Sleep Number Code of Business Conduct

Sleep Number

Code of Business Conduct

June 2020

Sleep Number Team,

At the center of our company’s purpose is a commitment to improving lives.

For more than three decades, our mission has been fundamental to our

culture. Our values of integrity, passion, innovation, courage and teamwork

are our compass and guide the decisions we make every day.

People want to have relationships with brands and companies they trust.

Every day we need to earn the trust of our stakeholders. Acting with the

highest ethical standards earns this trust. Our customer satisfaction, best-in-

class team member engagement, safety and service excellence awards are

strong indications of these standards.

We are committed to the highest standards of ethical business practices

throughout our company. We expect all team members to act with integrity,

treat others with respect every single day and to conduct business in accordance with the standards set forth in

our Code of Business Conduct. Acknowledging adherence to the code and completing the annual mandatory

training supports an environment where we are all proud to work.

We have awakened society to the importance of sleep with our revolutionary Sleep Number 360

smart beds,

providing a solution to effortlessly achieve proven quality sleep. As a purpose driven company, we are improving

lives and making a positive impact on our customers, communities, team members, shareholders … and the

world we all share.

Thank you for your dedication to Sleep Number’s vision of becoming one of the world’s most beloved brands by

delivering unparalleled sleep experiences. And thank you for your commitment to demonstrating your integrity

in every interaction – I know you will continue using your good judgment, always doing what’s right, and showing

your respect and care for the well-being of one another and our customers.

Sleep well, be well,

Shelly Ibach

President and Chief Executive Ofﬁcer

Sleep Number

setting 40

Average SleepIQ

score 82

Table of Contents

What’s the right thing to do? ................................................................................................................................................ 5

• Right by Our Customers

• Right by the Company

• Right by Our Fellow Team Members and Business Partners

• Right by Our Shareholders

• Right by You

Right by Our Customers ........................................................................................................................................................ 6

Honesty in Our Communications – Marketing and Advertising Compliance ....................................................... 6

Fair Competitive Landscape – Compliance with Antitrust Laws ............................................................................. 6

Protecting Our Customers’ Privacy ..............................................................................................................................7

Applies in All Countries ................................................................................................................................................. 7

Right by the Company ........................................................................................................................................................... 8

Our Obligation to Comply with the Law ..................................................................................................................... 8

Conducting Business Internationally ........................................................................................................................... 9

Compliance with Governmental Investigations ......................................................................................................... 9

Integrity in Decision Making .......................................................................................................................................10

Avoiding Conﬂicts of Interest .............................................................................................................................10

Protecting Sleep Number Assets .......................................................................................................................11

Fair and Honest Relationships with Business Partners

(Including Restrictions on Gifts and Entertainment) ........................................................................................11

Table of Contents

Business, Travel and Entertainment Expenses ......................................................................................................... 13

Electronic Communications ........................................................................................................................................13

Protecting the Company’s Conﬁdential Information ..............................................................................................14

Political Activity and Contributions ............................................................................................................................15

Contacts with the News Media .................................................................................................................................. 16

Right by Our Fellow Team Members and Business Partners ........................................................................................17

No Discrimination or Harassment − Treating Everyone with Respect ..................................................................17

Maintaining a Healthy and Safe Work Environment ...............................................................................................18

Protecting Our Fellow Team Members’ Privacy .......................................................................................................18

Protecting Our Business Partners’ Conﬁdential Information .................................................................................18

Fair and Honest Relationships with Business Partners ............................................................................................19

Right by Our Shareholders ..................................................................................................................................................20

Integrity and Accuracy in Financial Reporting .........................................................................................................20

Compliance with Accounting and Internal Control Procedures ............................................................................20

Contract Review and Approval ..................................................................................................................................20

Cooperation with Audit Procedures ..........................................................................................................................21

No Exceptions ..............................................................................................................................................................21

Insider Trading .............................................................................................................................................................. 21

Right by You .......................................................................................................................................................................... 22

Your Obligation to Understand and Comply with the Code ................................................................................. 22

Reporting Possible Incidents of Noncompliance .................................................................................................... 22

