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Consulting Agreement - Select Comfort Corp. and Lawrence P. Murphy

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                              CONSULTING AGREEMENT

     THIS  AGREEMENT  is  effective  as of May 4, 1999  between  Select  Comfort
Corporation,  a Minnesota  corporation (the  "Company"),  and Lawrence P. Murphy
(the "Consultant").

     WHEREAS,  the  Consultant  has been  nominated  for  election to serve as a
member  of the Board of  Directors  of the  Company  (the  "Board")  with a term
expiring at the 2002 annual shareholders' meeting; and

     WHEREAS,  the  Company  also  desires to engage the  Consultant  to perform
certain  consulting and strategic advisory services in order to benefit from the
Consultant's management experience and abilities,  and the Consultant desires to
accept  such  engagement,  all upon the terms and  conditions  set forth in this
Agreement;

     NOW,  THEREFORE,  in consideration of the mutual promises contained herein,
the Company and the  Consultant,  each intending to be legally  bound,  agree as
follows:

     1.  ENGAGEMENT AND DUTIES.

     (a) BOARD SERVICE.  The Consultant agrees to serve as a member of the Board
     for an initial term commencing at the 1999 annual shareholders' meeting and
     expiring at the 2002 annual  shareholders'  meeting or until his  successor
     shall  have  been  duly  elected  and  qualified,  subject  to the  earlier
     resignation of the Consultant at his  discretion.  The Company  anticipates
     that the Board will have four regularly scheduled meetings per year, one or
     two of which per year will be held in California.

     (b) CONSULTING AND STRATEGIC ADVISORY SERVICES. Subject to all of the terms
     and  conditions  of this  Agreement,  the  Company  agrees  to  engage  the
     Consultant  to provide the Company with various  consulting  and  strategic
     advisory  services as described herein and the Consultant  agrees to accept
     such engagement.  During the term of this Agreement,  the Consultant agrees
     to consult with the Board and the Company,  and to provide such  consulting
     and  strategic  advisory  services  to the  Board  and the  Company  as are
     consistent  with  the  Consultant's  expertise  and  experience,  including
     without limitation, consulting and strategic advisory services with respect
     to: (i) overall  strategic  direction,  (ii)  acquisitions and new business
     development,  (iii)  corporate  marketing  and brand  development  and (iv)
     organizational  structure  and  development,   all  as  may  be  reasonably
     requested and further defined by the Board and agreed to by the Consultant.

     (c) TERM. The term of this Agreement will commence on the date of execution
     and delivery of this  Agreement by each of the parties  hereto and continue
     through the Company's annual shareholders' meeting in 2001.

     (d) TIME  COMMITMENT.  During the first year of the term of this  Agreement
     expiring  at the  Company's  annual  shareholders'  meeting  in  2000,  the
     Consultant agrees to devote up to twelve (12) days per semester,  including
     reasonable travel time, to the performance


<PAGE>

     of the services  provided for in this Agreement.  During the second year of
     the term of this Agreement  expiring at the Company's annual  shareholders'
     meeting  in 2001,  the  Consultant  agrees to devote up to six (6) days per
     semester,  including  reasonable  travel time,  to the  performance  of the
     services  provided  for in this  Agreement.  Time spent in  performance  of
     duties as a director shall be deemed to be time devoted to the Consultant's
     duties hereunder.  Time in excess of the foregoing base time commitment, as
     requested by the Company and on an as available  basis for the  Consultant,
     will be compensated at $7,500 per day. Meeting and travel times are subject
     to reasonable advance notice.  Participation in Board meetings by telephone
     conference will be allowed when necessary.

     (e) NATURE OF RELATIONSHIP;  AUTHORITY.  The services to be rendered by the
     Consultant  to  the  Company  pursuant  to  this  Agreement  will  be as an
     independent contractor,  and this Agreement does not make the Consultant an
     employee,  agent or legal  representative  of the  Company  for any purpose
     whatsoever,  including without limitation  participation in any benefits or
     privileges  given or extended by the Company to its employees.  No right or
     authority is granted to the  Consultant to assume or create any  obligation
     or responsibility,  express or implied,  on behalf of or in the name of the
     Company.  The  Company  will  not  withhold  from the  amounts  paid to the
     Consultant  under this  Agreement  for any federal or state taxes,  and the
     Consultant agrees that he will pay all taxes due on such amounts paid.

