 
 1431 Opus Place, Suite 100
 Downers Grove, IL 60515-1169
 Attention: Anita Smith
 	
11/20/1992
 	
Indemnification Agreement
 	
$0
 
	
Value Source  
 	
 
 	
Sources glass in China
 	
$1,999
 
	
J.D. Edwards & Company 
 One Technology Way
 Denver, Colorado 80237
 	
1/12/99
 	
Software License, Services and Maintenance Agreement
 	
$0
 

	
Metro Sales
 1620 East 78th St.
 Richfield, MN 55423
 	
1/25/08
 	
Copier lease
 	
$3,051
 
	
China International Intellectech (Shanghai) Corporation 
 	
 
 	
Employment Services Contract re: Chinese employees
 	
$0
 
	
DeLage Landen 
 P.O. Box 41601
 Philadelphia, PA 19101-1601
 	
1/25/08
 	
Copier lease (Petaluma)
 	
$0
 
	
Elbo Marketing and Sales Inc.
 128 Windgate Drive
 Chester Springs, PA 19425
 	
11/1/07
 	
Commission
 	
$0
 
	
Elbo Marketing and Sales Inc.
 128 Windgate Drive
 Chester Springs, PA 19425
 	
4/1/08
 	
Commission
 	
$0
 
	
Peggy Riel
 	
 
 	
Work-for-hire
 	
$0
 
	
Deloitte & Touche LLP 
 1700 Market Street
 Philadelphia, PA 19103-3984
 Attention: R. Kurt Williams
 	
04/04/2008
 	
Services for 2008 financial audit
 	
$0
 
	
Cimquest
 1545 Route 206, 2nd Floor
 Bedminster, NJ 07921
 Attn: Cheryl Short
 	
9/2/08
 	
Maintenance for 3D printer
 	
$0
 
	
Valasis Sales and Marketing Services
 19975 Victor Parkway
 Livonia, MI  48152
 Jeannie Coppola
 	
2/20/07
 	
Production
 	
$0
 
	
News America 
 1185 Avenue of the Americas
 New York, NY 10036
 Judy Dresner
 	
2/23/2007
 	
Advertising
 	
$0
 
	
Pitney Bowes Inc.
 2225 American Drive
 Neenah, WI 54956
 	
Unknown
 	
Lease – Hagerstown, MD
 Equipment
 Account #
 4309705
 Schedule 002
 	
$514.86
 
	
Pitney Bowes Inc.
 2225 American Drive
 Neenah, WI 54956
 	
Unknown
 	
Lease – Bristol, PA Equipment
 Account #
 0215848
 Schedule 005
 	
$0.00
 

 

	
Pitney Bowes Inc.
 2225 American Drive
 Neenah, WI 54956
 	
Unknown
 	
Lease – NJ
 Equipment
 Account
#
 1945402
 Schedule 003
 	
$0.00
 
	
Pitney Bowes Inc.
 2225 American Drive
 Neenah, WI 54956
 	
Unknown
 	
Lease – Langhorne, PA
 Equipment
 Account #
 1913-0329-86-5
 Postal Security Device
 	
$0.00
 
	
The Lamar Companies
 437 Fifth Avenue
 New York, NY 10016   
 	
1/1/09
 	
Billboard advertising services (Cranbury) 
 NJ Tpke. 8A
 	
$0.00
 
	
Fennelly Associates, Inc.
 Ibis Plaza
 3525 Quakerbridge Plaza
 Hamilton, NJ 08619  
 	
12/15/08
 	
Real Estate Consulting
 	
$0.00Exhibit 10.21 to Select Comfort Corp. Form 10-K for the Fiscal Year Ended January 3, 2009

Exhibit 10.21

SELECT COMFORT

EXECUTIVE INVESTMENT PLAN

(January 1, 2009 Revision)

As Amended and Restated on October 29, 2008

ADOPTION CERTIFICATE

WHEREAS, on December 20, 2002, Select Comfort Corporation adopted the
Select Comfort Executive Investment Plan; and 

WHEREAS, Select Comfort Corporation adopted the First Declaration of
Amendment to the Select Comfort Executive Investment Plan effective April 1,
2003 (“First Amendment”); and 

WHEREAS, Select Comfort Corporation adopted the Second Declaration of
Amendment to the Select Comfort Executive Investment Plan effective December
20, 2002 (“Second Amendment”); and 

WHEREAS, Select Comfort Corporation adopted the Third Declaration of
Amendment to the Select Comfort Executive Investment Plan effective February
16, 2004 (“Third Amendment”, and together with the First Amendment, Second
Amendment, and Third Amendment, the “Prior Amendments”). 

NOW, THEREFORE, Select Comfort Corporation hereby adopts this Amended
and Restated Select Comfort Executive Investment Plan (January 1, 2009
Revision) in the form attached hereto pursuant to the authority granted by
Select Comfort Corporation’s Board of Directors, to integrate the Prior
Amendments, and reflect additional amendments.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
SELECT COMFORT CORPORATION

	
 

	
 

	
 

	
 

	
 

	
Attest:

	
/s/ Mitchell
 W. Johnson

	
 

	
By

	
         /s/ Mark A.
 Kimball

	
Title:

	
Vice
 President & Assistant Secretary

	
 

	
Its

	
Senior Vice
 President & General Counsel

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
October 29,
 2008

TABLE OF CONTENTS

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Page

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 1. DESCRIPTION

	
 

	
1

	
 

	
1.1

	
Plan Name

	
 

	
1

	
 

	
1.2

	
Plan
 Purpose

	
 

	
1

	
 

	
1.3

	
Plan Type

	
 

	
1

	
 

	
1.4

	
Plan
 Effective Date

	
 

	
1

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 2. PARTICIPATION

	
 

	
2

	
 

	
2.1

	
Eligibility

	
 

	
2

	
 

	
2.2

	
Loss of
 Eligibility

	
 

	
2

	
 

	
2.3

	
Transfer
 Among Participating Employers

	
 

	
3

	
 

	
2.4

	
Multiple
 Employment

	
 

	
3

	
 

	
2.5

	
Conditions
 of Participation

	
 

	
3

	
 

	
2.6

	
Termination
 of Participation

	
 

	
3

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 3. BENEFITS

	
 

	
4

	
 

	
3.1

	
Participant
 Accounts

	
 

	
4

	
 

	
3.2

	
Participant
 Deferral Credits – Savings Account

	
 

	
4

	
 

	
3.3

	
Participant
 Deferral Credits – Fixed Period (Strategy 1) Account

	
 

	
6

	
 

	
3.4

	
Participant
 Deferral Credits – Fixed Period (Strategy 2) Account

	
 

	
8

	
 

	
3.5

	
Participating
 Employer Credits

	
 

	
10

	
 

	
3.6

	
Earnings
 Credits

	
 

	
10

	
 

	
3.7

	
Vesting

	
 

	
12

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 4. DISTRIBUTION

	
 

	
13

	
 

	
4.1

	
Distribution
 to Participant Before Severance or Disability

	
 

	
13

	
 

	
4.2

	
Distribution
 of Savings and Retirement Accounts to Participant After Termination Date

	
 

	
13

	
 

	
4.3

	
Distribution
 of Fixed Period (Strategy 1) and Fixed Period (Strategy 2) Accounts to
 Participant

	
 

	
14

	
 

	
4.4

	
Distribution
 to Beneficiary

	
 

	
15

	
 

	
4.5

	
Nondeductibility

	
 

	
16

	
 

	
4.6

	
Payment in
 Event of Incapacity

	
 

	
16

	
 

	
4.7

	
Five-Year
 Redeferral Election

	
 

	
16

	
 

	
4.8

	
Transition
 Period Election

	
 

	
16

	
 

	
4.9

	
Installment
 Distributions

	
 

	
17

	
 

	
4.10

	
Six-Month
 Suspension for Specified Employees

	
 

	
17

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 5. SOURCE OF PAYMENTS; NATURE OF
 INTEREST

	
 

	
18

	
 

	
5.1

	
Establishment
 of Trust

	
 

	
18

	
 

	
5.2

	
Source of
 Payments

	
 

	
18

	
 

	
5.3

	
Status of
 Plan

	
 

	
18

	
 

	
5.4

	
Non-assignability
 of Benefits

	
 

	
18

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 6. AMENDMENT, TERMINATION

	
 

	
19

	
 

	
6.1

	
Adoption

	
 

	
19

i

	
 

	
 

	
 

	
 

	
 

	
 

	
6.2

	
Amendment

	
 

	
19

	
 

	
6.3

	
Termination
 of Participation

	
 

	
19

	
 

	
6.4

	
Termination

	
 

	
20

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 7. DEFINITIONS, CONSTRUCTION AND
 INTERPRETATION

	
 

	
21

	
 

	
7.1

	
Cross
 Reference

	
 

	
21

	
 

	
7.2

	
Governing
 Law

	
 

	
21

	
 

	
7.3

	
Headings

	
 

	
21

	
 

	
7.4

	
Number and
 Gender

	
 

	
21

	
 

	
7.5

	
Definitions

	
 

	
21

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 8. ADMINISTRATION

	
 

	
25

	
 

	
8.1

	
Administrator

	
 

	
25

	
 

	
8.2

	
Plan Rules
 and Regulations

	
 

	
25

	
 

	
8.3

	
Administrator’s
 Discretion

	
 

	
25

	
 

	
8.4

	
Specialist’s
 Assistance

	
 

	
25

	
 

	
8.5

	
Indemnification

	
 

	
25

	
 

	
8.6

	
Benefit
 Claim Procedure

	
 

	
26

	
 

	
8.7

	
Disputes

	
 

	
27

	
 

	
 

	
 

	
 

	
 

	
ARTICLE 9. MISCELLANEOUS

	
 

	
28

	
 

	
9.1

	
Withholding
 and Offsets

	
 

	
28

	
 

	
9.2

	
Other
 Benefits

	
 

	
28

	
 

	
9.3

	
No
 Warranties Regarding Tax Treatment

	
 

	
28

	
 

	
9.4

	
No Rights to
 Continued Employment or Service Created

	
 

	
28

	
 

	
9.5

	
Special
 Provisions

	
 

	
28

	
 

	
9.6

	
Successors

	
 

	
28

ii

SELECT COMFORT

EXECUTIVE INVESTMENT PLAN

ARTICLE 1.

