Form SC 13D/A - General Statement of Acquisition of Beneficial Ownership: [Amend]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO § 240.13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO

§ 240.13d-2(a)

(Amendment No. 5)¹

Sleep Number Corporation

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

83125X103

(CUSIP Number)

STADIUM CAPITAL MANAGEMENT, LLC

199 Elm Street

New Canaan, CT 06840-5321

(203) 972-8235

RYAN NEBEL

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

December 2, 2024

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box ☒.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

1 The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 83125X103


	1	NAME OF REPORTING PERSON

			Stadium Capital Management, LLC
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☒
						(b) ☐

	3	SEC USE ONLY


	4	SOURCE OF FUNDS

			AF
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐


	6	CITIZENSHIP OR PLACE OF ORGANIZATION

			Delaware
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					- 0 -
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					2,616,459
PERSON WITH			9	SOLE DISPOSITIVE POWER

					- 0 -
			10	SHARED DISPOSITIVE POWER

					2,616,459
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

			2,616,459
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐


	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

			11.7%
	14	TYPE OF REPORTING PERSON

			IA, OO

2

CUSIP No. 83125X103


	1	NAME OF REPORTING PERSON

			Stadium Capital Management GP, L.P.
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☒
						(b) ☐

	3	SEC USE ONLY


	4	SOURCE OF FUNDS

			AF
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐


	6	CITIZENSHIP OR PLACE OF ORGANIZATION

			Delaware
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					- 0 -
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					2,616,459
PERSON WITH			9	SOLE DISPOSITIVE POWER

					- 0 -
			10	SHARED DISPOSITIVE POWER

					2,616,459
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

			2,616,459
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐


	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

			11.7%
	14	TYPE OF REPORTING PERSON

			PN

3

CUSIP No. 83125X103


	1	NAME OF REPORTING PERSON

			Stadium Special Opportunity I, L.P.
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☒
						(b) ☐

	3	SEC USE ONLY


	4	SOURCE OF FUNDS

			WC
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐


	6	CITIZENSHIP OR PLACE OF ORGANIZATION

			Delaware
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					- 0 -
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					401,459
PERSON WITH			9	SOLE DISPOSITIVE POWER

					- 0 -
			10	SHARED DISPOSITIVE POWER

					401,459
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

			401,459
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐


	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

			1.8%
	14	TYPE OF REPORTING PERSON

			PN

4

CUSIP No. 83125X103


	1	NAME OF REPORTING PERSON

			Stadium Capital Partners, L.P.
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☒
						(b) ☐

	3	SEC USE ONLY


	4	SOURCE OF FUNDS

			WC
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐


	6	CITIZENSHIP OR PLACE OF ORGANIZATION

			Delaware
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					- 0 -
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					2,215,000
PERSON WITH			9	SOLE DISPOSITIVE POWER

					- 0 -
			10	SHARED DISPOSITIVE POWER

					2,215,000
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

			2,215,000
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐


	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

			9.9%
	14	TYPE OF REPORTING PERSON

			PN

5

CUSIP No. 83125X103


	1	NAME OF REPORTING PERSON

			Alexander M. Seaver
	2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP				(a) ☒
						(b) ☐

	3	SEC USE ONLY


	4	SOURCE OF FUNDS

			AF
	5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)				☐


	6	CITIZENSHIP OR PLACE OF ORGANIZATION

			USA
NUMBER OF			7	SOLE VOTING POWER
SHARES
BENEFICIALLY					- 0 -
OWNED BY			8	SHARED VOTING POWER
EACH
REPORTING					2,616,459
PERSON WITH			9	SOLE DISPOSITIVE POWER

					- 0 -
			10	SHARED DISPOSITIVE POWER

					2,616,459
	11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

			2,616,459
	12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				☐


	13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

			11.7%
	14	TYPE OF REPORTING PERSON

			IN

6

CUSIP No. 83125X103

1

NAME OF REPORTING PERSON

Patrick A. Hopf

2

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) ☒

(b) ☐

3

SEC USE ONLY

4

SOURCE OF FUNDS

PF

5

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)

☐

6

CITIZENSHIP OR PLACE OF ORGANIZATION

USA

NUMBER OF

7

SOLE VOTING POWER

SHARES

BENEFICIALLY

51,500

OWNED BY

8

SHARED VOTING POWER

EACH

REPORTING

- 0 -

PERSON WITH

9

SOLE DISPOSITIVE POWER

51,500

10

SHARED DISPOSITIVE POWER

- 0 -

11

AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

51,500

12

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

☐

13

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

Less than 1%

14

TYPE OF REPORTING PERSON

IN

7

CUSIP No. 83125X103

The following constitutes Amendment No. 5 to the Schedule 13D filed by the undersigned (“Amendment No. 5”). This Amendment No. 5 amends the Schedule 13D as specifically set forth herein. Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the Schedule 13D.

Item 2.

Identity and Background.