     (f) OTHER ENGAGEMENTS.  Notwithstanding  anything to the contrary contained
     in this Agreement,  other than Section 5 hereof, nothing shall be construed
     to limit the ability of the Consultant to consult for or serve on the Board
     of Directors of such other  corporations,  trade  associations,  charitable
     organizations  or other entities as the Consultant  shall from time to time
     deem  appropriate and to engage in such other  activities as the Consultant
     shall reasonably deem not to be in conflict with his duties to the Company.

     2.  TERMINATION.  Subject to the respective  continuing  obligations of the
Company and the Consultant under Sections 4, 5 and 6 of this Agreement:

     (a) This  Agreement  may be  terminated  by the  Company  immediately  upon
     written  notice  to  the  Consultant   "for  cause,"  with  the  basis  for
     termination specified in such notice. For purposes of this Agreement,  "for
     cause"  will  mean  (i)   dishonesty,   fraud,   gross   misrepresentation,
     embezzlement or material and deliberate injury or attempted injury, in each
     case related to the Company or its business,  (ii) any unlawful or criminal
     activity of a serious  nature,  (iii) any willful breach of duty,  habitual
     neglect of duty or unreasonable job performance,  or (iv) a material breach
     of any provision of this Agreement.

     (b) This Agreement may be terminated by the Company or the Consultant  upon
     not less than ninety (90) days prior written notice without cause.

     (c) This Agreement will be  automatically  terminated upon the death of the
     Consultant.



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<PAGE>

     3.  COMPENSATION.

     (a) CASH COMPENSATION FOR BOARD AND COMMITTEE MEETINGS. The Consultant will
     receive the cash  compensation per Board meeting attended in person and per
     Board Committee meeting attended in person as is fixed from time to time by
     the  Board of  Directors  for  payment  to  non-employee  directors  of the
     Company,  which compensation is currently $3,500 per Board meeting and $500
     per Board Committee meeting.

     (b) MONTHLY RETAINER.  In consideration of the Consultant's  services under
     this  Agreement,  the Company will pay the  Consultant a retainer of $8,333
     per month payable on the 15th day of each month commencing May 15, 1999.

     (c)  STOCK  OPTIONS.  In  addition  to the cash  compensation  and  monthly
     retainer described above, and subject to the terms and conditions set forth
     below,  the  Consultant  will be  entitled to receive  non-qualified  stock
     options (i.e.,  options that are not intended to be incentive stock options
     within the meaning of Section 422 of the Internal  Revenue Code of 1986, as
     amended) as follows:

          (i)  BOARD  SERVICE  OPTIONS.  In  consideration  of the  Consultant's
          service on the Board, the Consultant will receive  non-qualified stock
          options to purchase  fifteen  thousand  (15,000)  shares of the Common
          Stock of the Company at an exercise  price equal to the average of the
          high and low trading prices of the Company's  Common Stock on the date
          of the Consultant's election to the Board of Directors,  which options
          will  become  exercisable  in equal  increments  of  one-twenty-fourth
          (1/24)  of such  number  of  options  at the end of each of the  first
          twenty-four  (24)  months of the  Consultant's  term of service on the
          Board of Directors so long as the Consultant continues to serve on the
          Board.  The options  provided  under this Section  3(c)(i) that become
          exercisable  will remain  exercisable for a minimum period of five (5)
          years from the date hereof,  regardless of  continuing  service on the
          Board,  and  thereafter,  if the Consultant  continues to serve on the
          Board beyond such 5-year  period,  will remain  exercisable  until the
          earlier of (A) ninety (90) days after the  Consultant  ceases to serve
          on the Board or (B) ten (10) years from the date hereof.