DESCRIPTION

	
 

	
 

	
 

	
1.1

	
Plan Name.

	
 

	
 

	
 

	
 

	
The name of
 the Plan is the “Select Comfort Executive Investment Plan.”

	
 

	
 

	
 

	
1.2

	
Plan Purpose.

	
 

	
 

	
 

	
 

	
The purposes
 of the Plan are to:

	
 

	
 

	
 

	
 

	
(a)

	
assist the
 Participating Employers in attracting and retaining Qualified Employees,

	
 

	
 

	
 

	
 

	
(b)

	
provide a
 tax-deferred capital accumulation vehicle for Qualified Employees, and

	
 

	
 

	
 

	
 

	
(c)

	
encourage
 additional retirement savings by Qualified Employees.

	
 

	
 

	
 

	
1.3

	
Plan Type.

	
 

	
 

	
 

	
          The Plan
 is an unfunded plan maintained primarily for the purpose of providing
 deferred compensation for a select group of management or highly compensated
 employees. It is intended that the Plan is exempt from the provisions of
 Parts 2, 3 and 4 of Subtitle B of Title I of ERISA by operation of sections
 201(2), 301(a)(3) and 401(a)(4) thereof, respectively, and from the
 provisions of Title IV of ERISA, to the extent otherwise applicable, by
 operation of section 4021(b)(6) thereof. The Plan is also intended to be
 unfunded for tax purposes. The Plan will be construed and administered in a
 manner that is consistent with and gives effect to the foregoing. All amounts
 defined under the Plan shall be subject to the provisions of Code section
 409A. The Plan is intended to comply in form and operation with Code Section
 409A. 

	
 

	
 

	
 

	
1.4

	
Plan Effective Date.

	
 

	
 

	
 

	
          The Plan
 is effective as of December 20, 2002. The plan as amended and restated is
 effective January 1, 2009 or such earlier date specified herein. 

1

ARTICLE 2.

PARTICIPATION

	
 

	
 

	
 

	
 

	
2.1

	
Eligibility.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
First Day of
 Plan Year. Prior to the beginning of each Plan Year,
 the Administrator will determine which Qualified Employees, if any, are
 eligible to defer Base Salary pursuant to Sections 3.2(a), 3.3(a) and 3.4(a)
 and Bonus pursuant to Sections 3.2(b), 3.3(b), and 3.4(b) with respect to the
 Plan Year.

	
 

	
 

	
 

	
 

	
 

	
(b)

	
During Plan
 Year. At any time during a Plan Year, the
 Administrator may determine that an individual who becomes a Qualified Employee
 after the first day of a Plan Year is eligible to defer Base Salary pursuant
 to Sections 3.2(a), 3.3(a) and 3.4(a) and Bonus pursuant to Sections 3.2(b),
 3.3(b), and 3.4(b) with respect to the remainder of the Plan Year.

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Annual
 Determination. The fact that an individual has been
 eligible to make deferral elections with respect to any particular Plan Year
 does not give the individual any right to make deferral elections with
 respect to any other Plan Year.

	
 

	
 

	
 

	
 

	
2.2

	
Loss of Eligibility.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Reasons.

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Ceasing to
 be Qualified Employee. An Active Participant will
 cease to be eligible to defer Base Salary and Bonus as of the date on which
 he or she ceases to be a Qualified Employee.

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Unforeseeable
 Emergency. A Participant who, pursuant to Section
 4.1(a), has received a distribution due to an Unforeseeable Emergency, is not
 eligible to defer Base Salary or Bonus with respect to the remainder of the
 Plan Year during which the revocation occurs or the distribution is received,
 as the case may be, and the immediately following Plan Year.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
401(k)
 Hardship Withdrawal. A Qualified Employee who
 receives a hardship withdrawal from a 401(k) plan maintained by a
 Participating Employer, or by any other employer required to be aggregated
 with the Participating Employer under Code section 414(b), (c), (m) or (o),
 is not eligible to defer Base Salary or Bonus under the Plan to the extent
 required to comply with the terms of the 401(k) Plan. For each Plan Year
 during which a deferral is not permitted, the deferral election is cancelled
 through the end of the Plan Year, with any new election subject to the
 deferral election requirements of Sections 3.2, 3.3, and 3.4

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Affect on
 Deferral Elections. An Active Participant’s deferral
 election for a Plan Year is irrevocable after the latest day on which the
 election may be made except

2

	
 

	
 

	
 

	
 

	
 

	
in the event of a distribution under Section 2.2(a)(ii) or on account
 of a 401(k) hardship withdrawal under Section 2.2(a)(iii).

	
 

	
 

	
2.3

	
Transfer Among Participating Employers.

	
 

	
 

	
          An Active
 Participant who transfers employment from one Participating Employer to
 another Participating Employer and who continues to be a Qualified Employee
 after the transfer will, for the duration of the Plan Year during which the
 transfer occurs, continue to participate in the Plan, in accordance with the
 election in effect for the portion of the Plan Year before the transfer, as a
 Qualified Employee of such other Participating Employer. In addition, an
 Active Participant who transfers to an Affiliate of a Participating Employer
 will, for the duration of the Plan Year during which the transfer occurs,
 continue to participate in Participant deferral Credits pursuant to Sections
 3.2, 3.3, and 3.4 in accordance with the Active Participant’s election in
 effect before the transfer.

	
 

	
 

	
2.4

	
Multiple Employment.

	
 

	
 

	
          An Active
 Participant who is simultaneously employed as a Qualified Employee with more
 than one Participating Employer will participate in the Plan as a Qualified
 Employee of all such Participating Employers on the basis of a single
 deferral election pursuant to Sections 3.2, 3.3, or 3.4 applied ratably to
 his or her Base Salary or Bonus from each Participating Employer if his or her
 deferral election was made in a dollar amount or applied separately to his or
 her Base Salary or Bonus from each Participating Employer if his or her
 deferral election was made in a percentage.

	
 

	
 

	
2.5

	
Conditions of Participation.

	
 

	
 

	
          Each Qualified
 Employee, as a condition of participation in the Plan, is bound by all the
 terms and conditions of the Plan and the Plan Rules, and must furnish to the
 Administrator such pertinent information and execute such election forms and
 other instruments as the Administrator or Plan Rules may require by such
 dates as the Administrator or Plan Rules may establish. All elections,
 directions, designations and similar actions required in connection with the
 Plan must be made in accordance with and are subject to the terms of the Plan
 and Plan Rules.

	
 

	
 

	
2.6

	
Termination of Participation.

	
 

	
 

	
          A
 Participant will cease to be such as of the date on which he or she is not
 then eligible to make deferrals and his or her entire vested Account balances
 have been distributed.

3

ARTICLE 3.

BENEFITS

	
 

	
 

	
 

	
 

	
3.1

	
Participant Accounts.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Participant Accounts. For each Participant,
 the Administrator will establish and maintain one or more separate
 bookkeeping accounts as follows:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
deferrals elected by the Participant pursuant to Section 3.2 will be
 credited to his or her Savings Account;

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
deferrals elected by the Participant pursuant to Section 3.3 will be
 credited to his or her Fixed Period (Strategy 1) Account that includes a
 subaccount established and maintained for the Participant in connection with
 each deferral election made pursuant to Section 3.3;

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
deferrals elected by the Participant pursuant to Section 3.4 will be
 credited to his or her Fixed Period (Strategy 2) Account that includes a
 subaccount established and maintained for the Participant in connection with
 each deferral election made pursuant to Section 3.4; and 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
credits made on the Participant’s behalf (if any) pursuant to Section
 3.5 will be credited to his or her Retirement Account.

