EN Cn
`PARTIES:
`
`;
`.
`Select Comfort Corporation
`6105 Trenton Lane North
`Plymouth, MN 55442
`I
`ing.
`;
`i
`American National Manufacturing, Inc.
`252 Mariah Circle
`Corona, CA 92879-1751
`
`CSscCc")
`
`(“ANM”)
`
`.
`a:
`Craig Miller
`Vice President - American National Manufacturing, Inc.
`ay
`a "1
`252 Mariah Circle
`;
`Corona, CA 92879-1751
`(“Consultant”)
`
`DATE: August 11, 2006
`
`AGREEMENT:
`
`S2R2RE FRSGE
`Pos Ha P Ble g nS
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`
`The parties hereto, each intending to be legally bound, agree as follows:
`
`Engagement. Subject to all of the terms and conditions of this Agreement, SCC
`1.
`hereby engages ANM and Consultant to perform consulting services as provided herein and each
`of ANM and Consultant accepts such engagement. ANM and Consultant shall serve SCC as
`independent contractors and neither Consultant nor any other employee of ANM shall be an
`employee of SCC,
`
`Duties. Consultant agrees to devote up to 20 hours per monthto the provision of
`2.
`consulting services hereunder on matters related to Consultant’s professional qualifications and
`industry experience as requested by SCC's management. Specific expertise is anticipated in the
`areas of product research and development and low-cost country sourcing. Consultant shall be
`accountable to the President and CEO of SCC, and will work closely with members of the
`management team in Research and Development and Global Supply Chain. ANM consents to
`the engagement of Consultant under the terms of this Agreement and agrees to make both
`Consultant and the related resources of ANM available to provide the consulting services
`contemplated by this Agreement.
`
`3.
`
`Initial Term,Renewal Periods, Termination and Effect of Termination.
`
`Initial Term. Subject to earlier termination in accordance with paragraph
`(a)
`(c) below, the term of ANM’s and Consuitant’s services under this Agreement shall
`commence on approximately August 1, 2006 and will continue foran initial term of three
`(3) years expiring August 1, 2009 (the “Initial Term”).
`
`Automatic Renewal Periods. After the Initial Term, this Agreement shall
`(b)
`be automatically renewed for successive, separate renewal periods of one (1) year each
`(each of which is referred to herein as a “Renewal Period”) unless either party provides
`notice of its intention not to renew this Agreement at least ninety (90) days in advance of
`the expiration of the Initial Termor any Renewal Term.
`
`Confidential
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` (c) Termination. Notwithstanding the foregoing,
`
`this Agreement will be
`subject to termination in the sole discretion of SCC for any reason or for no reason,
`effective upon natless than ninety (90) days prior written notice of termination from SCC
`to ANM and Consultant.
`
`hasenateseeyetieatc
`(d}
`Effect of Termination.
`The termination of this Agreement, whether
`pursuant to the expiration of the Initial Term or any Renewal Period, or pursuant to
`termination in accordance with paragraph 3(c) above, shall not affect or impair any
`remaining obligations of the parties under this Agreement,
`including any remaining
`payment obligations arising with respect to performance under this Agreement prior to
`the termination of this Agreement and the continuing obligations of SCC, ANM or
`Consultant under Sections 5, 6 and 7 hereof.
`
`4,
`Apreement:
`
`Compensation.
`
`In consideration of ANM’s and Consultant’s services under this
`
`Cash Compensation. SCC shall pay Consultant annual cash compensation
`(a)
`of Three Hundred Fifty Thousand Dollars ($350,000) during the first year of the Initial
`Term, Four Hundred Thousand Dollars ($400,000) during the second year of the Initial
`Term, and Five Hundred Thousand Dollars ($500,000) during the third year of the Initial
`Term and during any applicable annual Renewal Period. Such compensation shail be
`payable in quarterly installments on the first day of August, November, February and
`May of eachyear,
`
`Expenses. SCC agrees to pay directly or reimburse ANM or Consultant
`{b)
`for all usual, reasonable and necessary travel expenses paid or incurred by ANM or
`Consultant in performing services hereunder, provided that such travel expenses shall be
`incurred and documented in accordance with all applicable SCC policies and ANM or
`Consultant shall have submitted all receipts and other documentation required by such
`policies. ANM will provide prototypes and samples to SCC whenrequired and approved
`by SCC at a $35.00 per hour shop rate plus materials. All materials will be billed at
`ANM’s actual material cost plus a mark-up on material cost of 10%.