Item 2 is hereby amended and restated to read as follows:

(a) This statement is filed by:

(i)

Stadium Capital Management, LLC, a Delaware limited liability company (“SCM”);

(ii)

Stadium Capital Management GP, L.P., a Delaware limited partnership (“SCMGP”);

(iii)

Stadium Special Opportunity I, L.P., a Delaware limited partnership (“SSO”);

(iv)

Stadium Capital Partners, L.P., a Delaware limited partnership (“SCP”);

(v)

Alexander M. Seaver (together with SCM, SCMGP, SSO and SCP, “Stadium Capital”); and

(vi)

Patrick A. Hopf.

Each of the foregoing is referred to as a “Reporting Person” and collectively as the “Reporting Persons.” Each of the Reporting Persons is party to that certain Joint Filing and Solicitation Agreement, as defined and further described in Item 6. Accordingly, the Reporting Persons are hereby filing a joint Schedule 13D.

(b) The principal business address of Stadium Capital is 199 Elm Street, New Canaan, Connecticut 06840. The principal business address of Mr. Hopf is 14830 Encendido, San Diego, California 92127.

(c) The principal business of SSO and SCP is investing in securities. The principal business of SCMGP is acting as the general partner of SSO and SCP. The principal business of SCM is acting as the investment advisor to SSO and SCP and as the general partner of SCMGP. The principal occupation of Mr. Seaver is acting as the manager of SCM. The principal occupation of Mr. Hopf is acting as a private investor.

(d) No Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) No Reporting Person has, during the last five years, been party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

8

CUSIP No. 83125X103

(f) SCM, SCMGP, SSO and SCP are organized under the laws of the State of Delaware. Messrs. Seaver and Hopf are citizens of the United States of America.

Item 3.

Source and Amount of Funds or Other Consideration.

Item 3 is hereby amended and restated to read as follows:

The Shares beneficially owned by Stadium Capital were purchased using their investment capital or funds under management. The aggregate purchase price of 2,616,459 Shares beneficially owned by Stadium Capital was approximately $56,352,966 (including brokerage commissions and transaction costs).

The Shares beneficially owned by Mr. Hopf were purchased with personal funds (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business). The aggregate purchase price of the 50,000 Shares beneficially owned directly by Mr. Hopf is approximately $703,318, including brokerage commissions. The aggregate purchase price of the call options held by Mr. Hopf referencing 1,500 Shares is approximately $98, excluding brokerage commissions.

Item 4.

Purpose of Transaction.

Item 4 is hereby amended to add the following:

On December 2, 2024, SCP delivered a letter to the Issuer nominating Kevin Baker, Patrick A. Hopf, Jeffrey T. Jackson and Jessica M. Prager (collectively, the “Nominees”) for election to the Board of Directors of the Issuer (the “Board”) at the Issuer’s 2025 annual meeting of shareholders (the “Annual Meeting”).

Also on December 2, 2024, Stadium Capital issued a press release and letter (the “December 2^nd Letter”) to the Issuer’s shareholders announcing its nomination of the Nominees for election to the Board at the Annual Meeting and highlighting why it believes the Nominees are best positioned to help the Issuer identify its next Chief Executive Officer and guide the Issuer back to the path of growth and profitability. The December 2^nd Letter highlighted that Stadium Capital’s slate of director candidates includes the Issuer’s former Chairman and Interim CEO and individuals with significant shareholdings, capital allocation and product innovation expertise and track records overseeing value-enhancing turnarounds. Stadium Capital further noted that it believes it would be in the best interest of all shareholders for the Issuer to collaborate with Stadium Capital to refresh the Board, appoint an Executive Chairman and ensure an independent search process to identify the Issuer’s next Chief Executive Officer, but that it looks forward to shareholders deciding the Issuer’s fate at the Annual Meeting if the Board refuses. The foregoing description of the December 2^nd Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the December 2^nd Letter, which is attached hereto as Exhibit 99.1 incorporated herein by reference.

Below please find brief backgrounds of Stadium Capital’s highly qualified nominees.

9

CUSIP No. 83125X103

Patrick A. Hopf

Mr. Hopf is the former Interim CEO and Chairman of the Issuer and a successful private investor in consumer-oriented companies. He will bring a positive track record of value creation as well as strategic change and board development experience.

-

Proven Value Creator with Deep Knowledge of the Issuer: At St. Paul Venture Capital – one of the ten largest venture capital firms in the U.S. at its peak – Mr. Hopf led the firm’s investment in the Issuer (then called Select Comfort) in 1991and later became the Issuer’s Interim CEO and Chairman. Mr. Hopf oversaw multiple turnarounds at the Issuer and during his leadership, the Issuer’s market value grew to over $1.4 billion. He started the direct response sales channel at the Issuer, helped launch the retail channel and Roadshow channel, and was instrumental in establishing the internet channel in the late 1990s.

-

Experience in Board Development and CEO Searches: Mr. Hopf has been on the boards of more than 30 private companies and was the Chairman of many of them, including the Issuer, where he led three separate CEO searches for the Issuer.

-

Strong Alignment with Shareholders: Mr. Hopf has steadfastly represented shareholder interests as a public market investor, private investor, board member and operating manager for over 40 years. Mr. Hopf also has a significant personal investment in the Issuer.