	
 

	
 

	
 

	
 

	
3.2

	
Participant Deferral Credits – Savings
 Account.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Base Salary. Base Salary deferrals will be
 made in accordance with the following rules:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
An Active Participant may elect to defer his or her Base Salary for a
 Plan Year from a minimum percentage or dollar amount to a maximum percentage
 or dollar amount, as specified in Plan Rules. Plan Rules may specify minimum
 and maximum deferral amounts for a Plan Year, any period within a Plan Year
 or both.

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
An election made pursuant to this subsection will not be effective
 unless it is made on a properly completed election form received by the
 Administrator by a date specified by the Administrator which is prior to the
 first day of the Plan Year to which the election relates or, in the case of
 an individual who becomes eligible to participate after the first day of a
 Plan Year, within 30 days after he or she becomes eligible to participate.
 The special 30-day rule is only applicable to an individual who during the
 preceding 24-month period was not eligible to participate in this Plan or any
 other non-qualified deferred compensation plan maintained by the Company or
 an Affiliate that is required to be treated as a single plan with the Plan
 under Code Section 409A.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
Intentionally
 omitted.

4

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
Any election
 pursuant to this subsection applies only to Base Salary relating to services
 performed after the effective date of the election.

	
 

	
 

	
 

	
 

	
 

	
 

	
(v)

	
One-Time
 Election. In connection with the amendment of the
 plan to add the Fixed Period (Strategy 1) Account and Fixed Period (Strategy
 2) Account options under Sections 3.3 and 3.4, an Active Participant may
 revoke or modify his or her election under this Subsection (a) for the period
 from April 1, 2003 to December 31, 2003 and elect to defer Base Salary
 pursuant to Section 3.3 or Section 3.4 for the period from April 1, 2003 to
 December 31, 2003 by submitting a properly completed election form to the
 Administrator by March 31, 2003. 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Bonus.
 Bonus deferrals will be made in accordance with the following rules:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
An Active
 Participant may elect to defer all or any portion of his or her Bonus for the
 Plan Year from a minimum percentage or dollar amount to a maximum percentage
 or dollar amount, as specified in Plan Rules.

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
An election
 made by an Active Participant pursuant to this subsection will not be
 effective unless it is made on a properly completed election form received by
 the Administrator prior to the first day of the Plan Year to which the
 election relates and shall apply to the bonus that relates solely to services
 performed on or after the beginning of such Plan Year.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
Intentionally
 omitted.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
Notwithstanding
 the foregoing provisions of this Subsection (b), an Active Participant may
 elect to defer all or any portion of his or her Bonus that is to be
 determined and paid to such Active Participant in 2003, by submitting a
 properly completed election form to the Administrator by December 20, 2002.

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Limitations.
 The Administrator may, prior to the effective date of a Participant’s
 election, limit the amount of the Participant’s deferral to be made under
 this section to account for other anticipated payroll deductions. In
 addition, Plan Rules may specify individual or aggregate annual or lifetime
 deferral limitations.

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Allocation
 to Savings Account. An Active Participant’s
 deferrals pursuant to this section will be allocated to his or her Savings
 Account.

	
 

	
 

	
 

	
 

	
 

	
(e)

	
Timing of
 Credits. Deferrals of an Active Participant’s Base
 Salary and Bonus pursuant to this section will be credited to his or her
 Savings Account as of the date on which the Participant would have otherwise
 received the Base Salary or Bonus but for his or her deferral election
 pursuant to this section.

5

	
 

	
 

	
 

	
 

	
3.3

	
Participant Deferral Credits – Fixed Period
 (Strategy 1) Account.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Base Salary. Base Salary deferrals will be
 made in accordance with the following rules:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
An Active Participant may elect to defer his or her Base Salary for a
 Plan Year from a minimum percentage or dollar amount to a maximum percentage
 or dollar amount, as specified in Plan Rules. Plan Rules may specify minimum
 and maximum deferral amounts for a Plan Year, any period within a Plan Year
 or both.

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
An election made pursuant to this subsection will not be effective
 unless it is made on a properly completed election form received by the
 Administrator by a date specified by the Administrator which is prior to the
 first day of the Plan Year to which the election relates or, in the case of
 an individual who becomes eligible to participate after the first day of a
 Plan Year, within 30 days after he or she becomes eligible to participate.
 The special 30-day rule is only applicable to an individual who during the
 preceding 24-month period was not eligible to participate in this Plan or any
 other non-qualified deferred compensation plan maintained by the Company or
 an Affiliate that is required to be treated as a single plan with the Plan
 under Code Section 409A.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
Intentionally omitted.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
Any election pursuant to this subsection applies only to Base Salary
 relating to services performed after the effective date of the election.

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Bonus. Bonus deferrals will be made in
 accordance with the following rules:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
An Active Participant may elect to defer all or any portion of his or
 her Bonus for the Plan Year from a minimum percentage or dollar amount to a
 maximum percentage or dollar amount, as specified in Plan Rules.

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
An election made by an Active Participant pursuant to this subsection
 will not be effective unless it is made on a properly completed election form
 received by the Administrator prior to the first day of the Plan Year to
 which the election relates and shall apply to the Bonus that relates solely
 to services performed on or after the beginning of such Plan Year.

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Limitations. The Administrator may, prior to
 the effective date of an Active Participant’s election, limit the amount of
 the Active Participant’s deferral to be made under this section to account
 for other anticipated payroll deductions. In addition, Plan Rules may specify
 individual or aggregate annual or lifetime deferral limitations.

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Allocation to Fixed Period (Strategy 1) Account and Subaccounts.
 An Active Participant’s deferrals pursuant to this section will be allocated
 to his or her Fixed 

6

	
 

	
 

	
 

	
 

	
 

	
Period (Strategy 1) Account. Each election made under Subsection (a)
 or Subsection (b) for a particular Plan Year will be credited to a
 subaccount.

	
 

	
 

	
 

	
 

	
(e)

	
Timing of Credits. Deferrals of an Active
 Participant’s Base Salary and Bonus pursuant to this section will be credited
 to his or her Fixed Period (Strategy 1) Account as of the date on which the
 Participant would have otherwise received the Base Salary or Bonus but for
 his or her deferral election pursuant to this section.

	
 

	
 

	
 

	
 

	
(f)

	
2003 Deferral Election. In connection with
 the amendment of the Plan to add the Fixed Period (Strategy 1) Account and
 Fixed Period (Strategy 2) Account options under Sections 3.3 and 3.4, an
 Active Participant may elect to defer Base Salary pursuant to Subsection (a)
 for the period from April 1, 2003 to December 31, 2003, by submitting a
 properly completed election form to the Administrator by March 31, 2003.

	
 

	
 

	
 

	
 

	
(g)

	
One-Time Transfer Election. In connection
 with the amendment of the Plan to add the Fixed Period (Strategy 1) Account
 and Fixed Period (Strategy 2) Account options under Sections 3.3 and 3.4, an
 Active Participant may, no later than April 1, 2003, transfer all or a
 portion of the vested balance of his or her Savings Account to his or her
 Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account;
 provided that the distribution of such transferred vested balance will not be
 distributed to the Participant earlier than January 1, 2006. Notwithstanding
 the foregoing, if the Participant’s Termination Date is in 2003 or 2004
 distribution of any amount transferred pursuant to this paragraph (g), plus
 earnings credited to such amount, will be made in a lump sum payment pursuant
 to the provisions of Section 4.2.

	
 

	
 

	
 

	
 

	
(h)

	
One-Time Change to Distribution Election of Fixed Period Accounts.
 Due to an administrative error in communicating the distribution options
 available to a Participant who elects to defer Base Salary or Bonus pursuant
 to the Fixed Period (Strategy 1) Account and Fixed Period (Strategy 2)
 Account options under Sections 3.3 and 3.4, an Active Participant will be
 allowed to make a one-time election to modify the distribution election(s)
 the Participant made with respect to any subaccount established under the
 Fixed Period (Strategy 1) Account and Fixed Period (Strategy 2) Account for
 the period from April 1, 2003 to December 31, 2003 and the period from
 January 1, 2004 to December 31, 2004. In addition to the original
 distribution election the Participant made for any such subaccount, an Active
 Participant may elect whether, in the event the Participant has not received
 a distribution of the entire balance of such subaccount as of his or her
 Termination Date, to receive distribution of the entire balance of such
 subaccount in a single lump sum payment as soon as administratively
 practicable after the last day of the Plan Year that includes the
 Participant’s Termination Date. An Active Participant may make an election
 pursuant to this section by submitting a properly completed election form to
 the Administrator by March 31, 2004. 

7

	
 

	
 

	
 

	
 

	
3.4

	
Participant Deferral Credits – Fixed Period
 (Strategy 2) Account.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Base Salary. Base Salary deferrals will be
 made in accordance with the following rules:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
An Active Participant may elect to defer his or her Base Salary for a
 Plan Year from a minimum percentage or dollar amount to a maximum percentage
 or dollar amount, as specified in Plan Rules. Plan Rules may specify minimum
 and maximum deferral amounts for a Plan Year, any period within a Plan Year
 or both.