          (ii) CONSULTING  SERVICES OPTIONS.  In consideration of the consulting
          services to be provided by the  Consultant  hereunder,  the Consultant
          will receive  non-qualified  stock options to purchase  sixty thousand
          (60,000)  shares of the Common  Stock of the  Company  at an  exercise
          price of $15.38 per share,  which options will become  exercisable  in
          equal increments of one-twenty-fourth (1/24) of such number of options
          at the end of each of the first twenty-four (24) months of the term of
          this  Agreement  so long as the  Consultant  continues  to  serve as a
          consultant  to the Company.  The options  provided  under this Section
          3(c)(ii) that become exercisable will remain exercisable for a minimum
          period  of  five  (5)  years  from  the  date  hereof,  regardless  of
          continuing service as a consultant to the



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<PAGE>

          Company,  and  thereafter,  if the Consultant  continues to serve as a
          consultant  to the  Company  beyond such  5-year  period,  will remain
          exercisable  until the  earlier  of (A)  ninety  (90)  days  after the
          Consultant  ceases to serve as a consultant  to the Company or (B) ten
          (10) years from the date hereof.

          (iii) ACCELERATION OF VESTING UPON A CHANGE IN CONTROL. Upon a "Change
          in Control," as defined in the Company's 1997 Stock Incentive Plan, if
          the  Consultant  remains  engaged  as a  director  (in the case of the
          options  provided  under Section  3(c)(i)  above) or consultant to the
          Company (in the case of the options  provided  under Section  3(c)(ii)
          above)  immediately  prior  to  such  Change  in  Control,  all of the
          foregoing  options that have been provided under  Sections  3(c)(i) or
          Section 3(c)(ii) above, as the case may be, and remain  outstanding as
          of the  date  of  such  Change  in  Control  will  become  immediately
          exercisable and will remain  exercisable  until the end of the 10-year
          term of such options,  regardless of whether the Consultant  continues
          to serve on the Board or as a consultant to the Company.

          (iv) DOCUMENTATION OF STOCK OPTIONS. All of the foregoing options will
          be evidenced by the  Company's  standard form of  non-statutory  stock
          option  agreement,  except as modified  by the terms set forth  above,
          including  standard  protection  against  dilution in the event of any
          stock  split,  stock  dividend  or  similar  recapitalization  of  the
          Company.

     (c) TRAVEL  EXPENSES.  The Company will pay or reimburse the Consultant for
     first class travel  expenses for travel required for the performance of the
     Consultant's duties under this Agreement,  whether as a member of the Board
     or as a  consultant,  provided that such expenses are incurred and properly
     accounted  for  in  accordance  with  the  Company's   policies   regarding
     reimbursement of travel expenses as may be in effect from time to time.

     4.  CONFIDENTIAL INFORMATION.

     (a)   "Confidential   Information,"  as  used  in  this  Section  6,  means
     information  that is not  generally  known and that is  proprietary  to the
     Company or that the  Company is  obligated  to treat as  proprietary.  This
     information includes, without limitation:

          (i) trade secret or other  proprietary  information  about the Company
          and its products; and

          (ii)  proprietary  information  concerning any of the Company's  past,
          current, or possible future products,  including (without  limitation)
          proprietary  information  about the Company's  research,  development,
          engineering, purchasing, manufacturing, accounting, marketing, selling
          or leasing.



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<PAGE>

     Notwithstanding  anything  to  the  contrary  contained  herein,  the  term
     "Confidential  Information"  does not include  information  which (i) is or
     becomes  available to the public other than as a result of a disclosure  by
     the Consultant,  (ii) was within the  Consultant's  possession prior to its
     being  furnished to the Consultant by or on behalf of the Company  pursuant
     to this  Agreement,  or (iii)  becomes  available  to the  Consultant  on a
     non-confidential  basis  from  a  source  other  than  the  Company  or its
     representatives.

     (b) The Consultant  will not,  either during or after his engagement by the
     Company,  use  or  disclose  Confidential  Information  to any  person  not
     authorized  by the  Company to receive  it,  except (i) as  required in the
     performance of the Consultant's duties to the Company,  (ii) as required to
     enforce this  Agreement,  or (iii) as otherwise  required by law.  When the
     Consultant's  engagement with the Company ends, he will, upon the Company's
     request,   promptly   turn  over  to  the   Company  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  in  his
     possession, regardless of who prepared them.