`
`Post-fermination Cash Compensation, Following the termination ofthis
`(c)
`Agreement, whetherafter the Initial Term or any applicable Renewal Term or pursuant to
`Section 3{c} above,
`in consideration of ANM’s and Consultant’s obligations under
`Sections 5, 6 and 7 hereof and so long as ANM and Consultant continue to comply with
`Sections 5, 6 and 7 hereof, and in lieu of any further compensation under Section 4(a)
`above, SCC shall pay ANM total cash compensation of One Hundred Fifty Thousand
`Dollars ($150,000) payable in equal quarterly installments consistent with the schedule
`specified in Section 4(a} above over the period contemplated by the first paragraph of
`Section 7 below.
`
`Taxes. ANM and Consultant will be responsible for all taxes payable by
`(d)
`ANM or Consultant in connection with any compensation or other payments received by
`ANM or Consultant under this Agreement.
`
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`5.
`
`Inventions.eee
`
`Definition. The term “Inventions,” as used in this Section 5, means any
`(a)
`inventions, discoveries, improvements and ideas (whether or not they are in writing or
`reduced to practice) or works of authorship (whether or not they can be patented or
`copyrighted) that ANM or Consultant makes, authors, or conceives (cither alone or with
`others) and that:
`
`Concern directly SCC’s consumer adjustable firmness mattress
`Gi}
`business or SCC’s present or demonstrably anticipated future research or
`developmentrelated to the consumeradjustable firmness mattress business; or
`
`(ii) Result from any work ANM or Consultant performs for SCC; or
`
`Gii) Use SCC’s equipment, supplies, facilities, or trade secret information.
`
`The term “Invention,” for purposes of this Section 5, shall not include any
`inventions, discoveries, improvements or ideas (whether or not they are in writing or
`reduced to practice} or works of authorship Gwhether or not they can be patented or
`copyrighted) if and to the extent that any such item is embodied in any work, drawings,
`notes, files or other documentary evidence within SCC or developed independently by
`any of the SCC’s personnel or resources, and no royalties of any kind shall be payable
`with respect to any of the items described in this sentence.
`
`Ownership of Inventions. ANM and Consultant agree that all Inventions
`(b)
`made by Consultant during the termofthis Agreement (including any applicable Renewal
`Period) related to the consumer adjustable firmness mattress business will be SCC’s sole
`and exclusive property. ANM and Consultant will with respect to any Invention:
`
`G) Keep current, accurate, and complete records, which will belong to
`SCC and, upon SCC’s request, such records will be kept and stored on SCC’s
`premises;
`
`Gi) Promptly and fully disclose the existence and describe the nature of
`the Invention to SCC in writing (and without request); and
`
`Gii} Assign (and ANM and Consultant hereby assigns) to SCC all of
`Consultant’s rights to the Invention, any applications Consultant makes for
`patents or copyrights im any country, and any patents or copyrights granted to
`Consultant in any country.
`
`ANM’s Rights to Use Inventions. Notwithstanding the foregoing, ANM
`{c)
`shall have a perpetual,
`royalty-free, non-transferable license to commercialize any
`Invention created for SCC in connection with its medical mattress business.
`
`
`Further Compensation to Consultant for Commercialization of Inventions.