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
An election made pursuant to this subsection will not be effective
 unless it is made on a properly completed election form received by the
 Administrator by a date specified by the Administrator which is prior to the
 first day of the Plan Year to which the election relates or, in the case of
 an individual who becomes eligible to participate after the first day of a
 Plan Year, within 30 days after he or she becomes eligible to participate.
 The special 30-day rule is only applicable to an individual who during the
 preceding 24-month period was not eligible to participate in this Plan or any
 other non-qualified deferred compensation plan maintained by the Company or
 an Affiliate that is required to be treated as a single plan with the Plan
 under Code Section 409A.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
Intentionally omitted.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
Any election pursuant to this subsection applies only to Base Salary
 relating to services performed after the effective date of the election.

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Bonus. Bonus deferrals will be made in
 accordance with the following rules:

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
An Active Participant may elect to defer all or any portion of his or
 her Bonus for the Plan Year from a minimum percentage or dollar amount to a
 maximum percentage or dollar amount, as specified in Plan Rules.

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
An election made by an Active Participant pursuant to this subsection
 will not be effective unless it is made on a properly completed election form
 received by the Administrator prior to the first day of the Plan Year to
 which the election relates and shall apply to the Bonus that relates solely
 to services performed on or after the beginning of such Plan Year.

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
Intentionally omitted.

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Limitations. The Administrator may, prior to
 the effective date of a Participant’s election, limit the amount of the
 Participant’s deferral to be made under this section to account for other
 anticipated payroll deductions. In addition, Plan Rules may specify
 individual or aggregate annual or lifetime deferral limitations.

8

	
 

	
 

	
 

	
 

	
(d)

	
Allocation to Fixed Period (Strategy 2) Account.
 An Active Participant’s deferrals pursuant to this section will be allocated
 to his or her Fixed Period (Strategy 2) Account. Each election made under
 Subsection (a) or Subsection (b) for a particular Plan Year will be credited
 to a subaccount.

	
 

	
 

	
 

	
 

	
(e)

	
Timing of Credits. Deferrals of an Active
 Participant’s Base Salary and Bonus pursuant to this section will be credited
 to his or her Fixed Period (Strategy 2) Account as of the date on which the
 Participant would have otherwise received the Base Salary or Bonus but for
 his or her deferral election pursuant to this section.

	
 

	
 

	
 

	
 

	
(f)

	
2003 Deferral Election. In connection with
 the amendment of the Plan to add the Fixed Period (Strategy 1) Account and
 Fixed Period (Strategy 2) Account options under Sections 3.3 and 3.4, an
 Active Participant may elect to defer Base Salary pursuant to Subsection (a)
 for the period from April 1, 2003 to December 31, 2003, by submitting a
 properly completed election form to the Administrator by March 31, 2003.

	
 

	
 

	
 

	
 

	
(g)

	
One-Time Transfer Election. In connection
 with the amendment of the Plan to add the Fixed Period (Strategy 1) Account
 and Fixed Period (Strategy 2) Account options under Sections 3.3 and 3.4, an
 Active Participant may, no later than April 1, 2003, transfer all or a
 portion of the vested balance of his or her Savings Account to his or her
 Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account;
 provided that the distribution of such transferred vested balance will not be
 distributed to the Participant earlier than January 1, 2006. Notwithstanding
 the foregoing, if the Participant’s Termination Date is in 2003 or 2004
 distribution of any amount transferred pursuant to this paragraph (g), plus
 earnings credited to such amount, will be made in a lump sum payment pursuant
 to the provisions of Section 4.2.

	
 

	
 

	
 

	
 

	
(h)

	
One-Time Change to Distribution Election of Fixed Period Accounts.
 Due to an administrative error in communicating the distribution options
 available to a Participant who elects to defer Base Salary or Bonus pursuant
 to the Fixed Period (Strategy 1) Account and Fixed Period (Strategy 2)
 Account options under Sections 3.3 and 3.4, an Active Participant will be
 allowed to make a one-time election to modify the distribution election(s)
 the Participant made with respect to any subaccount established under the
 Fixed Period (Strategy 1) Account and Fixed Period (Strategy 2) Account for
 the period from April 1, 2003 to December 31, 2003 and the period from
 January 1, 2004 to December 31, 2004. In addition to the original
 distribution election the Participant made for any such subaccount, an Active
 Participant may elect whether, in the event the Participant has not received
 a distribution of the entire balance of such subaccount as of his or her
 Termination Date, to receive distribution of the entire balance of such
 subaccount in a single lump sum payment as soon as administratively
 practicable after the last day of the Plan Year that includes the
 Participant’s Termination Date. An Active Participant may make an election
 pursuant to this section by submitting a properly completed election form to
 the Administrator by March 31, 2004.

9

	
 

	
 

	
 

	
3.5

	
Participating Employer Credits.

	
 

	
 

	
 

	
          A
 Participating Employer may from time to time credit the Retirement Account of
 any Participant with an amount determined by the Participating Employer. If a
 Participating Employer chooses to make such a credit, the Company will
 provide the Participant with a written notice that specifies the amount of
 the credit, the timing of the credit and, any conditions that the Participant
 must satisfy to be entitled to the credit. Credits pursuant to this
 subsection will be made, if at all, on a Participant-by-Participant basis. If
 a Participating Employer chooses to credit the Retirement Account of a
 Participant pursuant to this subsection, the Participating Employer is not,
 as a result, required to make any credit to the Retirement Account of any
 other Participant, whether or not he or she is otherwise similarly situated.

	
 

	
 

	
 

	
3.6

	
Earnings Credits.

	
 

	
 

	
 

	
 

	
(a)

	
Designation
 of Investment Funds. The Administrator will
 designate two or more investment funds that will serve as the basis for
 determining adjustments pursuant to this section. The Administrator may, from
 time to time, designate additional investment funds or eliminate any
 previously designated investment funds. The designation or elimination of a
 fund pursuant to this subsection is not a Plan amendment. The Administrator
 will not be responsible in any manner to any Participant or other person for
 any damages, losses, liabilities, costs or expenses of any kind arising in
 connection with any designation or elimination of an investment fund.

	
 

	
 

	
 

	
 

	
(b)

	
Participant
 Direction. A Participant must direct the manner in
 which amounts credited to his or her Accounts pursuant to Sections 3.2, 3.3,
 3.4 or 3.5 will be deemed to be invested among the investment funds
 designated pursuant to Subsection (a). Amounts will be deemed to be invested
 in accordance with the Participant’s direction on or as soon as
 administratively practicable after the amounts are credited to the
 Participant’s Account. To the extent a Participant fails to direct the manner
 in which amounts credited to his or her Accounts will be deemed to be
 invested, such amounts will deemed to be invested in the manner specified in
 Plan Rules.

	
 

	
 

	
 

	
 

	
(c)

	
Change in
 Direction for Future Credits. A Participant may
 direct a change in the manner in which future credits to his or her Accounts
 pursuant to Sections 3.2, 3.3, 3.4 or 3.5 will be deemed to be invested among
 the investment funds designated pursuant to Subsection (a). The direction
 will be effective for deferrals credited to the Participant’s Account
 pursuant to Sections 3.2, 3.3, 3.4 or 3.5 at least 30 days (or such shorter
 period as Plan Rules may allow) after the date on which the Administrator
 receives the direction from the Participant.

	
 

	
 

	
 

	
 

	
(d)

	
Change in
 Direction for Existing Account Balance. A
 Participant may direct a change in the manner in which his or her existing
 Account balances are deemed to be invested among the investment funds
 designated pursuant to Subsection (a). 

10

	
 

	
 

	
 

	
 

	
 

	
The direction will be effective as soon as administratively
 practicable after the date on which the Administrator receives the direction
 from the Participant.

	
 

	
 

	
 

	
 

	
(e)

	
Account Adjustment. As of the close of
 business on each day on which the New York Stock Exchange is open for regular
 business, the Administrator will cause Participants’ Accounts to be
 separately adjusted, in a manner determined by the Administrator to be
 uniform and equitable, to reflect the income, expense, gains, losses, fees
 and the like (other than taxes) that would have resulted since the last
 adjustment had the Participant’s investment directions pursuant to this
 section actually been implemented. For purposes of this subsection, an amount
 will be deemed to have been invested in accordance with a Participant’s
 direction by the fifth business day after (i) the date on which the amount is
 credited to the Participant’s Account in the case of a direction pursuant to
 Subsection (b) or Subsection (c) or (ii) the effective date of a direction
 pursuant to Subsection (d). To the extent determined by the Administrator to
 be necessary in conjunction with any distribution pursuant to the Plan, the
 Administrator will cause the Account from which the distribution is to be
 made to be adjusted to reflect a good faith estimate by the Administrator of
 any fees and other expenditures payable after the date of the distribution in
 connection with deemed investment activity in the Account through and
 including the date of the distribution. Any such estimate is binding on the
 Participating Employer and the person to whom the distribution is made.

