Sample Business Contracts


Employment Agreement - Select Comfort Corp. and Daniel J. McAthie

Employment Forms

  • Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements 

October 20, 1995

Mr. Daniel J. McAthie
5408 Vining Point Road
Minnetonka, MN 55345

Dear Dan,

It is with great pleasure that I extend a modified offer for you to join our
team!  I believe that you can have a significant and immediate impact on our
business, and I look forward to working with you.

The specifics of the terms of employment are:

-   The position is Executive Vice President - CFO and CAO reporting directly
    to me. You will also be a member of our Senior Management Team and
    participate on our various senior operating committees. Your ability and
    opportunity to influence the strategic direction and success of Select
    Comfort will be maximized in this way.

-   The compensation is as follows:

    -   Base salary of $175,000 per year subject to performance based adjustment
        at least once per year;

    -    Participation in the Senior Management Incentive Plan which in 1995
         provides a payout of up to 80% of base salary if certain performance
         criteria is met. The primary performance criteria is business
         profitability with a Plan performance earning a 50% payout level; of
         course, if a minimum profitability level is not reached, no incentive
         would be earned;

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    -    Incentive Stock Options in the amount of 85,000 common shares priced
         at an exercise price of $4.80 per share. The options will vest monthly
         over a 36-month period of employment and have a 10-year exercise term
         (the stock has a potential of being valued at $1.5 - $2.0 million
         within twenty-four months, see attached Montgomery assessment);
         additional options could be granted on the basis of performance.

    -    Four weeks paid vacation plus medical, dental, short-term and
         long-term disability insurance options;

    -    Participation in Select Comfort's 401(k) Plan which in 1995 provides
         for Company matching of up to $.50 on every dollar you contribute up
         to 6% of your base salary. The amount of matching is based upon
         Company profitability relative to fiscal plan;

<PAGE>




    -    You will be entitled to a minimum severence payment equal to nine
         month's base salary should your employment be involuntarily terminated
         without cause.

I believe the above covers all essential points of the terms of employment.

I am very excited about the possibility of you joining our Management Team and
the people who have met you look forward to your contributions. I believe your
vision, technical skills and leadership abilities are the right combination to
help Select Comfort become a world-wide innovative leader. I also look forward
to you and I forming an effective team that will take the investment community
by storm!

Per our conversation, I am looking forward to a response from you on Monday,
October 23rd.

Sincerely,

/s/

Mark de Naray
President and CEO

MdeN/bms

c:        Ms. Karen Jones - Vice President, Human Resources
          Mr. David Nosal - Heidrick & Struggles

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