UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 19, 2014


SELECT COMFORT CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation or organization)

0-25121
41-1597886
(Commission File No.)
(IRS Employer Identification No.)

9800 59th Avenue North, Minneapolis, Minnesota 55442
(Address of principal executive offices)      (Zip Code)

(763) 551-7000
(Registrant’s telephone number, including area code)

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On March 19, 2014, Select Comfort Corporation (the “Company”) announced that David R. Callen has been appointed to the position of Senior Vice President and Chief Financial Officer, effective as of April 7, 2014, and Patricia (Tricia) Dirks has been appointed to the position of Senior Vice President and Chief Human Capital Officer, also effective as of April 7, 2014.
Since 2007, Mr. Callen, age 47, has served as Vice President, Finance & Treasurer (and the Principal Financial Officer) of Ethan Allen Interiors Inc., a vertically integrated designer, manufacturer and distributor of high quality home furnishings globally.
Pursuant to the terms of the Company’s offer letter dated March 14, 2014, Mr. Callen will be entitled to:
•
An annual base salary of $375,000;

•
Participate in the Company’s annual cash incentive compensation program with a target bonus level of 55% of base salary; the bonus for fiscal 2014 will be guaranteed at the target level (with an opportunity to earn more than target level for Company performance that exceeds the performance target);

•
A sign-on bonus of $75,000, which must be repaid to the Company if Mr. Callen voluntarily terminates his employment during the first year of employment;

•
Participate in the Company’s annual long-term incentive program, and for 2014 will receive:

◦
a special, one-time, new hire award of 14,055 shares of time-vested restricted stock, with shares vesting 33% per year on each of the first three anniversaries of the date of grant, subject to continued employment;

◦
a grant of 7,395 stock options, vesting 33% per year on each of the first three anniversaries of the date of grant, subject to continued employment; and

◦
a grant of 12,650 target shares of performance-vested restricted stock, vesting at the end of three years, subject to continuing employment, with the actual number of shares to be earned based on actual Company performance through fiscal 2016 vs. revenue and net operating profit growth goals;

•
Substantially the same relocation benefits provided to other employees of the Company, and an additional discretionary relocation allowance to be paid upon permanent relocation;





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•
Participate in the Company’s Executive Severance Pay Plan (under which, upon termination of employment without cause, Mr. Callen would be entitled to severance pay equal to (a) one times the sum of (i) annual base salary and (ii) annual target bonus, plus (b) a pro rata target bonus for the year of termination); and

•
Receive the same perquisites provided to other senior executives of the Company, including reimbursement for tax and financial planning services and the ability to participate in an annual physical program through Mayo Clinic’s Executive Health Program; and

•
Participate in the same health and welfare benefits plans as the Company makes available to director-level and above employees.

Mr. Callen will also be eligible to participate in the Select Comfort Profit Sharing and 401(k) Plan and the Select Comfort Executive Investment Plan in accordance with the respective terms of such plans.
The foregoing description of Mr. Callen’s offer letter is a summary of the material terms of the offer letter, and is qualified in its entirety by reference to the complete text of the offer letter, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
Attached to this Current Report on Form 8-K as Exhibit 99.1 is a copy of the press release issued by the Company on March 19, 2014 announcing the appointments of Mr. Callen and Ms. Dirks to their respective executive roles.










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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
10.1
Offer Letter dated March 14, 2014 from Select Comfort Corporation to
David R. Callen (filed herewith)
99.1
Press release dated March 19, 2014 (furnished herewith)




















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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
SELECT COMFORT CORPORATION
 
(Registrant)
 
 
Dated: March 20, 2014
By: /s/ Mark A. Kimball
 
Title: Senior Vice President



































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EXHIBIT INDEX

Exhibit No.
Description
Method of Filing
 
 
 
10.1
Offer Letter dated March 14, 2014 from Select Comfort Corporation to David R. Callen
Filed herewith
 
 
 
99.1
Press Release dated March 19, 2014
Furnished herewith














































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Friday, March 14 th , 2014                             EXHIBIT 10.1



David Callen
12 Bridle Path Trail
Newton, CT 06470

Dear David,

On behalf of Select Comfort Corporation, I am extremely pleased to extend the offer of employment as our Senior Vice President & Chief Financial Officer reporting to me.