	
 

	
 

	
 

	
 

	
(f)

	
Obligations and Responsibilities of Administrator.
 The sole obligation of the Administrator with respect to the designation or
 elimination of any investment fund designated pursuant to Subsection (a) is
 to act in accordance with the express terms of Subsection (a). By way of
 example and without limiting the previous sentence, the Administrator is not
 required, and no course of conduct will cause it to be required, to
 investigate or monitor any designated fund to any extent or for any purpose
 or to take or refrain from taking any action with respect to a fund because
 of any aspect of the performance of the fund. The designation of a limited
 number of investment funds is solely for administrative convenience and in no
 way reflects any endorsement of any such funds by the Administrator. 

	
 

	
 

	
 

	
 

	
(g)

	
Deemed Investment. Trust assets are not
 required to be invested in accordance with a Participant’s directions and the
 balance of all Accounts pursuant to the Plan will be determined pursuant to
 this section and other applicable sections of the Plan without regard to the
 actual amount of Trust assets.

	
 

	
 

	
 

	
 

	
(h)

	
Participant Responsibilities. Each
 Participant is solely responsible for any and all consequences of his or her
 investment directions made pursuant to this section. Neither any
 Participating Employer, any of its directors, officers or employers, the
 Company’s Board nor the Administrator has any responsibility to any
 Participant or other person for any damages, losses, liabilities, costs or
 expenses of any kind arising in connection with any investment direction made
 by a Participant pursuant to this section.

11

	
 

	
 

	
 

	
3.7

	
Vesting.

	
 

	
 

	
 

	
 

	
(a)

	
Each Participant always has a fully vested nonforfeitable interest in
 his or her Savings Account, Fixed Period (Strategy 1) Account and Fixed
 Period (Strategy 2) Account.

	
 

	
 

	
 

	
 

	
(b)

	
A Participant will acquire a fully vested nonforfeitable interest in
 his or her Retirement Account if he or she dies or becomes disabled on or
 prior to his or her Termination Date.

	
 

	
 

	
 

	
 

	
(c)

	
A Participant whose Retirement Account is not otherwise fully vested
 will acquire a vested nonforfeitable interest in the portion of his or her
 Retirement Account to the extent provided in the following schedule based on
 the Participant’s Years of Service:

	
 

	
 

	
 

	
 

	
Full Years
of Service 

	
 

	
Vested

Interest 

	 

	
 

	 

	
 

	
 

	
 

	
 

	
Less than
 One Year

	
 

	
0

	
%

	
At least One
 Year

	
 

	
25

	
%

	
At least Two
 Years

	
 

	
50

	
%

	
At least
 Three Years

	
 

	
75

	
%

	
Four or More
 Years

	
 

	
100

	
%

12

ARTICLE 4.

DISTRIBUTION

	
 

	
 

	
 

	
 

	
4.1

	
Distribution to Participant Before
 Severance or Disability.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Withdrawals Due to Unforeseeable Emergency.
 Prior to a Participant’s Termination Date, a distribution will be made to a
 Participant from his or her vested Accounts if the Participant submits a
 written distribution request to the Administrator and the Administrator
 determines that the Participant has experienced an Unforeseeable Emergency.
 The amount of the distribution may not exceed the lesser of (i) the amount
 necessary to satisfy the emergency, as determined by the Administrator or
 (ii) the vested balance of the Accounts. The distribution will be made in the
 form of a lump sum cash payment as soon as administratively practicable (but
 not more than 90 days) after the Administrator’s determination that the
 Participant has experienced an Unforeseeable Emergency. Any distribution
 pursuant to this subsection will be made in the following order: first, from
 the Participant’s Savings Account; second, from his or her Fixed Period
 (Strategy 1) Account; third, from his or her Fixed Period (Strategy 2)
 Account; and fourth, from his or her Retirement Account. 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Reduction of Account Balance. The balances
 of a Participant’s Accounts will be reduced (but not below zero) by the
 amount of the distribution as of the date of the distribution. 

	
 

	
 

	
 

	
 

	
4.2

	
Distribution of Savings and Retirement
 Accounts to Participant After Termination Date.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Time. Distribution to a Participant of the
 vested balance of his or her Savings and Retirement Accounts will be made or
 commence as soon as administratively practicable (but not more than 90 days)
 after the Participant’s Termination Date. 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Form. Distribution to the Participant of the
 vested balance of his or her Savings and Retirement Accounts will be made in
 the form of a single lump sum cash payment unless the Participant has made a
 written election to receive his or her distribution in the form of ten annual
 installment cash payments on a properly completed election form filed with
 the Administrator at the time of his or her written elections to defer Base
 Salary or Bonus pursuant to Section 3.2. 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Amount.

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Lump Sum. The amount of a lump sum payment
 from a Participant’s Savings and Retirement Accounts will be equal to the
 vested balances of the Accounts. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Installments. The amount of an installment
 payment from a Participant’s Savings and Retirement Accounts will be
 determined by dividing the vested balances of the Savings and Retirement
 Accounts by the total 

13

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
number of remaining payments (including the current payment). The
 undistributed portion of a Savings or Retirement Account distributed in the
 form of installment payments will continue to be credited with earnings in
 accordance with Section 3.6.

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Reduction of Account Balances. The balance
 of the Accounts will be reduced (but not below zero) by the amount of the
 distribution as of the date of the distribution. 

	
 

	
 

	
 

	
 

	
4.3

	
Distribution of Fixed Period (Strategy 1)
 and Fixed Period (Strategy 2) Accounts to Participant.
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Time. Distribution to a Participant of the
 vested balance of each of his or her subaccounts under the Fixed Period
 (Strategy 1) Account and Fixed Period (Strategy 2) Account will be made or
 commence on the dates elected by the Participant at the time of his or her
 written elections to defer Base Salary or Bonus pursuant to Section 3.3. or
 3.4. 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Form. Distribution to the Participant of the
 vested balance of his or her subaccounts under the Fixed Period (Strategy 1)
 Account or Fixed Period (Strategy 2) Account will be made in the form of a
 lump sum cash payment or in the form of four annual installment cash
 payments, as elected by the Participant at the time of his or her written
 election to defer Base Salary or Bonus pursuant to Section 3.3 or 3.4. 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Amount. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Lump Sum. The amount of a lump sum payment
 from a Participant’s subaccount under the Fixed Period (Strategy 1) Account
 or Fixed Period (Strategy 2) Account will be equal to the vested balance of
 the subaccount. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Installments. The amount of an installment
 payment from a Participant’s subaccount under the Fixed Period (Strategy 1)
 Account or Fixed Period (Strategy 2) Account will be determined by dividing
 the vested balance of the subaccount under the Fixed Period (Strategy 1)
 Account or Fixed Period (Strategy 2) Account, as the case may be, by the
 total number of remaining payments (including the current payment). The
 undistributed portion of a subaccount distributed in the form of installment
 payments will continue to be credited with earnings in accordance with
 Section 3.6. 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Reduction of Subaccount Balances. The
 balance of a subaccount under the Fixed Period (Strategy 1) Account and Fixed
 Period (Strategy 2) Account will be reduced (but not below zero) by the
 amount of the distribution as of the date of the distribution. 

14

	
 

	
 

	
 

	
 

	
 

	
4.4

	
Distribution to Beneficiary.

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Time. Distribution to a Beneficiary will be
 made as soon as administratively practicable (but not more than 90 days)
 after the Participant’s death. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Form. Distribution to the Beneficiary will
 be made in the form of a lump sum cash payment whether or not payments had
 commenced to the Participant in the form of installments prior to his or her
 death. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Amount. The amount of a lump sum payment
 will be equal to the balance of the deceased Participant’s Accounts. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Reduction of Account Balance. The balances
 of the Accounts will be reduced (but not below zero) by the amount of the
 distribution as of the date of the distribution. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(e)

	
Beneficiary Designation. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(i)

	
Each Participant may designate, on a form furnished by the
 Administrator, one or more primary Beneficiaries or alternative Beneficiaries
 to receive all or a specified part of his or her Accounts after his or her
 death, and the Participant may change or revoke any such designation from
 time to time. No such designation, change or revocation is effective unless
 executed by the Participant and received by the Administrator during the
 Participant’s lifetime. 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
If a Participant— 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
fails to designate a Beneficiary, or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
revokes a Beneficiary designation without naming another Beneficiary,
 or 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
designates one or more Beneficiaries, none of whom survives the
 Participant or exists at the time in question, 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
for all or any portion of his or her Account, such Account or portion
 will be paid to the Participant’s surviving spouse or, if the Participant is
 not survived by a spouse, to the representative of the Participant’s estate.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
The automatic Beneficiaries specified above and, unless the
 designation otherwise specifies, the Beneficiaries designated by the
 Participant, become fixed as of the Participant’s death so that, if a
 Beneficiary survives the Participant but dies before the receipt of the
 payment due such Beneficiary, the payment will be made to the representative
 of such Beneficiary’s estate. Any designation of a Beneficiary by name that
 is accompanied by a description of relationship or only by statement of
 relationship to the Participant is effective only to designate the person or
 persons standing in such relationship to the Participant at the Participant’s
 death.

15

	
 

	
 

	
4.5

	
Nondeductibility. 

