Stadium Capital Management Amends Sleep Number Filing

TL;DR

Stadium Capital Management just updated their Sleep Number stake filing. Watch this space.

AI Summary

Stadium Capital Management, LLC has filed an amendment (No. 5) to its Schedule 13D for Sleep Number Corporation, dated December 2, 2024. The filing indicates a change in beneficial ownership of Sleep Number's common stock. Stadium Capital Management, LLC is based in New Canaan, CT.

Why It Matters

This filing signals a potential shift in the ownership structure or strategy of Sleep Number Corporation, which could impact its stock price and corporate governance.

Risk Assessment

Risk Level: medium — Changes in beneficial ownership filings can indicate activist investor activity or significant stake-building, which may lead to volatility.

Key Players & Entities

• Stadium Capital Management, LLC (company) — Filing entity
• Sleep Number Corporation (company) — Subject company
• Ryan Nebel Olshan Frome Wolosky LLP (company) — Legal counsel

FAQ

Key Financial Figures

• $0.01 — ame of Issuer) Common Stock, par value $0.01 per share (Title of Class of Securiti
• $56,352,966 — ed by Stadium Capital was approximately $56,352,966 (including brokerage commissions and tr
• $703,318 — d directly by Mr. Hopf is approximately $703,318, including brokerage commissions. The a
• $98 — ferencing 1,500 Shares is approximately $98, excluding brokerage commissions. Item
• $1.4 billion — ssuer’s market value grew to over $1.4 billion. He started the direct response sales c
• $7 billion — ing the company, which is now valued at $7 billion. She has helped drive Ro’s signif
• $12.50 — Shares, which have an exercise price of $12.50 and expire on January 16, 2026. Other
• $14.4700 — ale Purchase of Common Stock 10,000 $14.4700 11/25/2024 Purchase of Common Stock
• $14.2800 — 024 Purchase of Common Stock 10,000 $14.2800 11/25/2024 Purchase of Common Stock
• $14.9400 — 024 Purchase of Common Stock 10,000 $14.9400 11/25/2024 Purchase of Common Stock
• $14.4800 — 2024 Purchase of Common Stock 5,000 $14.4800 11/25/2024 Purchase of January 2026
• $6.5000 — ll Options ($12.50 Strike Price) 1 15 $6.5000 11/25/2024 Purchase of Common Stock
• $14.4400 — 024 Purchase of Common Stock 10,000 $14.4400 11/26/2024 1 Mr. Hopf purchased in

Filing Documents

• sc13da507785006_12022024.htm (SC 13D/A) — 207KB
• ex991to13da507785006_120224.htm (EX-99.1) — 27KB
• ex992to13da507785006_120224.htm (EX-99.2) — 32KB
• ex993to13da507785006_120224.htm (EX-99.3) — 21KB
• ex994to13da507785006_120224.htm (EX-99.4) — 16KB
• 0000921895-24-002858.txt ( ) — 304KB

Identity and Background

Item 2. Identity and Background .

is hereby amended

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

Source and Amount of Funds or Other Consideration

Item 3. Source and Amount of Funds or Other Consideration .

is hereby amended

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.

Purpose of Transaction

Item 4. Purpose of Transaction .

is hereby amended

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

Interest in Securities of the Issuer

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

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

Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer .

is hereby amended

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 cap

Material to be Filed as Exhibits

Item 7. Material to be Filed as Exhibits .

is hereby amended

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

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.