Your offer is for an exempt position, which includes:

▪
Starting bi-weekly salary of $14,423.08 ($375,000.00 annualized).

▪
Eligibility to participate in the Select Comfort annual bonus plan. You will be eligible for a target bonus of 55% of base salary as defined each year in the annual bonus plan document. For 2014, you are guaranteed a bonus payout of at least 100% of target (with opportunity to earn more than 100% of target for Company performance above plan).

▪
A sign-on bonus of $75,000 (less applicable withholdings) within your first 30 days of employment. In the event that you voluntarily leave the company during the first twelve months of employment, you agree to re-pay Select Comfort the full amount of the sign-on bonus.

▪
Eligibility to participate in our annual long-term incentive program. For 2014 you will receive the following: a) a special one-time, new hire award of ~$250,000, and b) an annual award of ~$300,000 (the Compensation Committee approves annual award levels each year, and grants can increase or decrease in value in any given year). Your specific grant will be comprised of time-vested restricted stock, stock options, and performance-vested restricted stock as follows:

a)
A special one-time, new hire award on your start date of 14,055 shares of time-vested restricted stock in the Company, with shares vesting 33% per year on each of your first 3 anniversaries from the date of grant, subject to continued employment. This number of shares has been determined using the average stock price close for the previous 20 trading days leading up to the date of this offer (i.e., 14,055 shares x $17.79 = ~$250,000). These shares will be subject to restrictions on transfer and also subject to forfeiture to the Company in the event of termination of your employment prior to the shares becoming fully vested.





b)
An annual grant of $300,000, with the grant value delivered in a mix of 25% stock options and 75% performance-vested shares.

•
7,395 stock options to purchase shares of the Company’s common stock at a fixed exercise price. The exercise price of these options will be the closing sale price of the Company’s common stock on the date of grant. These options will vest 33% per year on each of your first 3 anniversaries from the date of grant, subject to continued employment. This number of options has been determined using the average stock price close for the previous 20 trading days leading up to the date of this offer, and a black-scholes value of 57% (i.e., 7,395 options x $17.79 x 57% = ~$75,000).

•
12,650 target shares of performance-vested restricted stock in the Company. These shares will be subject to restrictions on transfer and also subject to forfeiture to the Company in the event of termination of your employment. These restrictions on transfer and forfeiture provisions will terminate when the shares become fully vested at the end of three years from your grant date. The actual number of shares earned will be determined based on actual performance through 2016 vs. goals for revenue and NOP growth. This number of target performance shares has been determined using the average stock price close for the previous 20 trading days leading up to the date of this offer (i.e., 12,650 target shares x $17.79 = ~$225,000).

▪
Comprehensive and competitive benefits package. Actual benefit offerings are defined in the individual plan documents and include the following (See attached benefits summary for specific details) :

▪
Health, dental, vision, life and disability insurance
▪
Reimbursement for tax and financial planning services up to $4,000 annually
▪
Ability to participate in an annual physical program through Mayo Clinic’s Executive Health Program
▪
401(k) plan which provides a quarterly matching contribution of 75% of the first 2% contributed by an employee and 50% of the next 2% contributed (note that this matching contribution is at the discretion of the Compensation Committee of the Board, and may be changed at any time without notice)
▪
Paid-time off equivalent to 24 days per year and accrued at a rate of 3.75 hours per week with your accrual beginning as stated in the attached benefits summary
▪
Participation in our Corporate Holiday program (includes 8 days of paid-time off)
▪
Participation in summer hours (1/2 day Fridays Memorial Day through Labor Day)
▪
Flexible Spending and Health Savings accounts
▪
Significant discount on our products






▪
Effective immediately, you will be issued relocation benefits as part of your compensation package to be utilized within the next 12 months. The allowance for your relocation expenses is up to $150,000, and you will receive taxable cash payment for any dollars that remain in your budget upon completion of your move within one year of your start date (as detailed in your relocation document). Attached is additional information regarding these services that we provide in partnership with our relocation partner, Relocation Today. In addition, we will provide a $75,000 (less applicable withholdings) discretionary relocation budget to be paid upon your permanent relocation.