     5. COMPETITIVE  ACTIVITIES.  The Consultant  agrees that during the term of
this  Agreement  and for a period of two (2)  years  after  termination  of this
Agreement,  regardless of the reason for such termination, he will not alone, or
in any capacity with another firm:

     (a) directly or  indirectly  compete with the  Company's  business,  as the
     Company  has  conducted  it during  the  Consultant's  engagement  with the
     Company,  within any state in the United States or any country in which the
     Company  directly or  indirectly  markets or services  products or provides
     services or  reasonably  plans or intends  during  Consultant's  engagement
     period to market or service products or provide services; or

     (b)  employ or attempt to employ any of the  Company's  then  employees  on
     behalf of any other entity competing with the Company.

     6. NO  ADEQUATE  REMEDY.  The  Consultant  understands  that if he fails to
fulfill his obligations under Sections 4 and 5 of this Agreement, the damages to
the Company would be very difficult to determine.  Therefore, in addition to any
other  rights or  remedies  available  to the  Company  at law,  in equity or by
statute,  the  Consultant  hereby  consents to the specific  enforcement  by the
Company  of  Sections  4  and 5 of  this  Agreement  through  an  injunction  or
restraining order issued by an appropriate court.

     7. MISCELLANEOUS.

     (a)  SUCCESSORS  AND ASSIGNS.  This Agreement may not be assigned by either
     party without the other party's prior written consent.

     (b)  MODIFICATION.  This  Agreement  may be modified  or amended  only by a
     writing signed by each of the parties hereto.



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<PAGE>

     (c)  GOVERNING  LAW.  The laws of the State of  Minnesota  will  govern the
     validity,  construction,  and performance of this Agreement, without regard
     to the  conflict  of  laws  provisions  of  any  jurisdictions.  Any  legal
     proceeding  related to this  Agreement  will be  brought in an  appropriate
     Minnesota  court,  and each of the parties  hereto  hereby  consents to the
     exclusive jurisdiction of such courts for this purpose.

     (d) CONSTRUCTION.  Wherever possible, each provision of this Agreement will
     be interpreted so that it is valid under  applicable  law. If any provision
     of this  Agreement is to any extent  invalid  under  applicable  law in any
     jurisdiction,  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.

     (e) NON-WAIVER. No failure or delay by either the Company or the Consultant
     in  exercising  any right or remedy  under  this  Agreement  will waive any
     provision  of the  Agreement.  Nor will any single or partial  exercise  by
     either the  Company  or the  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.

     (f) COUNTERPARTS.   This   Agreement  may  be  executed   in  two  or  more
     counterparts,  each of which will constitute an original, but all of which,
     when taken together, will constitute one and the same instrument.

     (g) ENTIRE   AGREEMENT.   This  Agreement   supersedes   all  previous  and
     contemporaneous oral negotiations, commitments, writings and understandings
     between  the  parties  hereto  concerning  the  matters in this  Agreement,
     including,  without  limitation,  any  policy or  personnel  manuals of the
     Company or any of its subsidiaries or affiliates.

     (h) NOTICES.  All  notices and other  communications  required or permitted
     under this  Agreement  will be in  writing  and hand  delivered  or sent by
     registered  first-class mail,  postage prepaid,  and will be effective upon
     receipt,  if sent to the following  address or such other address as either
     party will have notified the other party:

         If to the Company:           Select Comfort Corporation
                                      6105 Trenton Lane North
                                      Minneapolis, Minnesota 55442
                                      Attn: Chief Executive Officer

         If to the Consultant:        Lawrence P. Murphy
                                      1176 Loma Linda Drive
                                      Beverly Hills, CA 90210




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<PAGE>


     IN WITNESS  WHEREOF,  the Company and the  Consultant  have  executed  this
Agreement as of the date first above written.

                                      SELECT COMFORT CORPORATION


                                      By:  /s/Daniel J. McAthie
                                      Its: President and Chief Executive Officer


                                      /s/Lawrence P. Murphy
                                      Lawrence P. Murphy


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