          If the
Company determines in good faith that there is a reasonable likelihood that any
compensation paid to a Participant by an Affiliate for a taxable year of the
Affiliate would not be deductible by the Affiliate solely by reason of the
limitation under Code section 162(m), to the extent deemed necessary by the
Company to ensure that the entire amount of any distribution to the Participant
pursuant to the Plan is deductible, notwithstanding any other provision of the
Plan or any election by the Participant to the contrary, all or any portion of
the distribution may be deferred. Any amounts deferred pursuant to this section
will continue to be credited with earnings in accordance with Section 3.6. The
deferred amounts and earnings thereon will be distributed to the Participant,
or to his or her Beneficiary in the case of the Participant’s death, at the
earliest possible date, as determined by the Company in good faith, on which
the deductibility of compensation paid or payable to the Participant for the
taxable year of the Affiliate during which the distribution is made will not be
limited by Code section 162(m). 

	
 

	
 

	
4.6

	
Payment in Event of Incapacity. 

          If any
individual entitled to receive any payment under the Plan is, in the judgment
of the Administrator, physically, mentally or legally incapable of receiving or
acknowledging receipt of the payment, and no legal representative has been
appointed for the individual, the Administrator may (but is not required to)
cause the payment to be made to any one or more of the following as may be
chosen by the Administrator: the Beneficiary (in the case of the incapacity of
a Participant); the institution maintaining the individual; a custodian for the
individual under the Uniform Transfers to Minors Act of any state; or the
individual’s spouse, children, parents, or other relatives by blood or
marriage. The Administrator is not required to see to the proper application of
any such payment and the payment completely discharges all claims under the
Plan against the Participating Employer, the Plan and Trust to the extent of
the payment. 

	
 

	
 

	
4.7

	
Five-Year Redeferral Election. 

          Notwithstanding
Section 4.2, on or after January 1, 2009, a Participant may elect to change the
form of his or her distribution or delay the commencement date specified in a
prior distribution election. An election pursuant to this Section will not have
any effect unless the election (a) is made on a properly completed form
received by the Administrator at least twelve (12) months prior to the date
that the Participant’s scheduled payment was to begin, (b) is not effective
until at least twelve (12) months after the date on which the election is made,
and (c) delays the payment at least five (5) years beyond the distribution date
originally specified. An election under this Section 4.7 will not change the
form or time of distribution upon the Participant’s death as provided under
Section 4.4 

	
 

	
 

	
4.8

	
Transition Period Election. 

          Notwithstanding
any provisions of this Plan to the contrary, during calendar year 2008, the
Company may, at the time and in the manner prescribed by Plan Rules, permit a
Participant (who is not classified by the Company as a Senior Vice President or
higher) to elect to receive a 

16

distribution on a fixed date or dates not earlier than January 1, 2009,
of all or a portion of the Participant’s Accounts, including any remaining
installment distributions payable after 2008, provided, however, such election
shall not apply to any amounts the Participant has designated as being deemed
to be invested in Company stock. 

	
 

	
 

	
4.9

	
Installment Distributions 

          With
respect to any installment distribution, for purposes of Code Section 409A,
each installment payment shall be considered a separate payment. 

	
 

	
 

	
4.10

	
Six-Month Suspension for Specified Employees 

          If a
Participant is a Specified Employee on his or her Termination Date,
distribution under this Plan made on account of such Participant’s Termination
of Employment will be suspended and not made on until the first date following
the end of the six-month period following the Participant’s Termination Date.
For this purpose, a ‘Specified Employee’ means a Participant who, on his or her
Termination Date, is a ‘key employee’ (as defined below), and the Company or an
Affiliate has stock that is traded on an established securities market (within
the meaning of Code Section 409A(a )(2)(B)). The Participant is a ‘key employee’
during the 12-month period beginning on the April 1 immediately following a
calendar year at any time during which such Participant was a key employee as
defined in Code Section 416(i) (without regard to Code Section 416(i)(5)) of
the Company or an Affiliate. A Participant will not be treated as a Specified
Employee if he or she would not be a ‘specified employee’ as defined under
Treasury regulations issued under Code Section 409A. 

17

ARTICLE 5.

SOURCE OF PAYMENTS; NATURE OF INTEREST 

	
 

	
 

	
5.1

	
Establishment of Trust. 

          Each
Participating Employer will establish a Trust, or become covered by a Trust
established by another Participating Employer, with an independent corporate
trustee. The Trust must (a) be a grantor trust with respect to which the
Participating Employer is treated as the grantor for purposes of Code section
677, (b) not cause the Plan to be funded for purposes of Title I of ERISA and
(c) provide that the Trust assets will, upon the insolvency of a Participating
Employer, be used to satisfy claims of the Participating Employer’s general
creditors. The Participating Employers may from time to time transfer to the
Trust cash, marketable securities or other property acceptable to the Trustee
in accordance with the terms of the Trust. The Participating Employers will pay
all taxes of any kind whatsoever payable in respect of Trust assets or any
transaction with respect to Trust assets, other than taxes payable by a
Participant or Beneficiary, or any other person claiming by, under or through a
Participant or Beneficiary, in connection with a distribution from the Plan. 

	
 

	
 

	
 

	
5.2

	
Source of Payments. 

	
 

	
 

	
 

	
 

	
(a)

	
Each Participating Employer will pay, from its general assets, the
 portion of any benefit pursuant to Article 4 or Section 6.3 or 6.4
 attributable to a Participant’s Accounts with respect to that Participating
 Employer, and all costs, charges and expenses relating thereto. 

	
 

	
 

	
 

	
 

	
(b)

	
The Trustee will make distributions to Participants and Beneficiaries
 from the Trust in satisfaction of a Participating Employer’s obligations
 under the Plan in accordance with the terms of the Trust. The Participating
 Employer is responsible for paying any benefits attributable to a
 Participant’s Account with respect to that Participating Employer that are
 not paid by the Trust. 

	
 

	
 

	
 

	
5.3

	
Status of Plan. 

	
 

	
 

	
 

	
          Nothing
 contained in the Plan or Trust is to be construed as providing for assets to
 be held for the benefit of any Participant or any other person or persons to
 whom benefits are to be paid pursuant to the terms of this Plan, the
 Participant’s or other person’s only interest under the Plan being the right
 to receive the benefits set forth herein. The Trust is established only for
 the convenience of the Participating Employers and the Participants, and no
 Participant has any interest in the assets of the Trust prior to distribution
 of such assets pursuant to the Plan. To the extent the Participant or any
 other person acquires a right to receive benefits under this Plan or the
 Trust, such right is no greater than the right of any unsecured general
 creditor of the Participating Employer.

	
 

	
 

	
 

	
5.4

	
Non-assignability 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.

18

ARTICLE 6. 

AMENDMENT, TERMINATION

	
 

	
 

	
 

	
6.1

	
Adoption. 

	
 

	
 

	
 

	
          With the
 prior approval of the Administrator, an Affiliate may adopt the Plan and
 become a Participating Employer by furnishing to the Administrator a
 certified copy of a resolution of its Board adopting the Plan. 

	
 

	
 

	
 

	
6.2

	
Amendment. 

	
 

	
 

	
 

	
 

	
(a)

	
Right. The Company reserves the right to
 amend the Plan at any time to any extent that it may deem advisable. 

	
 

	
 

	
 

	
 

	
(b)

	
Method. To be effective, an amendment must
 be stated in a written instrument approved in advance or ratified by the
 Company’s Board and executed in the name of the Company by two of its
 officers. 

	
 

	
 

	
 

	
 

	
(c)

	
Binding Effect. An amendment adopted in
 accordance with Subsection (b) is binding on all interested parties as of the
 effective date stated in the amendment; provided, however, that no amendment
 may retroactively deprive any Participant, or the Beneficiary of a deceased
 Participant, of any benefit to which he or she is entitled under the terms of
 the Plan in effect immediately prior to the effective date of the amendment
 or the date on which the amendment is adopted, whichever is later. 

	
 

	
 

	
 

	
 

	
(d)

	
Certain Amendments to Earnings Credit Method.
 Any amendment that materially changes the method of determining the
 adjustments to Participants’ Accounts pursuant to Section 3.6 is effective
 with respect to the portion of the Accounts attributable to credits made before
 the date on which the amendment is adopted only if the Company’s Board
 determines in good faith that on that date, it is reasonably likely that, in
 the long run, the new method will not result in materially lower credit rate
 than the old method. 

	
 

	
 

	
 

	
 

	
(e)

	
Applicability to Participants Who Have Terminated Employment.
 The provisions of the Plan in effect on a Participant’s Termination Date
 will, except as otherwise expressly provided by a subsequent amendment,
 continue to apply to such Participant. 

	
 

	
 

	
 

	
6.3

	
Termination of Participation.
 