Jeffrey T. Jackson

Mr. Jackson is an experienced CEO and public company director with an outstanding record of value creation and extensive experience managing cyclical companies across market cycles, which will be particularly relevant for the Issuer.

-

Proven Value Creator: After Mr. Jackson was named CEO of PGT Innovations (PGT), the company’s shareholder returns annualized in the high-teens and PGT more than doubled EBITDA through organic growth and M&A activity.

-

Extensive Experience Managing a Cyclical Business Across All Phases of Growth: Prior to ascending to the CEO role, Mr. Jackson also served as PGT’s CFO, where he helped guide the business through the housing boom, bust and subsequent recovery, including effectively managing its cost structure to successfully position the company to capitalize on value-enhancing opportunities when the market recovered.

-

Experience Selling Products Through Multiple Distribution Channels: Mr. Jackson drove accretive growth across PGT’s portfolio of brands by selling its various products through company-owned retail stores, third-party retailers and independent dealers.

Jessica M. Prager

Ms. Prager has extensive experience building and scaling high-performing, culturally relevant brands. Her expertise in leveraging consumer data, driving product innovation and bridging digital and physical touchpoints will be particularly relevant in helping the Issuer achieve its growth potential.

-

Proven Value Creator: Ms. Prager is Senior Vice President of Product at Roman Health Ventures (“Ro”), where she was one of the company’s first 10 employees and has been instrumental in scaling the company, which is now valued at $7 billion. She has helped drive Ro’s significant growth and cement its position as a leader in the consumer healthcare technology space.

-

Expertise in Leveraging Consumer Data and Insights to Drive Growth: Ms. Prager has a proven track record of using consumer data at scale and analyzing consumer insights to refine customer experiences and optimize growth marketing strategies. She has deep experience in demand generation, direct-response marketing strategies, brand building and optimizing ecommerce platforms from her roles at Ro, ClassPass, Bain & Company and PepsiCo.

-

Track Record of Marrying Brand Vision with Consumer Experience: At ClassPass, Ms. Prager helped redefine how consumers access fitness and wellness, connecting digital discovery with physical participation. At Warby Parker, she supported the launch of the company’s first permanent physical retail store, creating an omnichannel model that set new industry standards. Across Ro, ClassPass and Warby Parker, she has demonstrated an ability to scale businesses while maintaining brand integrity and cultural relevance.

10

CUSIP No. 83125X103

Kevin Baker

Mr. Baker is a Managing Partner at Stadium Capital, the Issuer’s largest owner, and will bring a much-needed ownership perspective to the Issuer’s boardroom.

-

Shareholder Perspective with a Clear Understanding of the Issuer’s Business: Exceptionally deep research and due diligence is a centerpiece of Stadium Capital’s patient investment strategy. As part of Stadium Capital’s investment team, Mr. Baker has led extensive due diligence spanning a decade on the Issuer and the mattress industry. Mr. Baker will bring the largest shareholder’s perspective to the boardroom and be laser-focused on driving value for all shareholders.

-

Capital Allocation and Financial Markets Expertise: Mr. Baker has 14 years of experience as an investor in public companies, with significant experience working directly with the leadership teams of Stadium Capital’s portfolio companies on value-enhancing capital allocation and capital structure decisions.

Item 5.

Interest in Securities of the Issuer.

Items 5(a) – (c) are hereby amended and restated to read as follows:

(a) – (b) The responses of the Reporting Persons to rows 7, 8, 9, 10, 11 and 13 on the cover pages of this Amendment No. 5 are incorporated herein by reference. As of the date of this Amendment No. 5, Stadium Capital beneficially owned 2,616,459 Shares, representing approximately 11.7% of the outstanding Shares, and Mr. Hopf beneficially owned 51,500 Shares, including 1,500 Shares underlying certain call options that are currently exercisable, representing less than 1% of the outstanding Shares. The percentages reported herein relating to beneficial ownership of Shares are based upon 22,371,000 Shares outstanding as of September 28, 2024, as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 5, 2024.

Each of the Participants (as defined below) may be deemed to be a member of a “group” with the other Participants for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and such group may be deemed to beneficially own the 2,667,959 Shares owned in the aggregate by all of the Participants, constituting approximately 11.9% of the outstanding Shares. The filing of this Schedule 13D shall not be deemed an admission that the Participants are, for purposes of Section 13(d) of the Exchange Act, the beneficial owners of any securities of the Issuer he, she or it does not directly own. Each of the Participants specifically disclaims beneficial ownership of the securities reported herein that he, she or it does not directly own.

(c) Stadium Capital has not effected any transactions in the securities of the Issuer since the filing of Amendment No. 4. Mr. Hopf’s transactions in the securities of the Issuer during the past 60 days are set forth in Schedule A and are incorporated herein by reference. All of such transactions were effected in the open market unless otherwise noted therein.

11

CUSIP No. 83125X103

Item 6.

Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

Item 6 is hereby amended to add the following:

On December 2, 2024, Stadium Capital and the Nominees (collectively, the “Participants”) entered into a Joint Filing and Solicitation Agreement (the “Joint Filing and Solicitation Agreement”) pursuant to which, among other things, (i) the Participants agreed to the joint filing on behalf of each of them of statements on Schedule 13D with respect to the securities of the Issuer to the extent required by applicable law, (ii) the Participants agreed to solicit proxies for the election of certain persons nominated for election to the Board at the Annual Meeting (including those nominated by or on behalf of Stadium Capital), (iii) the Nominees agreed not to enter into any transactions in the securities of the Issuer without the prior written consent of Stadium Capital and (iv) Stadium Capital agreed to bear all pre-approved expenses incurred in connection with the group’s activities. The Joint Filing and Solicitation Agreement is attached hereto as Exhibit 99.2 and is incorporated herein by reference.

Each of Messrs. Baker, Hopf and Jackson have granted Mr. Seaver a power of attorney (the “Powers of Attorney”) to execute certain SEC filings and other documents in connection with the solicitation of proxies from the Issuer’s shareholders in connection with the Annual Meeting and any related transactions. The Powers of Attorney are attached hereto as Exhibit 99.3 and are incorporated herein by reference.

SCP has signed indemnification letter agreements (the “Indemnification Agreements”) with each of the Nominees, other than Mr. Baker, pursuant to which SCP agreed to indemnify such Nominees against claims arising from the solicitation of proxies from the Issuer’s shareholders in connection with the Annual Meeting and any related transactions. The Indemnification Agreements do not extend to any potential claims made against such Nominees in their respective capacities as directors, if elected. A form of the Indemnification Agreements is attached hereto as Exhibit 99.4 and is incorporated herein by reference.

Mr. Hopf has purchased in the over-the-counter market American-style call options referencing an aggregate of 1,500 Shares, which have an exercise price of $12.50 and expire on January 16, 2026.

Other than as described herein, there are no contracts, arrangements, understandings or relationships among the Reporting Persons, or between the Reporting Persons and any other person, with respect to the securities of the Issuer.

Item 7.

Material to be Filed as Exhibits.

Item 7 is hereby amended to add the following exhibits:

99.1

December 2^nd Letter.

99.2

Joint Filing and Solicitation Agreement, dated December 2, 2024.

99.3

Powers of Attorney.

99.4

Form of Indemnification Agreement.

12

CUSIP No. 83125X103

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: December 2, 2024

STADIUM CAPITAL MANAGEMENT, LLC

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

STADIUM CAPITAL MANAGEMENT GP, L.P.

By:	Stadium Capital Management, LLC
	General Partner

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

STADIUM SPECIAL OPPORTUNITY I, L.P.

By:	Stadium Capital Management GP, L.P.
	General Partner

By:	Stadium Capital Management, LLC
	General Partner

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

STADIUM CAPITAL PARTNERS, L.P.

By:	Stadium Capital Management GP, L.P.
	General Partner

By:	Stadium Capital Management, LLC
	General Partner

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

/s/ Alexander M. Seaver

Alexander M. Seaver

Individually and as attorney-in-fact for Patrick A. Hopf

13

CUSIP No. 83125X103

SCHEDULE A

Transactions in the Securities of the Issuer During the Past 60 Days by Patrick A. Hopf

Nature of the Transaction	Amount of Securities Purchased / (Sold)	Price ($)	Date of Purchase / Sale
Purchase of Common Stock	10,000	$14.4700	11/25/2024
Purchase of Common Stock	10,000	$14.2800	11/25/2024
Purchase of Common Stock	10,000	$14.9400	11/25/2024
Purchase of Common Stock	5,000	$14.4800	11/25/2024
Purchase of January 2026 Call Options ($12.50 Strike Price)¹	15	$6.5000	11/25/2024
Purchase of Common Stock	10,000	$14.4400	11/26/2024

¹ Mr. Hopf purchased in the over-the-counter market American-style call options referencing an aggregate of 1,500 Shares, which have a strike price of $12.50 and an expiration date of January 16, 2026.

Exhibit 99.1

Stadium Capital Management Nominates Four Exceptionally Qualified Director Candidates to Sleep Number’s Board of Directors

Slate Includes Sleep Number’s Former Chairman and Interim CEO and Director Candidates with Significant Shareholdings, Capital Allocation and Product Innovation Expertise and Track Records Overseeing Value-Enhancing Turnarounds

Contends that its Director Candidates – Patrick A. Hopf, Jeffrey T. Jackson, Jessica M. Prager and Kevin Baker – Are Best Positioned to Identify Sleep Number’s Next CEO and Put the Company Back on the Path to Growth and Profitability

NEW CANAAN, Conn.--(BUSINESS WIRE)—Stadium Capital Management, LLC (together with certain of its affiliates, “Stadium Capital” or “we”) is the largest shareholder of Sleep Number Corporation (NASDAQ: SNBR) (“Sleep Number” or the “Company”), owning approximately 11.7% of the Company’s outstanding shares. Today, Stadium Capital issued the below letter to shareholders regarding its nomination of four highly qualified, independent candidates for election to the Company’s Board of Directors (the “Board”) at the 2025 Annual Meeting of Shareholders (the “Annual Meeting”).