Zero Tolerance for Retaliation ....................................................................................................................................23

Disciplinary Matters .....................................................................................................................................................24

Exceptions or Waivers .................................................................................................................................................24

Code of Business Conduct Certiﬁcation ..........................................................................................................................26

Sleep Number team members are employed at will. No policy or provision in this Code of Business Conduct (“Code”) is intended to create a

contract between Sleep Number and any team member, or to limit the rights of the company and its team members to end the employment

relationship at any time and for any lawful reason, with or without notice or cause. This Code is a general statement of policy, to be modiﬁed, applied

and interpreted by Sleep Number at its discretion. Sleep Number reserves the right to vary from any provision in this Code in its complete discretion.

This 2020 version of the Code replaces all previous versions of the Code.

Sleep Number Corporation (“Sleep Number” or the “Company,” which includes all of its subsidiaries) requires

strict adherence to the letter and the spirit of all laws applicable to the conduct of its business, and demands high

standards of integrity and sound ethical judgment from all team members, agents and representatives acting on

behalf of the Company. In other words, we all have a responsibility to do the right thing:

• Right by Our Customers

• Right by the Company

• Right by Our Fellow Team Members and Business Partners

• Right by Our Shareholders

• Right by You

We must rely on the individual judgment and diligence of each team member to maintain Sleep Number’s

standard of honesty and integrity—to do the right thing. Each of us is responsible for reading, understanding and

complying with this Code of Business Conduct. While the Code provides general guidance to help us do the right

thing, no set of guidelines can cover all situations. If you encounter a situation where interpretation of the Code

is unclear, or you have an ethical question or problem, the best course of action is to discuss it with someone.

Consult with your manager, a Human Resources representative, any member of senior management or the

Company’s Chief Legal and Risk Ofﬁcer. Anyone contacted with a request for assistance shall take every practical

and reasonable measure to ensure that the team member’s relationship with the Company shall not be adversely

affected as a result of the request.

Conﬁdential help is also available through the Company’s independently administered Business Abuse Hotline.

To use the Company’s Business Abuse Hotline, call 1-888-662-5025. It’s conﬁdential, toll-free and available 24 hours

a day. You may leave your name or remain anonymous.

You should also refer to your Team Member Handbook, which contains other Company policies that apply to your

conduct as a team member of the Company.

What’s the right thing to do?

Right by Our Customers

Honesty in Our Communications − Marketing and Advertising Compliance

It is unlawful to make false or misleading claims regarding the products and services offered by Sleep Number or

to make false or misleading statements regarding the products or services offered by our competitors. All claims

regarding Sleep Number’s products or services, or the products or services of our competitors, must be properly

substantiated in accordance with applicable guidelines established by the Federal Trade Commission or other

authorities of competent jurisdiction. All marketing and advertising materials must also conform to Sleep Number’s

style guide in order to assure that our intellectual property is properly used and protected, and to avoid the misuse

of any other party’s intellectual property. To ensure compliance with these guidelines, Sleep Number team members,

agents and representatives may only use, mail, circulate or publish marketing or advertising materials that have been

approved by the corporate Marketing Department.

The corporate Marketing Department must approve all discounts, contests, sweepstakes, give-aways, drawings and

other promotional offerings made available to our customers or related to our products or services. Local marketing

programs must conform to guidelines provided by the corporate Marketing Department. All team members, agents

and representatives must conduct and administer all such discounts, contests, sweepstakes, giveaways, drawings

and other promotional offerings strictly in compliance with the rules and guidelines established by the corporate

Marketing Department.

Fair Competitive Landscape – Compliance with Antitrust Laws

Sleep Number’s policy is to comply fully with U.S. federal and state antitrust laws and with the antitrust laws of other

countries. This policy applies to Sleep Number’s relations with its competitors and its relations with its distributors

and dealers carrying Sleep Number products. Sleep Number determines its marketing policies independent of its

competitors, distributors or dealers.

No Sleep Number team member shall enter into any understanding or agreement with any competitor concerning

or affecting prices or involving division of territories, allocation of customers or a boycott of any customer or supplier.