	
 

	
 

	
 

	
          Notwithstanding
 any other provision of the Plan to the contrary, if determined by the
 Administrator to be necessary to ensure that the Plan is exempt from ERISA to
 the extent contemplated by Section 1.3, or upon the Administrator’s
 determination that a Participant’s interest in the Plan has been or is likely
 to be includable in the Participant’s gross income for federal income tax
 purposes prior to the actual payment of benefits pursuant to the Plan, the Administrator
 may take any or all of the following steps: 

19

	
 

	
 

	
 

	
 

	
(a)

	
terminate the Participant’s future participation in the Plan; 

	
 

	
 

	
 

	
 

	
(b)

	
cause the Participant’s entire vested interest in the Plan to be
 distributed to the Participant in the form of an immediate lump sum cash
 payment; and/or 

	
 

	
 

	
 

	
 

	
(c)

	
transfer the benefits that would otherwise be payable pursuant to the
 Plan for all or any of the Participants to a new plan that is similar in all
 material respects (other than those which require the action in question to
 be taken). 

	
 

	
 

	
 

	
6.4

	
Termination. 

	
 

	
 

	
 

	
          The
 Company reserves the right to terminate the Plan in its entirety at any time.
 Each Participating Employer reserves the right to cease its participation in
 the Plan at any time. The Plan will terminate in its entirety or with respect
 to a particular Participating Employer as of the date specified by the
 Company or such Participating Employer in a written instrument adopted in the
 same manner as an amendment. Upon the termination of the Plan in its entirety
 or with respect to any Participating Employer, the Company or Participating
 Employer, as the case may be, will either cause (a) any benefits to which
 Participants have become entitled prior to the effective date of the
 termination to continue to be paid in accordance with the provisions of
 Article 4 or (b) the vested Account balances of any or all Participants, or
 the Beneficiaries of any or all deceased Participants, to be distributed in
 the form of an immediate lump sum payment. In all cases distribution shall be
 made in accordance with and subject to the requirements of Code section 409A.
 

20

ARTICLE 7. 

DEFINITIONS, CONSTRUCTION AND INTERPRETATION

	
 

	
 

	
 

	
7.1

	
Cross Reference. 

	
 

	
 

	
 

	
          References
 within a section of the Plan to a particular subsection refer to that
 subsection within the same section and references within a section or
 subsection to a particular clause refer to that clause within the same
 section or subsection, as the case may be. The definitions and rules of construction
 and interpretation set forth in this article apply in construing the Plan
 unless the context otherwise indicates. 

	
 

	
 

	
 

	
7.2

	
Governing Law. 

	
 

	
 

	
 

	
          To the
 extent that state law is not preempted by the provisions of ERISA, or any
 other laws of the United States, all questions pertaining to the
 construction, validity, effect and enforcement of the Plan will be determined
 in accordance with the internal, substantive laws of the State of Minnesota
 without regard to the conflict of law rules of the State of Minnesota or any
 other jurisdiction. 

	
 

	
 

	
 

	
7.3

	
Headings. 

	
 

	
 

	
 

	
          The
 headings of articles and sections are included solely for convenience of
 reference; if there exists any conflict between such headings and the text of
 the Plan, the text will control. 

	
 

	
 

	
 

	
7.4

	
Number and Gender.
 

	
 

	
 

	
 

	
          Wherever
 appropriate, the singular may be read as the plural, the plural may be read
 as the singular and one gender may be read as the other gender. 

	
 

	
 

	
 

	
7.5

	
Definitions. 

	
 

	
 

	
 

	
          The terms
 in this section when used with initial capitalization have the following
 meanings, unless the context otherwise indicates. 

	
 

	
 

	
 

	
Account. “Account” means the bookkeeping
 account maintained with respect to a Participant pursuant to Section 3.1 and
 may mean the Savings Account, Fixed Period (Strategy 1) Account, Fixed Period
 (Strategy 2) Account, or Retirement Account or all of them, as the context
 requires. 

	
 

	
 

	
 

	
Active Participant. “Active Participant”
 with respect to a Plan Year means a Qualified Employee who is eligible to
 make deferrals pursuant to the Plan for the Plan Year, for the portion of the
 Plan Year during which he or she remains eligible. 

	
 

	
 

	
 

	
Administrator. “Administrator” means the
 Company or the person to whom administrative duties are delegated pursuant to
 the provisions of Section 8.1, as the context requires. 

	
 

	
 

	
 

	
Affiliate. “Affiliate” means the Company and
 any other company or trade or business, whether or not incorporated, that
 together with the Company is treated as a single employer pursuant to Code
 section 414(b) or 414(c). 

21

Base Salary. “Base Salary” for a Plan Year
means the base salary payable in cash to an Active Participant by a
Participating Employer for the Participant’s services during the Plan Year as a
Qualified Employee, net of any contributions or deductions specified in Plan
Rules. 

Beneficiary. “Beneficiary” with respect to a
Participant is the person designated or otherwise determined under the
provisions of Section 4.4(e) as the distributee of benefits payable after the
Participant’s death. A person designated or otherwise determined to be a
Beneficiary under the terms of the Plan has no interest in or right under the
Plan until the Participant in question has died. A Beneficiary will cease to be
such on the day on which all benefits to which he, she or it is entitled under
the Plan have been distributed. 

Board. “Board” means the board of directors of
the Affiliate in question. When the Plan provides for an action to be taken by
the Board, the action may be taken by any committee or individual authorized to
take such action pursuant to a proper delegation by the board of directors in
question. 

Bonus. “Bonus” for a Plan Year means the
annual bonus earned by an Active Participant during the Plan Year for his or
her services during the Plan Year as a Qualified Employee and paid in cash to
the Participant by a Participating Employer during the Plan Year first
following the Plan Year, net of any contributions or deductions specified in
Plan Rules. 

Code. “Code” means the Internal Revenue Code
of 1986, as amended. Any reference to a specific provision of the Code includes
a reference to that provision as it may be amended from time to time and to any
successor provision. 

Company. “Company” means Select Comfort Corporation,
a Minnesota corporation. 

Disabled. A Participant will be considered to
be ‘Disabled’ only if the Participant, by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months (i) is
unable to engage in any substantial gainful activity, (ii) is receiving income
replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company or an Affiliate, or
(iii) is determined to be totally disabled by the Social Security
Administration; provided, however, in all cases the Employee is considered
‘Disabled’ within the meaning of Code Section 409A(a)(2)(C). The Board shall determine
whether the Employee is Disabled on the basis of medical evidence satisfactory
to the Board. 

ERISA. “ERISA” means the Employee Retirement
Income Security Act of 1974, as amended. Any reference to a specific provision
of ERISA includes a reference to that provision as it may be amended from time
to time and to any successor provision. 

Fixed Period (Strategy 1) Account. “Fixed
Period (Strategy 1) Account” with respect to a Participant means the Account
and subaccounts maintained on his or her behalf pursuant to Section 3.1(a)(ii).

Fixed Period (Strategy 2) Account. “Fixed
Period (Strategy 2) Account” with respect to a Participant means the Account
and subaccounts maintained on his or her behalf pursuant to Section
3.1(a)(iii). 

22

Participant. “Participant” means a current or
former Active Participant to whose Account amounts have been credited pursuant
to Article 3 and who has not ceased to be a Participant pursuant to Section
2.6. 

Participating Employer. “Participating
Employer” means the Company and any other Affiliate that has adopted the Plan,
or all of them collectively, as the context requires. An Affiliate will cease
to be a Participating Employer upon a termination of the Plan as to its
employees and the satisfaction in full of all of its obligations under the Plan
or upon its ceasing to be an Affiliate. 

Plan. “Plan” means the Select Comfort
Executive Investment Plan, as from time to time amended or restated. 

Plan Rules. “Plan Rules” are rules, policies,
practices or procedures adopted by the Administrator pursuant to Section 8.2. 

Plan Year. ‘Plan Year’ means the calendar
year; provided that the first Plan Year is the period beginning on December 20,
2002 and ending on December 31, 2002. 

Qualified Employee. “Qualified Employee” means
an individual who performs services for a Participating Employer as an employee
of the Participating Employer (as classified by the Participating Employer at
the time the services are performed without regard to any subsequent
reclassification) and who is determined by the Administrator to be a management
or highly compensated employee of the Participating Employer. 

Retirement Account. “Retirement Account” with
respect to a Participant means the Account maintained on his or her behalf
pursuant to Section 3.1(a)(iv). 

Savings Account. “Savings Account” with
respect to a Participant means the Account maintained on his or her behalf
pursuant to Section 3.1(a)(i). 

Termination Date. “Termination Date” means the
date on which a Participant has completely severed his or her employment
relationship with the Participating Employer and all other Affiliates provided
such termination constitutes a separation from service under Code Section 409A,
or the Participant has experienced a change in his or her employment relationship
that constitutes a ‘separation from service’ under Code Section 409A. A
Participant’s employment will be treated as remaining intact while the
Participant is on a military leave, a sick leave or other bona fide leave of
absence (pursuant to which there is a reasonable expectation that the
Participant will return to perform services for a Participating Employer or
other Affiliate) but only if the period of such leave does not exceed six (6)
months, or if longer, so long as the Participant retains a right to
reemployment with a Participating Employer or other Affiliate under applicable
statute or by contract. 