***

December 2, 2024

Fellow Shareholders:

Stadium Capital is Sleep Number’s largest shareholder, holding approximately 11.7% of the Company’s outstanding shares. Last week, we expressed our grave concerns with Sleep Number’s financial underperformance, corporate governance and flawed CEO search process and made specific proposals to solve these pressing issues. Based on the conversations we had with many of you both before and after the publication of our letter, we are confident the majority of you share our frustrations. That is why it was so surprising to see the Board respond by vehemently defending its actions, instead of pursuing the path of private collaboration with its largest shareholder (as we have done with Sleep Number previously).

Today we are writing to inform you that we have nominated four exceptionally qualified directors with capital allocation, product innovation, business turnaround and unrivaled industry experience for election to Sleep Number’s Board at the upcoming Annual Meeting. We did not come to this decision lightly, as we strongly prefer private engagement with the management teams and boards of our portfolio companies on ideas for value creation and improved governance. In this case, our hand has been forced because Sleep Number’s Board is unwilling to work with its largest shareholder to add new directors to the boardroom to ensure an independent CEO search, and most concerningly, seems intent on continuing on its current perilous path. This was made particularly evident by the Board’s decision to reject our November 12^th and November 25^th proposals (seemingly without entertaining them whatsoever) that would have ensured a truly independent CEO search process. Concerningly, the Board’s obstinance is occurring in the face of investors embracing the prospect of change, with Sleep Number’s shares appreciating 20% since we highlighted the path to enhanced value in our letter last week.

1

Most troubling in the Board’s response, which failed to address any of our concerns, was its characterization of our request as “unusual” for direct participation in the CEO search – the most consequential decision facing the Company over the next decade. Under standard circumstances, we believe a willing and experienced owner who holds more stock than the entire Board by many multiples should have a seat at the table for such a momentous decision. In these specific circumstances, where the long-tenured directors directly involved in this critical decision have such abysmal track records of value destruction, it is especially vital. A thoughtful and open-minded Board should welcome the input of a diligent, patient and large owner who brings a valuable and differentiated perspective to this enormously consequential decision.

Unfortunately for this Board, the facts are starkly obvious: Sleep Number’s long-tenured directors (Shelly Ibach, Stephen Gulis, Brenda Lauderback, Michael Harrison and Barbara Matas, in particular) have failed all of us as fiduciaries. They have not only harmed but are now also insulting key constituents – the shareholders they are supposed to represent and the employees who are the heart and soul of the organization they govern – by wasting our money to protect their lucrative roles as directors for as long as possible. Their indefensible long-term record and recent self-serving actions make it overwhelmingly clear that they cannot be trusted with the important decisions that lie ahead.

To fix this broken situation, we have nominated four highly qualified individuals who have the necessary expertise and independence to address Sleep Number’s most pressing issues. Our nominees are:

Patrick A. Hopf

Mr. Hopf is the former Interim CEO and Chairman of Sleep Number and a successful private investor in consumer-oriented companies. He will bring a positive track record of value creation as well as strategic change and board development experience.

-

Proven Value Creator with Deep Knowledge of Sleep Number: At St. Paul Venture Capital – one of the ten largest venture capital firms in the U.S. at its peak – Mr. Hopf led the firm’s investment in Sleep Number (then called Select Comfort) in 1991 and later became the Company’s Interim CEO and Chairman. Mr. Hopf oversaw multiple turnarounds at Sleep Number and during his leadership, Sleep Number’s market value grew to over $1.4 billion. He started the direct response sales channel at Sleep Number, helped launch the retail channel and Roadshow channel, and was instrumental in establishing the internet channel in the late 1990s.

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Experience in Board Development and CEO Searches: Mr. Hopf has been on the boards of more than 30 private companies and was the Chairman of many of them, including Sleep Number, where he led three separate CEO searches for Sleep Number.

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Strong Alignment with Shareholders: Mr. Hopf has steadfastly represented shareholder interests as a public market investor, private investor, board member and operating manager for over 40 years. Mr. Hopf also has a significant personal investment in Sleep Number.

Jeffrey T. Jackson

Mr. Jackson is an experienced CEO and public company director with an outstanding record of value creation and extensive experience managing cyclical companies across market cycles, which will be particularly relevant for Sleep Number.

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Proven Value Creator: After Mr. Jackson was named CEO of PGT Innovations (“PGT”), the company’s shareholder returns annualized in the high-teens and PGT more than doubled EBITDA through organic growth and M&A activity.

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Extensive Experience Managing a Cyclical Business Across All Phases of Growth: Prior to ascending to the CEO role, Mr. Jackson also served as PGT’s CFO, where he helped guide the business through the housing boom, bust and subsequent recovery, including effectively managing its cost structure to successfully position the company to capitalize on value-enhancing opportunities when the market recovered.