`(d)
`In the event that SCC desires to commercialize any patented or other technology owned
`by ANM(that does not constitute an Invention as defined under this Agreement), SCC
`and ANM apree to negotiate in goodfaith to agree on a case-by-case basis on royalties to
`be paid by SCC. With respect to any new Invention (or other technology) to be
`3
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`commercialized by SCC, SCC and ANM agree to negotiate in good faith to agree on a
`case-by-case basis on royalties to be paid by SCC, provided that the parties agree that (i)
`if the Invention (or other technology) consists of a new product concept, such royalties
`shall be between and shall not exceed 3% to 6% of the lesser of (1) the incremental profit
`margin generated by the Invention (or other technology); or (2) the cost of goods sald
`represented by the Invention (or other technology), and Gi) if the Invention (or other
`technology) consists of a cost savings idea, such royalties shall be on a sliding scale of
`25%, 20%, 15%, 10%, and 5% ofthe cost savings generated by the Invention (or other
`technology) for years one throughfive, respectively. Any such royalties shall be payable
`for a period not te exceedthe shorterof five (5) years orthe life of the Invention (orother
`technology). Neither of the parties shall be permitted to commercialize any Invention for
`any market until-the parties have agreed upon a royalty rate within the range provided
`above.
`
`(e} RightofFirst Refusal for Existing Technology. In addition to the
`
`foregoing, SCC shall have a right of first refusal to commercialize any existing patented
`or other technologies owned by ANM
`
`Indemnification by ANMforClaims of Infringement. ANM agrees to
`(f)
`indemnify, defend and hold harmless SCC from and against any claims of any third party
`alleging that any existing technology, information or intellectual property provided by
`ANM or Consultant to SCC in connection with the performance of this Agreement
`infringes any intellectual property rights of any suchthird party.
`
`6,
`
`ConfidentialInformation.
`
`Information,” as used in this Agreement, means any
`“Confidential
`(a)
`information within the possession of a party that is not generally known and that
`is
`proprietary to such party (as evidenced by documentary evidence in the possession of
`such party) or that such party is obligated to treat as proprietary. Any informationthat a
`reasonable person would presume to be Confidential Information, or that the ownertreats
`as Confidential Information, will be presumed to be Confidential Information (regardless
`of how such information was originated or obtained).
`
`The parties acknowledge and agree that each of the parties hereto may
`(b)
`disclose to the other party certain Confidential Informationin the course of the business
`relationship contemplated by this Agreement.
`The party disclosing Confidential
`Information is referred to herein as the “Disclosing Party” and the party receiving
`Confidential Information is referred to herein as the “Receiving Party.” The term
`“Confidential Information” ag used in this Agreement shall not include any information
`that the Receiving Party can show (i) to have been in the Receiving Party's possession
`prior to the Receiving Party's receipt of such information from the Disclosing Party, (11)
`to be now or to later become generally available to the public through no fault of the
`Receiving Party, (iii) to have been received separately by the Receiving Party in an
`unrestricted manner from a person entitied to disclose such information, or (iv) to have
`been developed independently by the Receiving Party without regard to any information
`received from the Disclosing Party.
`
`(c)
`
`Except as specifically authorized by the Disclosing Party, or as necessary
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`to perform the services contemplated by this Agreement, or as necessary to exercise
`rights or fulfill obligations under this Agreement, the Receiving Party will not, either
`during orafter the term of this Agreement, use or disclose to any person any Confidential
`Information of the Disclosing Party. Upontermination of this Agreement, or at any other
`time at the Disclosing Party’s request, the Receiving Party will promptly deliver to the
`Disclosing Party all records and any compositions, articles, devices, apparatus and other
`items that disclose, describe or embody Confidential Information, including all copies,
`reproductions and specimens of the Confidential Information of the Disclosing Party in
`the Receiving Party’s possession, regardless of who prepared them, and will promptly
`deliver any other property of the Disclosing Party in the Receiving Party’s possession,
`whether or not Confidential Information.
`
`CompetitiveActivities. ANM and Consultant agree that during the term of ANM’s
`7.