A Sleep Number team member shall not enter into an agreement to control the resale prices of any distributor or

dealer and shall comply with applicable antitrust laws concerning non-price relations with a distributor or dealer.

Sleep Number team members, agents and representatives shall strive to avoid any conduct that might even appear

to violate antitrust laws. No Sleep Number team member is authorized to permit the departure by any other team

member from Sleep Number’s policy of compliance with antitrust laws. Sleep Number team members, agents

and representatives should avoid discussions with competitors involving projected sales, revenues and expenses,

production schedules, inventories, unannounced products or services, pricing strategies, marketing plans or

proprietary Company information. These guidelines also apply to informal contact you may have with competitors,

including those at tradeshows or meetings of professional organizations.

The following are examples of possible violations of antitrust laws. If you encounter any situation involving such

matters, you must bring it to the attention of the Company’s Chief Legal and Risk Ofﬁcer:

• Agreements between competitors to set or ﬁx prices, allocate markets or customers, limit production or

quality, or boycott a customer or supplier; or

• Agreements with customers to control resale prices, require tie-in sales (requiring the purchase of one

product as a condition to selling another), require reciprocal dealings or restrict marketing territory.

Before engaging in any conduct that a team member believes may be subject to antitrust laws, the team member

shall seek the advice of the Company’s Chief Legal and Risk Ofﬁcer. Any Sleep Number team member having

reason to question whether the conduct of any other team member is in compliance with antitrust laws shall

promptly report the matter to the Company’s Chief Legal and Risk Ofﬁcer.

Protecting Our Customers’ Privacy

It is imperative that we maintain the conﬁdentiality of our customers’ conﬁdential or personally identiﬁable

information, including, without limitation, credit card information (credit/debit card numbers, expiration dates,

CVV/CVC2s or PINs), Social Security numbers, addresses and telephone numbers. Inadvertent disclosure of such

information could compromise the credit or privacy of our customers and could expose the Company to signiﬁcant

risk of ﬁnes, penalties or damages. Each of us has an obligation to take all reasonable precautions to avoid placing

this information at risk. If you believe, or reasonably suspect, that any of our customers’ conﬁdential information has

been compromised in any way, please contact the Legal Department immediately.

Applies in All Countries

Sleep Number conducts business internationally and the standards described above, or variations thereof, as

well as numerous other laws, will apply to our relationships with our customers in other countries. Please refer to

the following section under the heading Right by the Company − Conducting Business Internationally for more

information regarding our obligations to comply with foreign laws.

Our Obligation to Comply with the Law

It is Sleep Number’s policy to observe and comply with all laws, rules and regulations applicable to the conduct

of its business in all countries in which it operates and to require all Sleep Number team members, agents and

representatives to avoid any activities that could involve Sleep Number in any unlawful practice. The involvement

of Sleep Number team members, agents or representatives in, or the use of Sleep Number assets for any unlawful

purpose is strictly forbidden. In addition, Sleep Number is committed to the highest standards of business and

personal ethics, in order that Sleep Number and all of its team members, agents and representatives will rightfully

earn and enjoy the trust and respect of customers, suppliers, business partners, investors, the business community,

governmental and regulatory authorities, and the general public.

It is the personal responsibility of all Sleep Number team members, agents and representatives to:

• Acquaint themselves with the legal standards and restrictions applicable to their assigned duties and

responsibilities, and to conduct themselves accordingly;

• Follow the advice of the Company’s Chief Legal and Risk Ofﬁcer or outside counsel when to do otherwise

would lead to a violation of law or breach of our ethical standards; and

• Report suspected or apparent violations of laws or Company policies consistent with the direction provided

by this Code.

Sleep Number may, of course, exercise its lawful right to appropriately inform and advise legislators and regulatory

authorities of its views with respect to proposed legislation and rulemaking, and may contest in the courts what it

believes to be arbitrary or unreasonable regulations or legal interpretations. The responsible exercise of these rights

does not in any way compromise Sleep Number’s basic commitment to a policy of adherence to the law.