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Experience Selling Products Through Multiple Distribution Channels: Mr. Jackson drove accretive growth across PGT’s portfolio of brands by selling its various products through company-owned retail stores, third-party retailers and independent dealers.

2

Jessica M. Prager

Ms. Prager has extensive experience building and scaling high-performing, culturally relevant brands. Her expertise in leveraging consumer data, driving product innovation and bridging digital and physical touchpoints will be particularly relevant in helping Sleep Number achieve its growth potential.

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Proven Value Creator: Ms. Prager is Senior Vice President of Product at Roman Health Ventures (“Ro”), where she was one of the company’s first 10 employees and has been instrumental in scaling the company, which is now valued at $7 billion. She has helped drive Ro’s significant growth and cement its position as a leader in the consumer healthcare technology space.

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Expertise in Leveraging Consumer Data and Insights to Drive Growth: Ms. Prager has a proven track record of using consumer data at scale and analyzing consumer insights to refine customer experiences and optimize growth marketing strategies. She has deep experience in demand generation, direct-response marketing strategies, brand building and optimizing ecommerce platforms from her roles at Ro, ClassPass, Bain & Company and PepsiCo.

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Track Record of Marrying Brand Vision with Consumer Experience: At ClassPass, Ms. Prager helped redefine how consumers access fitness and wellness, connecting digital discovery with physical participation. At Warby Parker, she supported the launch of the company’s first permanent physical retail store, creating an omnichannel model that set new industry standards. Across Ro, ClassPass and Warby Parker, she has demonstrated an ability to scale businesses while maintaining brand integrity and cultural relevance.

Kevin Baker

Mr. Baker is a Managing Partner at Stadium Capital, Sleep Number’s largest owner, and will bring a much-needed ownership perspective to Sleep Number’s boardroom.

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Shareholder Perspective with a Clear Understanding of Sleep Number’s Business: Exceptionally deep research and due diligence is a centerpiece of Stadium Capital’s patient investment strategy. As part of Stadium Capital’s investment team, Mr. Baker has led extensive due diligence spanning a decade on Sleep Number and the mattress industry. Mr. Baker will bring the largest shareholder’s perspective to the boardroom and be laser-focused on driving value for all shareholders.

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Capital Allocation and Financial Markets Expertise: Mr. Baker has 14 years of experience as an investor in public companies, with significant experience working directly with the leadership teams of Stadium Capital’s portfolio companies on value-enhancing capital allocation and capital structure decisions.

Our nominees’ highly effective and complementary skillsets will ensure that a refreshed, unbiased Board works constructively to identify the biggest causes of Sleep Number’s underperformance, uses those insights to identify the best CEO, and empowers and incentivizes Sleep Number’s next CEO to reignite the Company’s growth, profitability and market value. Most importantly, this refreshed Board will put Sleep Number’s owners’ interests above its own.

3

We continue to believe that it is in the best interest of all shareholders for Sleep Number to collaborate with us by pursuing the path we articulated in our November 25^th letter: work with us to refresh the Board, appoint an Executive Chairman and ensure a wholly independent CEO search process to identify the Company’s next leader. That is certainly the overwhelming message we have heard from fellow shareholders, and to be clear, that is our preferred outcome. However, if the Board continues down a self-serving path and unnecessarily squanders resources to defend those who are most responsible for the current calamity, then we will look forward to letting the owners decide the future of our Company at the Annual Meeting in spring 2025.

Sincerely,

The Stadium Capital Investment Team

***

About Stadium Capital

Stadium Capital Management, LLC seeks to apply a patient, private equity approach to public market investing, anchored by deep fundamental research. Since our strategy inception in 1997, we have invested in a concentrated portfolio of smaller-cap, public companies across North America and Europe with a long-term investment horizon and a focus on high-quality businesses with durable free cash flow. We have almost three decades of deep investment experience through multiple full market cycles, working closely and collaboratively with our portfolio companies. For more information, visit www.StadiumCapital.com.

CERTAIN INFORMATION CONCERNING THE PARTICIPANTS

Stadium Capital Partners, L.P. (“SCP”), together with the other participants named herein (collectively, “Stadium Capital”), intend to file a preliminary proxy statement and accompanying WHITE universal proxy card with the Securities and Exchange Commission (“SEC”) to be used to solicit votes for the election of Stadium Capital’s slate of highly-qualified director nominees at the 2025 annual meeting of shareholders of Sleep Number Corporation, a Minnesota corporation (the “Company”).

STADIUM CAPITAL STRONGLY ADVISES ALL SHAREHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS, INCLUDING A PROXY CARD, AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS' PROXY SOLICITOR.

The participants in the anticipated proxy solicitation are expected to be SCP, Stadium Special Opportunity I, L.P. (“SSO”), Stadium Capital Management GP, L.P. (“SCMGP”), Stadium Capital Management, LLC (“SCM”), Alexander M. Seaver, Kevin Baker, Patrick A. Hopf, Jeffrey T. Jackson and Jessica M. Prager.