`and Consultant's engagement with SCC under this Agreement and for a period after ANM’s and
`Consultant’s engagement with SCC ends that is equal to (i) twelve (12) months following the
`termination in the event that the termination occurs within two (2) years of the date of this
`Agreement; (ii) eighteen (18) months following the termination in the event that the termination
`occurs more than two (2) years after but within five (5) years of the date ofthis Agreement; and (in)
`twenty-four (24) months following the termination in the event that the termination occurs more
`than five (5) years after the date of this Agreement, Consultant will not alone, or in any capacity
`with anotherfirm, directly or indirectly:
`
`Engage in any commercial activity or services related to adjustable firmness
`(a)
`sleep surfaces for mattresses or sofa sleepers for the general consumer market within any
`state in the United States or within any international market; or
`
`Interfere or atternpt to interfere with SCC's relationships with any of its
`{b)
`current or potential suppliers or customers; or
`
`Employ orattempt to employ any of SCC’s then employees on behalfof any
`(c)
`other personorentity.
`
`The provisions of this Section 7 shall not prevent ANM or Consultant from continuing
`ANM’s medical business as currently conducted or contemplated by ANM, or from continuing to
`supply existing consumer air bed and water bed customers listed on Exhibit A, or from continuing
`to service Nautilus warranty claims as such business has heretofore been conducted by ANM. SCC
`and Consultant will review Exhibit A quarterly and discuss any changes in ANM’s business with
`the listed companies.
`In the event that ANM contemplates business expansion beyond 100 beds
`annually with the companies listed, ANM will receive prior written approval from SCC before
`expanding.
`
`NoEmployee Benefits. Consultant shall not be considered to be an employee of
`8.
`SCC and shal! therefore not be entitled to participate in any of SCC'’s employee benefit plans or
`receive any benefits applicable generally to employees of SCC,
`
`No AdequateRemedy. The parties understand that if a party fails to fulfill the
`9.
`party’s obligations under Sections 5, 6 or 7 of this Agreement, the damages to the other parly
`would be very difficult to determine. Therefore, in addition to any other rights or remedies
`
`5
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`the breaching party hereby
`in equity, or by statute,
`law,
`available to the non-breaching at
`consents to the specific enforcement of this Agreement by the non-breaching party.
`
`10.
`
`Miscellaneous.
`
`No Conflicts. ANM and Consultant represent and warrant to SCC that
`(a)
`neither the entering into of this Agreement nor the performance of any of ANM’s or
`Consultant’s obligations hereunder will conflict with or constitute a breach under any
`obligation of ANM or Consultant under any agreement or contract to which ANM or
`Consultant is a party or any other obligation by which ANM or Consultant is bound.
`Without limiting the foregoing, ANM and Consultant agree that at no time will ANM or
`Consultant utilize any trade secrets or other intellectual property of any third party while
`performing services hereunder without the license or otherwise express authorization to
`do so.
`
`Successors and Assigns. This Agreement is binding on and inures to the
`(b)
`benefit of SCC’s and ANM’s successors and assigns, including any person orentity that
`acquires all or substantially all of the business or assets of such entity, and such
`successors and assigns are included within the definition of the terms “SCC” and
`“ANM,”respectively, as used in this Agreement. SCC may assign this Agreement only
`in connection with a merger, consolidation, assignment, sale or other disposition of
`substantially all of its assets or business.
`
`Modification. This Agreement may be modified or amended only by a
`(c)
`writing signed by both SCC and Consultant.
`
`‘The laws of Minnesota will govern the validity,
`GoverningLaw.
`(d)
`construction, and performance of this Agreement. Any legal proceeding related to this
`Agreement will be brought
`in an appropriate Minnesota court, and both SCC and
`Consultant hereby consent to the exclusive jurisdiction of that court for this purpose.
`
`Construction. Wherever possible, cach provision of this Agreement will
`(e)
`be interpreted so that it
`is valid under the applicable law.
`If any provision of this
`Agreement is to any extent invalid under the applicable law, that provision will still be
`effective to the extent it remains valid. The remainder of this Agreement also will
`continue to be valid, and the entire Agreement will continue to be valid in other
`jurisdictions.