▪
This position qualifies for participation in our Executive Severance Pay Plan, the purpose of which is to provide severance benefits to Qualified Employees whose employment is involuntarily terminated without cause. Please see the enclosed Plan Documents for specifics.


David, we are so excited to have you join our Sleep Number family and our quest to become one of the world’s most beloved brands. Your anticipated start date will be Monday April 7 th , 2014. Should you have any questions, please contact me.

Sleep well and dream big,


/s/ Shelly Ibach


Shelly Ibach
President and CEO
Sleep Number setting 35



This offer is contingent on your successful completion of a background investigation and compliance with the Immigration Reform Control Act of 1986 (IRCA). Furthermore, this offer is conditional upon your signing our Employee Inventions, Confidentiality and Non-Compete Agreement and Code of Business Conduct. A copy of each is enclosed.

This offer will remain valid until Monday, March 17 th , 2014, unless we notify you otherwise. You should understand that this offer of employment does not constitute a contract of employment, nor is it to be construed as a guarantee of continuing employment for any period of time. Employment with Select Comfort is “at will.” We recognize your right to terminate the employment relationship at any time, and for any reason, and similarly, we reserve the right to alter, modify or terminate the relationship at any time and for any reason.

The purpose of this letter is solely to notify you of the proposed salary and grants described above. The definitive terms of the grant will be set forth in definitive agreements that will be provided to you through the Charles Schwab website. The terms set forth in such definitive agreements will supersede the terms set forth in this letter in all respects and such definitive agreements will be the final and conclusive terms of your grant. As with other forms of compensation, individual incentive awards should be kept confidential.






Exhibit 99.1

Select Comfort Appoints New Chief Financial Officer and
New Chief Human Capital Officer
Former Ethan Allen Interiors, Inc. and Target Corporation Executives Join the Company

MINNEAPOLIS - (March 19, 2014) - Select Comfort Corporation, (NASDAQ: SCSS), the leader in individualized comfort and sleep technology in the mattress industry, today announced that David Callen, Sleep Number® setting 40, has been appointed the company’s senior vice president and chief financial officer, and Patricia (Tricia) Dirks, Sleep Number® setting 35, has been named the company’s senior vice president and chief human capital officer. Each of these appointments will be effective as of April 7, 2014.

As chief financial officer, Callen will advance the company’s financial growth plan and lead the finance team. Dirks will continue to evolve the company’s culture of innovation and individualization and be responsible for all human capital functions. Both senior leaders will progress the company’s vision to become one of the world’s most beloved brands by delivering an unparalleled sleep experience.

“David, an experienced finance leader in a vertically integrated branded consumer product company, Ethan Allen Interiors, Inc., and Tricia, an accomplished retail and human resources leader from Target Corporation, will advance our strategic direction,” said Shelly Ibach, president and CEO, Select Comfort. “They are strong business partners whose expertise complements our customer-focused culture and strategy.”

Callen was previously Ethan Allen Interiors, Inc.’s principal financial officer, serving as vice president, finance and treasurer. Prior to that, he served as vice president of global finance of Phototronics, Inc., and worked as corporate controller of Johnson Outdoors, Inc. He earned his CPA while working at BDO Seidman, a public accounting firm.
Dirks joins the company from Target Corporation where she has been senior vice president of organizational effectiveness. Previously, she was senior vice president of human resources at Marshall Field’s Department Store. She currently serves on the Minnesota Zoo Foundation Board.
About Select Comfort Corporation
Select Comfort Corporation is leading the industry in delivering an unparalleled sleep experience by offering consumers high-quality, innovative and individualized sleep solutions and services, which include a complete line of SLEEP NUMBER ® beds and bedding. The company is the exclusive manufacturer, marketer, retailer and servicer of the revolutionary Sleep Number bed, which allows individuals to adjust the firmness and support of each side at the touch of a button. The company offers further individualization through its solutions-focused line of Sleep Number pillows, sheets and other bedding products. And as the only national specialty-mattress retailer, consumers can take advantage of an empowering mattress-buying experience at one of the 440 Sleep Number stores across the country, online at SleepNumber.com , or via phone at (800) Sleep Number or (800) 753-3768.

Media Contact: Becky Dvorak, (763) 551-6862; becky.dvorak@selectcomfort.com
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