Trust. “Trust” means any trust or trusts
established by a Participating Employer pursuant to Section 5.1. 

Trustee. “Trustee” means the independent corporate
trustee or trustees that at the relevant time has or have been appointed to act
as Trustee of the Trust. 

23

Unforeseeable Emergency. “Unforeseeable
Emergency” means an unanticipated emergency that is caused by an event beyond
the Participant’s control resulting in a severe financial hardship that cannot
be satisfied through other means. The existence of an unforeseeable emergency
will be determined by the Administrator in its sole discretion. An
Unforeseeable Emergency will exist only if and to the extent the Administrator
determines that it constitutes an ‘unforeseeable emergency’ under Code Section
409A. 

Years of Service. “Years of Service” for
purposes of determining a Participant’s vested interest in his or her
Retirement Account pursuant to Section 3.7, means the sum of a Qualified
Employee’s periods of service as an employee with the Affiliates (measured in
the case of any Affiliate from not earlier than the date on which it became an
Affiliate), commencing as of the Qualified Employee’s employment commencement
date and ending with the Qualified Employee’s Termination Date. 

24

ARTICLE 8.

ADMINISTRATION

	
 

	
 

	
8.1

	
Administrator. 

	
 

	
 

	
          The
 general administration of the Plan and the duty to carry out its provisions
 is vested in the Company. The Company may delegate such duty or any portion
 thereof to a named person or persons and may from time to time revoke such
 authority and delegate it to another person or persons. 

	
 

	
 

	
8.2

	
Plan Rules and Regulations.
 

	
 

	
 

	
          The
 Administrator has the discretionary power and authority to make such Plan
 Rules as the Administrator determines to be consistent with the terms, and
 necessary or advisable in connection with the administration, of the Plan and
 to modify or rescind any such Plan Rules. 

	
 

	
 

	
8.3

	
Administrator’s Discretion.
 

	
 

	
 

	
          The
 Administrator has the discretionary power and authority to make all
 determinations necessary for administration of the Plan, except those
 determinations that the Plan requires others to make, and to construe,
 interpret, apply and enforce the provisions of the Plan and Plan Rules
 whenever necessary to carry out its intent and purpose and to facilitate its
 administration, including, without limitation, the discretionary power and
 authority to remedy ambiguities, inconsistencies, omissions and erroneous
 benefit calculations. In the exercise of its discretionary power and
 authority, the Administrator will treat all similarly situated persons
 uniformly. 

	
 

	
 

	
8.4

	
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 Participating Employers. 

	
 

	
 

	
8.5

	
Indemnification. 

	
 

	
 

	
          The
 Participating Employers jointly and severally agree to indemnify and hold
 harmless, to the extent permitted by law, each director, officer, and
 employee of any Affiliates 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 person’s services in connection with the Plan, but only if such person
 did not act dishonestly or in bad faith or in willful violation of the law or
 regulations under which such liability, loss, cost or expense arises. The
 Participating Employers have the right, but not the obligation, to select
 counsel and control the defense and settlement of any action for which a
 person may be entitled to indemnification under this provision. 

25

	
 

	
 

	
 

	
 

	
 

	
8.6

	
Benefit Claim Procedure.
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(a)

	
The Administrator will notify a Participant in writing, within 90
 days of the Participant’s written application for benefits, of the
 Participant’s eligibility or noneligibility for benefits under the Plan. If
 the Administrator determines that a Participant is not eligible for benefits
 or full benefits, the notice will: 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(1)

	
state the specific reasons for the denial of any benefits; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(2)

	
provide a specific reference to the provision of the Plan on which
 the denial is based; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(3)

	
provide a description of any additional information or material
 necessary for the claimant to perfect the claim, and a description of why it
 is needed; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(4)

	
state that the claimant will be provided, on request and free of
 charge, reasonable access to, and copies of, all documents, records, and
 other information relevant to the claim; 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(5)

	
state the claimant’s right to bring a civil action under ERISA
 Section 502(a) following a continued denial of a claim after appeal review;
 and 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
(6)

	
provide an explanation of the Plan’s claims review procedure and
 other appropriate information as to the steps to be taken if the Participant
 wishes to have the claim reviewed. If the Administrator determines that there
 are special circumstances requiring additional time to make a decision, the
 Administrator will notify the Participant of the special circumstances and
 the date by which a decision is expected to be made, and may extend the time
 for up to an additional 90-day period. 

	
 

	
 

	
 

	
 

	
 

	
 

	
(b)

	
If a Participant is determined by the Administrator not to be
 eligible for benefits or if the Participant believes that he or she or she is
 entitled to greater or different benefits, the Participant will be provided
 the opportunity to have his or her claim reviewed by the Administrator by
 filing a petition for review with the Administrator within 60 days after the
 Participant receives the notice issued by the Administrator. The petition
 must state the specific reasons the Participant believes he or she or she is
 entitled to benefits or greater or different benefits. Within 60 days after the
 Administrator receives the petition, the Administrator will give the
 Participant (and his or her counsel, if any) an opportunity to present his or
 her position to the Administrator in writing, and the Participant (or his or
 her counsel) may review the pertinent documents, and the Administrator will
 notify the Participant of its decision in writing within such 60-day period,
 stating specifically the basis of the decision written in a manner calculated
 to be understood by the Participant and the specific provisions of the Plan
 on which the decision is based. If because of special circumstances requiring
 additional time to 

26

	
 

	
 

	
 

	
 

	
 

	
make a decision, the 60-day period is not sufficient, the decision
 may be deferred for up to another 60-day period at the election of the
 Administrator, but notice of this deferral must be given to the Participant.

	
 

	
 

	
 

	
 

	
(c)

	
The same procedure applies to the Beneficiary of a deceased
 Participant. 

	
 

	
 

	
 

	
 

	
(d)

	
A claimant must exhaust the procedure described in this section
 before pursuing the claim in any other proceeding. 

	
 

	
 

	
 

	
8.7

	
Disputes. 

	
 

	
 

	
 

	
 

	
(a)

	
In the case of a dispute between a Participant or his or her
 Beneficiary and a Participating Employer, the Administrator or other person
 relating to or arising from the Plan, the United States District Court for
 the District of Minnesota is a proper venue for any action initiated by or
 against the Participating Employer, Administrator or other person and such
 court will have personal jurisdiction over any Participant or Beneficiary named
 in the action. 

	
 

	
 

	
 

	
 

	
(b)

	
Regardless of where an action relating to or arising from the
 participation in the Plan by any Participant is pending, 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, a
 Participating Employer, the Administrator or any other person or against any
 such Participant or his or her Beneficiary. 

27

ARTICLE 9.

MISCELLANEOUS

	
 

	
 

	
9.1

	
Withholding and Offsets.
 

	
 

	
 

	
          The
 Participating Employers and the Trustee retain the right to withhold from any
 compensation, deferral and/or benefit payment pursuant to the Plan, any and
 all income, employment, excise and other tax as the Participating Employers
 or Trustee deems necessary and the Participating Employers may offset against
 amounts then payable to a Participant or Beneficiary under the Plan any
 amounts then owing to the Participating Employers by such Participant or
 Beneficiary. 

	
 

	
 

	
9.2

	
Other Benefits. 

	
 

	
 

	
          Neither
 amounts deferred nor 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 a Participating Employer unless
 otherwise expressly provided thereunder. 

	
 

	
 

	
9.3

	
No Warranties Regarding Tax Treatment.
 

	
 

	
 

	
          The
 Participating Employers make no warranties regarding the tax treatment to any
 person of any deferrals or payments made pursuant to the Plan and each
 Participant will hold the Administrator and the Participating Employers and
 their officers, directors, employees, agents and advisors harmless from any
 liability resulting from any tax position taken in good faith in connection
 with the Plan. 

	
 

	
 

	
9.4

	
No Rights to Continued Employment or
 Service Created. 

	
 

	
 

	
          Neither
 the establishment of nor participation in the Plan gives any individual the
 right to continued employment or service on the Company’s board of directors
 or limits the right of the Participating Employer to discharge, transfer,
 demote, modify terms and conditions of employment or service on the Company’s
 board of directors or otherwise deal with any individual without regard to
 the effect which such action might have on him or her with respect to the
 Plan. 

	
 

	
 

	
9.5

	
Special Provisions.
 

	
 

	
 

	
          Special
 provisions of the Plan applicable only to certain Participants may be set
 forth on an exhibit to the Plan adopted in the same manner as an amendment to
 the Plan. In the event of a conflict between the terms of the exhibit and the
 terms of the Plan, the exhibit controls. Except as otherwise expressly
 provided in the exhibit, the generally applicable terms of the Plan control
 all matters not covered by the exhibit. 

	
 

	
 

	
9.6

	
Successors. 

	
 

	
 

	
          Except as
 otherwise expressly provided in the Plan, all obligations of the
 Participating Employers under the Plan are binding on any successor to the
 Participating Employer whether the existence of such successor is the result
 of a direct or indirect purchase, merger, consolidation or otherwise of all
 or substantially all of the business and/or assets of the Participating
 Employer. 

28

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