`
`Waivers. No failure or delay by either SCC or Consultant in exercising
`(f)
`any right or remedy underthis Agreement will waive any provision of the Agreement, nor
`will any single or partial exercise by either SCC or Consultant of any right or remedy
`under this Agreement preclude either of them from otherwise or further exercising these
`rights or remedies, or any other rights or remedies granted by any law or any related
`document.
`
`Captions. The headings in this Agreement are for convenience only and
`(g)
`do not affect this Agreement’s interpretation.
`
`(h}
`
`Entire Agreement.
`
`This Agreement
`
`supersedes
`
`all previous and
`
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`contemporaneous oral negotiations, commitments, writings and understandings between
`the parties concerning the matters in this Agreement.
`
`Notices. All notices and other communications required or permitted
`(i)
`underthis Agreement shall be in writing and shall be hand-delivered or sent by registered
`orcertified first-class mail, postage prepaid, and shall be effective upon delivery if hand-
`delivered, or three days after mailing if mailed to the addresses stated at the beginning of
`this Agreement. These addresses may be changedat any time by like notice.
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`IN WITNESS WHEREOF, SCCand Consultant have executed this Agreement as of the
`date first above written.
`
`SELECT COMFORT CORPORATION
`
`CRAIG MILLER
`
`By
`
`7
`
`Its
`
`Lille
`
`Social Security or Federal ‘Tax ID#:
`
`Redacted
`
`AMERICAN NATIONAL MANUFACTURING, INC.
`
`Ba
`Its
`akeA peel
`
`_
`
`—_————
`as
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`AMENDMENT TO THE AGREEMENT
`
`is made and entered
`THIS AMENDMENT TO THE AGREEMENT (the ‘Amendment’,
`effective as of January 22, 2009, by and between SELECT COMFORT CORPORATION,a
`corporation organized and existing underthe laws of the state of Minnesota, (9800 59" Avenue
`North, Minneapolis, MN, 55442), (Seleet’), and American National Manufacturing, Inc. (AMN)
`and Craig Miller, President- American National Manufacturing, Inc. (Consultant), 252 Mariah
`Circle, Corona, CA 92879-1751 and amends that certain Agreement by and between Select and
`AMN and Consultant, effective as of August 11, 2006.
`
`WHEREAS, Select and AMN and Consultant desire to amend certain provisions of the
`Agreement.
`
`NOW, THEREFORE, in consideration of the mutual promises and covenants hereinset
`forth, AMN, Consultant and Select hereby agree as follows:
`
`1,
`
`2.
`
`3.
`
`Section 3(a) Initial Term, shall be deleted in its entirety and replaced with:
`‘Subject to earlier termination in accordance with paragraph 3(c) of the Agreement,
`the term of ANM’s and Consultants services under this Agreement shall commence on
`approximately August 1, 2006 and will continue through December 31, 2011”
`
`Section 3(b) Automatic Renewal Periods, shall be deleted in its entirety and replaced
`with:
`‘After the Initial Term, this Agreement shall not automatically renew.”
`
`Section 3(d) Effect of Termination, shall be amendedas follows:
`
`to termination in accordance with
`
`“the termination of this Agreement pursuant
`paragraph 3(c) of the Agreement;
`(i)
`in the event that termination occurs upon expiration of the Agreement on
`December 31, 2011, shall not affect or impair any remaining obligations of
`the parties under
`this Agreement,
`including any remaining payment
`obligations arising with respect to performance under this Agreement prior
`to the termination of this Agreement and the continuing obligations of SCC,
`ANMor Consultant under Sections 5, 6 and 7 hereof.