4

As of the date hereof, SCP directly beneficially owns 2,215,000 shares of Common Stock, par value $0.01 per share (the “Common Stock”), of the Company. As of the date hereof, SSO directly beneficially owns 401,459 shares of Common Stock. SCMGP, as the general partner of SCP and SSO, may be deemed to beneficially own the 2,616,459 shares of Common Stock owned in the aggregate by SCP and SSO. SCM, as the investment advisor to SCP and SSO and as the general partner of SCMGP, may be deemed to beneficially own the 2,616,459 shares of Common Stock owned in the aggregate by SCP and SSO. Mr. Seaver, as the manager of SCM, may be deemed to beneficially own the 2,616,459 shares of Common Stock owned in the aggregate by SCP and SSO. As of the date hereof, Mr. Hopf directly beneficially owns 51,500 shares of Common Stock, which includes 1,500 shares of Common Stock underlying certain call options that are currently exercisable. As of the date hereof, Messrs. Baker and Jackson and Ms. Prager do not beneficially own any shares of Common Stock.

***

Contacts

Longacre Square Partners

Charlotte Kiaie / Bela Kirpalani, 646-386-0091

ckiaie@longacresquare.com / bkirpalani@longacresquare.com

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5

Exhibit 99.2

JOINT FILING AND SOLICITATION AGREEMENT

WHEREAS, certain of the undersigned are shareholders, direct or beneficial, of Sleep Number Corporation, a Minnesota corporation (the “Company”); and

WHEREAS, Stadium Capital Partners, L.P., Stadium Special Opportunity I, L.P., Stadium Capital Management GP, L.P., Stadium Capital Management, LLC and Alexander M. Seaver (collectively, “Stadium Capital”), and Kevin Baker, Jeffrey T. Jackson, Patrick A. Hopf and Jessica M. Prager (collectively, the “Nominees”) wish to form a group for the purpose of (i) seeking representation on the Board of Directors of the Company (the “Board”) at the 2025 annual meeting of shareholders of the Company (including any other meeting of shareholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof, the “Annual Meeting”), (ii) soliciting proxies for the election of certain persons nominated for election to the Board at the Annual Meeting (including those nominated by or on behalf of Stadium Capital), (iii) taking all other action necessary to achieve the foregoing and (iv) taking any other actions the Group (as defined below) determines to undertake in connection with their respective investment in the Company (collectively, the “Purposes”).

NOW, IT IS AGREED, this 2^nd day of December 2024 by the parties hereto:

1. In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), each of the undersigned (collectively, the “Group”) agrees to the joint filing on behalf of each of them of statements on Schedule 13D, and any amendments thereto, with respect to the securities of the Company to the extent required by applicable law. Each member of the Group shall be responsible for the accuracy and completeness of his, her or its own disclosure therein, and is not responsible for the accuracy and completeness of the information concerning the other members, unless such member knows or has reason to know that such information is inaccurate.

2. So long as this agreement is in effect, each of the Nominees agrees to provide Stadium Capital advance written notice prior to effecting any purchase, sale, acquisition or disposition of any securities of the Company which he or she has, or would have, direct or indirect beneficial ownership so that Stadium Capital has an opportunity to review the potential implications of any such transaction in the securities of the Company and pre-clear any such potential transaction in the securities of the Company by any of the Nominees. Each of the Nominees agrees that he or she shall not undertake or effect any purchase, sale, acquisition or disposition of any securities of the Company without the prior written consent of Stadium Capital. For purposes of this agreement, the term “beneficial ownership” shall have the meaning of such term set forth in Rule 13d-3 under the Exchange Act.

3. So long as this agreement is in effect, each of the undersigned shall provide written notice to Olshan Frome Wolosky LLP (“Olshan”) of any changes to his, her or its ownership of securities of the Company by 4:30 PM Eastern Time on the date of any such change in ownership of securities of the Company.

4. Each of the undersigned agrees to form the Group for the Purposes as set forth above.

5. Stadium Capital shall have the right to pre-approve all expenses incurred in connection with the Group’s activities and agrees to pay directly all such pre-approved expenses.

6. Each of the undersigned agrees that any filing with the Securities and Exchange Commission, press release or other communication proposed to be made or issued by the Group or any member of the Group in connection with the Group’s activities set forth in Section 4 shall be as directed by Stadium Capital.

7. The relationship of the parties hereto shall be limited to carrying on the business of the Group in accordance with the terms of this agreement. Such relationship shall be construed and deemed to be for the sole and limited purpose of carrying on such business as described herein. Nothing herein shall be construed to authorize any party to act as an agent for any other party, or to create a joint venture or partnership, or to constitute an indemnification. Except as provided in Section 2 and Section 3, nothing herein shall restrict any party’s right to purchase or sell securities of the Company, as he, she or it deems appropriate, in his, her or its sole discretion, provided that all such purchases and sales are made in compliance with all applicable securities laws and the provisions of this agreement.