Right by the Company

Conducting Business Internationally

As a company conducting business internationally, our policy is to comply with all laws that apply in the countries

where we conduct business, including U.S. laws that apply in other countries. We must take special care to ensure

compliance with foreign laws, which may vary widely from U.S. laws. The following guidelines should assist you in

conducting business internationally:

• Foreign Corrupt Practices Act. The Foreign Corrupt Practices Act and other U.S. laws: (a) require the

Company and any foreign subsidiaries to maintain accurate and complete ﬁnancial books and records;

and (b) prohibit the payment of money or anything of value to a foreign ofﬁcial, foreign political party (or

ofﬁcial thereof) or any candidate for foreign political ofﬁce for purposes of obtaining, retaining or directing

business. Sleep Number team members, agents and representatives must abide by these laws, and must

immediately report any suspected violations or any suspected solicitation to violate these laws.

• Compliance with Export and Antiboycott Laws. Sleep Number team members must comply with all export

control and economic sanction laws. These laws prohibit or restrict business and ﬁnancial transactions with

certain countries, governments and private parties. All Sleep Number team members whose responsibilities

might involve knowledge of these laws are required to understand and comply with such laws. All team

members must also comply with laws that prohibit cooperation with organized foreign boycotts not

sanctioned by the United States. Accordingly, no Sleep Number team member may (1) refuse to do

business with boycotted countries, their nationals or blacklisted companies due to any such unsanctioned

boycott; or (2) furnish or enter into any agreement to furnish information about the race, religion, gender, or

national origin of any person or about business relationships with blacklisted companies.

• Payment for Goods or Services Outside the United States. Payments for goods or services provided to

Sleep Number outside the United States must be payable to the person or company legally entitled to

payment for the goods or services. No payment may be made to a party in a country other than the country

in which such party resides, maintains a place of business or has delivered the goods or provided the

services for which payment is made, except where it is clear that payment made in another country will not

violate any laws, such as local income tax or currency control laws, of the countries involved.

• Payment to Team Members Outside the United States. Sleep Number team members must comply with all

applicable tax and currency control laws of the countries of their principal employment. Team members who

reside outside of the United States, including U.S. team members who reside outside the United States,

should not be paid any portion of their salary or beneﬁts outside the country of their principal employment.

Compliance with Governmental Investigations

It is Sleep Number’s policy to cooperate with governmental authorities in their proper performance of inquiries or

investigations. However, it is important that all such matters be properly coordinated within the Company. Since

government investigations are normally conducted in the context of some applicable law, any team member who

is contacted by a government ofﬁcial as part of an inquiry or investigation should immediately notify the Company’s

Chief Legal and Risk Ofﬁcer. In the event of an investigation, all requests, either oral or written, for access to

Sleep Number ﬁles or for other information should be referred immediately to the Company’s Chief Legal and

Risk Ofﬁcer. If a government ofﬁcial attempts to serve a subpoena, contact the Company’s Chief Legal and Risk

Ofﬁcer immediately.

Integrity in Decision Making

Avoiding Conﬂicts of Interest

Sleep Number team members must avoid situations where their personal interests could create a conﬂict, or create

the appearance of a conﬂict, with the interests of the Company. In situations where a conﬂict of interest may arise,

the team member should bring the matter to the attention of his or her manager, who should implement a process

to ensure that the team member is removed from the decision making process or that the conﬂict of interest is

otherwise removed. An example of conﬂict of interest is any opportunity for personal gain apart from the normal

compensation provided through employment. In that regard, here are some guidelines:

• Personal Financial Gain. Sleep Number team members should avoid any outside ﬁnancial interest that

might inﬂuence their corporate decisions or actions. Such interests might include, among other things:

• A personal interest, or that of a family or household member, in an enterprise that has a business

relationship with the Company. (This restriction does not apply to immaterial holdings of stock or other

securities of a corporation whose shares are publicly traded, and which may incidentally do business

with the Company.)

• An investment in another business that competes with the Company.

• Soliciting or accepting money, gifts or any other form of compensation from any supplier to represent

their interests at Sleep Number.