`in the event that termination occurs during Calendar Year 2010, Section 7 of
`the Agreementshall be deleted in its entirety and replaced with:
`
`(ii)
`
`‘CompetitiveActivities: ANM and Consultant agree that during the
`term of ANM’s and Consultants engagement with SCC underthis
`Agreement, and for a period of 6 months following the termination
`of the Agreement, Consultant will not alone, or in any capacity
`with anotherfirm, directly or indirectly;
`
`1/2e/2009
`
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`(a) Engage in any commercial activity or services related
`to adjustable firmness sleep surfaces for mattresses or
`sofa sleepers for the general consumer market with any
`of following organizations or companies:
`Sealy Incorporated
`SimmonsIncorporated
`Serta incorporated
`Spring Air Incorporated
`Tempur-Pedic Incorporated
`Comfortaire Incorporated
`Within any state in the United States or within any
`international market; or
`Interfere or attempt to interfere with SCC’ relationship
`with any of its potential suppliers or current customers;
`or
`to employ any of SCCs then
`(c) Employ or attempt
`employees on behalf of any person orentity’
`Any remaining payment obligations arising with respect to performance
`under this Agreementprior to the termination of this Agreement and the
`continuing obligations of SCC, ANM or Consultant under Sections 5 and
`6 of the Agreement hereof shall remainintact.
`
`(b)
`
`(ii)
`
`in the event that termination occurs during Calendar Year 2009, Section 7
`ofthe Agreement shall be deleted in its entirety.
`Any remaining payment obligations arising with respect to performance
`under this Agreement prior to the termination of this Agreement and the
`continuing obligations of SCC, ANM or Consultant under Sections 5 and
`6 of the Agreement hereofshall remain intact,’
`
`Section 4(a) Cash Compensationshall be amended as follows:
`‘SCC shall pay Consultant annual cash compensation according the schedule below:
`Calendar Year 2009: $150,000
`Calendar Year 2010: $150,000
`Calendar Year 2011: $100,000
`Such compensation shall be payable in quarterly installments on the first day of
`February, May, August and Novembereach year”
`
`Section 4{c) Post-Termination Cash Compensation.
`entirety.
`
`Shall be eliminated in its
`
`Section 7 Competitive Activities shall be deleted in its entirety and replaced with:
`“ANM and Consultant agree that during the term of ANM’s and Consultants
`engagement with SCC under this Agreement, and for a period of 12 months
`following either the termination or expiration of the Agreement, Consultant will
`not alone, or in any capacity with another firm, directly or indirectly;
`
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`(a2) Engage in any commercial activity or services related to adjustable firmness
`sleep surfaces for mattresses or sofa sleepers for the general consumer
`market with anyof following organizations or companies:
`Sealy Incorporated
`Simmons Incorporated
`Serta Incorporated.
`Spring Air Incorporated
`Tempur-Pedic Incorporated
`Comfortaire Incorporated
`Within any state in the United States or within any international market; or
`(b)
`Interfere or attempt to interfere with SCC’s relationship with any ofits
`current or potential suppliers or current customers, or
`(c) Employ or attempt to employ any of SCCs then employees on behalf of any
`person orentity
`
`The provisions of this Section 7 shall not prevent ANM or Consultant from
`continuing ANM’s medical business as currently conducted or contemplated by
`ANM,or from continuing to supply existing consumer air bed and water bed
`customers listed on Exhibit A of the Agreement, or from continuing to service
`Nautilus warranty claims as such business has heretofore been conducted by
`ANM?
`
`All other Sections and provisions in the Agreement not specifically addressed in this amendment
`shall remain unchanged and in full force.
`
`IN WITNESS WHEREOF,the parties hereto have caused this Amendment to be executed as of
`the day and yearfirst written above.
`
`
`
`TitleVicePfesident, Strategic Sourcing
`
`Date:January22. 2009
`
`CRAIG MILLER
`
`ByLGMil
`‘(ense Mtat
`
`Title
`
`Date.A. 27-0F
`
`AMERICAN NATIONAL
`MANUFACTURING,INC,
`
`bspli.
`
`Tide©
`
`
`
`ee
`
`DateA ZF 25
`
`096122 - Amendment_American National Mfg Contract_08112006.D0C
`
`3
`
`172272009
`
`Confidential
`
`Sleep Number Corp. - EXHIBIT 2037 - IPR2019-00500 - Page 11
`
`DIR0023726
`
`TrExAppx13027
`
`Sleep Number Corp. - EXHIBIT 2037 - IPR2019-00500 - Page 11
`
`