8. This agreement may be executed in two or more counterparts, which together shall constitute a single agreement. Any signature to this agreement transmitted by facsimile transmission, by electronic mail in “portable document format” (“.pdf”) form or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document shall have the same effect as physical delivery of the paper document bearing the original signature.

9. This agreement is governed by and will be construed in accordance with the laws of the State of New York. In the event of any dispute arising out of the provisions of this agreement or their investment in the Company, the parties hereto consent and submit to the exclusive jurisdiction of the United States District Court for the Southern District of New York located in the Borough of Manhattan or the courts of the State of New York located in the County of New York.

10. The parties’ rights and obligations under this agreement (other than the rights and obligations set forth in Section 5 and Section 9, which shall survive any termination of this agreement) shall terminate upon the earlier to occur of (i) the certification of the results of the Annual Meeting or (ii) Stadium Capital providing written notice of termination to the other parties.

11. Each party hereby waives the application of any law, regulation, holding, or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

12. The terms and provisions of this agreement may not be modified, waived or amended without the written consent of each of the parties hereto.

13. Each party acknowledges that Olshan shall act as counsel for both the Group and Stadium Capital relating to their investment in the Company.

14. Each of the undersigned parties hereby agrees that this agreement shall be filed as an exhibit to a Schedule 13D pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act.

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed as of the day and year first above written.

STADIUM CAPITAL PARTNERS, L.P.

By:	Stadium Capital Management GP, L.P.
	General Partner

By:	Stadium Capital Management, LLC
	General Partner

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

STADIUM SPECIAL OPPORTUNITY I, L.P.

By:	Stadium Capital Management GP, L.P.
	General Partner

By:	Stadium Capital Management, LLC
	General Partner

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

STADIUM CAPITAL MANAGEMENT GP, L.P.

By:	Stadium Capital Management, LLC
	General Partner

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

STADIUM CAPITAL MANAGEMENT, LLC

By:	/s/ Alexander M. Seaver
	Name:	Alexander M. Seaver
	Title:	Manager

	/s/ Alexander M. Seaver
	Alexander M. Seaver

	/s/ Kevin Baker
	Kevin Baker

	/s/ Jeffrey T. Jackson
	Jeffrey T. Jackson

	/s/ Patrick A. Hopf
	Patrick A. Hopf

	/s/ Jessica M. Prager
	Jessica M. Prager

Exhibit 99.3

POWER OF ATTORNEY

Know all by these presents, that the undersigned hereby constitutes and appoints Alexander M. Seaver the undersigned’s true and lawful attorney-in-fact to take any and all action in connection with (i) the undersigned’s beneficial ownership of, or participation in a group with respect to, securities of Sleep Number Corporation, a Minnesota corporation (the “Company”), directly or indirectly beneficially owned by Stadium Capital Management, LLC or any of its affiliates or members of its Schedule 13D group (collectively, the “Stadium Group”) and (ii) any potential proxy solicitation that may be pursued by the Stadium Group to elect a slate of director nominees to the board of directors of the Company at the 2025 annual meeting of shareholders of the Company, including any adjournments or postponements thereof (the “Solicitation”). Such action shall include, but not be limited to:

1.if applicable, executing for and on behalf of the undersigned any Schedule 13D, and amendments thereto, filed by the Stadium Group that are required to be filed under Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules thereunder in connection with the undersigned’s beneficial ownership of, or participation in a group with respect to, securities of the Company or the Solicitation;

2.if applicable, executing for and on behalf of the undersigned all Forms 3, 4 and 5 required to be filed under Section 16(a) of the Exchange Act and the rules thereunder in connection with the undersigned’s beneficial ownership of, or participation in a group with respect to, securities of the Company or the Solicitation;

3.executing for and on behalf of the undersigned all Joint Filing and Solicitation Agreements or similar documents pursuant to which the undersigned shall agree to be a member of the Stadium Group;

4.performing any and all acts for and on behalf of the undersigned that may be necessary or desirable to complete and execute any such document, complete and execute any amendment or amendments thereto, and timely file such form with the United States Securities and Exchange Commission and any stock exchange or similar authority; and

5.taking any other action of any type whatsoever in connection with the Solicitation, including entering into any settlement agreement, that in the opinion of such attorney-in-fact, may be of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by such attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms and conditions as such attorney-in-fact may approve in such attorney-in-fact’s discretion.

The undersigned hereby grants to such attorney-in-fact full power and authority to do and perform any and every act and thing whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and confirming all that such attorney-in-fact, or such attorney-in-fact’s substitutes, shall lawfully do or cause to be done by virtue of this Power of Attorney and the rights and powers herein granted. The undersigned acknowledges that the foregoing attorney-in-fact, in serving in such capacity at the request of the undersigned, is not assuming any of the undersigned’s responsibilities to comply with Section 13(d), Section 16 or Section 14 of the Exchange Act.

This Power of Attorney shall remain in full force and effect until the undersigned is no longer a member of the Stadium Group unless earlier revoked by the undersigned in a signed writing delivered to the foregoing attorney-in-fact.

IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of this 2^nd day of December 2024.

	/s/ Kevin Baker
	KEVIN BAKER