• Acting as a supplier or subcontractor to Sleep Number in your own right, or through a company in

which you are (or a family member is) an owner or have control.

• Outside Activities. Sleep Number team members should avoid outside employment or activities that would

have a negative impact on the performance of their job, or conﬂict with their obligations to the Company,

or in any way negatively impact the Company’s business or reputation in the community. No employment

outside of Sleep Number should be undertaken if it will or is likely to create a conﬂict of interest.

• Use of Company Funds and Assets. Company assets are to be used solely for the beneﬁt of the Company.

Team members are responsible for ensuring that corporate assets are used only for valid corporate

purposes. Company assets are much more than our equipment, inventory, corporate funds, or ofﬁce

supplies. They include concepts, business strategies and plans, ﬁnancial data, intellectual property rights

and other information about our business. These assets may not be improperly used to provide personal

gain for any Sleep Number team member or others. No Sleep Number team member may transfer any

Company assets to other persons or entities, except in the ordinary course of business. On occasion, some

assets of the Company no longer needed in the business may be sold to team members. Such sales must

be supported by properly approved documentation signed by an appropriate Company authority other

than the team member.

If you encounter circumstances that may result in a conﬂict, or an appearance of a conﬂict, between your personal

interests and the interests of the Company, or that may compromise in any way your obligations to the Company,

you should consult with the Company’s Chief Legal and Risk Ofﬁcer. Only the Company’s Chief Legal and Risk Ofﬁcer

may approve any exceptions to this conﬂicts of interest policy.

Protecting Sleep Number Assets

All Sleep Number team members have an obligation to protect the assets and property of the company including its

products, return products, intellectual property, strategic plans, unpublished ﬁnancial data, conﬁdential information,

as well as physical assets such as equipment, supplies, technology assets and ofﬁce facilities. Theft, fraud or waste of

Sleep Number assets is inconsistent with the guiding principle of this Code requiring that all team members act in the

best interests of the organization and simply Do the Right Thing. Doing the right thing includes following through on

the obligation that every team member has to report any suspected theft, fraud or waste of Sleep Number assets.

Fair and Honest Relationships with Business Partners (Including Restrictions on Gifts and Entertainment)

Our business prospers because of the quality and value of our products and services, and the respect and conﬁdence

we instill in our customers. Conducting business with suppliers and customers can pose ethical or even legal

problems. Our objective is to ensure that all decisions with respect to our business partners are based solely on the

business merits and best interests of the Company, and that we do not create even the appearance of improper

inﬂuence or conﬂict of interest. The following guidelines are intended to help all team members make the right

decisions in potentially difﬁcult situations. If you have any questions regarding the application of the guidelines

provided below, please contact the Company’s Chief Legal and Risk Ofﬁcer for advice and clariﬁcation.

• Kickbacks and Rebates. Purchase or sales of goods and services must not lead to team members or their

families receiving personal “kickbacks” or rebates. Kickbacks or rebates can take many forms and are not

limited to direct cash payments or credits. In general, if you or your family stands to gain personally through

the transaction, it is prohibited. Such practices are not only unethical but are in many cases illegal.

• Reciprocity. In many instances, Sleep Number purchases goods or services from a supplier who also buys

goods or services from us. This practice is normal and acceptable, but any form of pressure for reciprocity

with that supplier is not. Suppliers must not be asked to buy our products or services in order to become or

continue to be a supplier to Sleep Number.

• Gifts or Gratuities. During the course of business, team members may be offered gifts or gratuities from

individuals or businesses that have, or wish to develop, a relationship with Sleep Number. Team members

are expected to use their best judgment and be guided by a sense of reasonableness in accepting

customary gifts of modest value only.

• A team member who is currently participating in the selection of a supplier or business partner for the

purchase of goods or services, and the supervisor of such a team member, may not accept or solicit

gifts or gratuities of any kind from any of the potential suppliers or business partners for their personal

beneﬁt. This provision does not prohibit team members from soliciting donations for legitimate

company-sponsored charitable purposes. Any activity that occurs within three months (before or after)

any evaluation or renewal of a supplier or business partner relationship should be considered covered

under this policy.

• A team member who is not currently participating in the selection of a supplier or business partner for

the purchase of goods or services, and the supervisor of such a team member, may accept unsolicited,

non-monetary gifts from a business ﬁrm or individual that has an established business relationship

with the Company only if the gift is of nominal value (less than $200), or primarily of an advertising

or promotional nature, and is customarily offered to others having a business relationship with the

business ﬁrm or individual. Examples of acceptable items would include holiday gift baskets, logo

apparel and the like.

• Under no circumstances may any team member solicit or accept any gift of money, nor may any team

member solicit non-monetary gifts, gratuities, or any other personal beneﬁt or favor of any kind from

any current or potential supplier or customer.

• Any offer or receipt of any gift or gratuity that would violate the foregoing standards must be reported

immediately to your manager and the Company’s Chief Legal and Risk Ofﬁcer or another member of

senior management. Arrangements will be made to return (or to donate to a worthy charity) anything

that has been received in violation of these standards, and the offeror or sender will be reminded of

Sleep Number’s gift policies.

• Gift giving on behalf of Sleep Number should be done in a transparent and professional manner and

should never be used to induce a favor or unduly inﬂuence a business relationship. As with the receipt

of gifts, a gift given on behalf of the Company must be modest, reasonable and customary under the

circumstances and must avoid even the appearance of impropriety. A gift that is modest or nominal is

one that is generally less than $200 in value.

• Entertainment.

• A team member who is currently participating in the selection of a supplier or business partner for the

purchase of goods or services, and the supervisor of such a team member, may not accept or solicit

entertainment of any kind from any of the potential suppliers or business partners. Any activity that

occurs within three months (before or after) any evaluation or renewal of a supplier or business partner

relationship should be considered covered under this policy.

• Team members may not encourage or solicit entertainment from any business ﬁrm or individual. From

time to time, team members may offer entertainment to, or accept unsolicited entertainment from, a

business ﬁrm or individual that has an established business relationship with the Company, but only

if the entertainment is reasonable, occurs infrequently, is consistent with Sleep Number’s Travel and

Entertainment Policy (to the extent applicable), is customarily offered to others having a business

relationship with the business ﬁrm or individual offering the entertainment, and generally does not

involve expenditures in excess of $500 per person.

• Team members may not accept travel or travel expenses from a supplier, business partner or customer

for any trip that does not have a clear, legitimate business purpose. A supplier, business partner or

customer may only cover travel expenses for our team members when the travel is required for business

purposes. When a trip that is required for business purposes also includes non-business activity, the

travel costs may not be covered by a supplier, business partner or customer unless at least 50% of the

trip’s activities have a legitimate business purpose. Generally, the term business purpose does not

include entertainment, networking and similar activities.

• Offering or accepting entertainment that is not a reasonable adjunct to a business relationship, but is

primarily intended to gain favor or inﬂuence, is prohibited.

• Any offer of travel or entertainment that would violate the foregoing standards must be reported

immediately to your manager and the Company’s Chief Legal and Risk Ofﬁcer or another member of

senior management. The offeror will be reminded of Sleep Number’s travel and entertainment policies.

Business, Travel and Entertainment Expenses

Sleep Number reimburses team members for authorized expenditures incurred in the conduct of Company

business. To qualify for reimbursement, these expenses must be:

• Reasonable, ordinary and necessary;

• Related to a legal business purpose of the Company;

• Ethical in nature and amount; and

• In no way compromise Sleep Number’s integrity or the integrity of any other entity or individual.

In addition, to qualify for reimbursement, business travel and entertainment expenses must be submitted in a timely

manner and in conformity with the Company’s requirements for documentation.

Further details regarding Sleep Number’s policies and requirements related to reimbursement of business travel and

entertainment expenses are set forth on the Travel page of the Company intranet site.

Electronic Communications

Sleep Number provides a wide variety of electronic communications resources for use by our team members,

including telephones, cell phones, tablets, computers, computer networks, email and voicemail systems, and access

to the Internet and intranet. Intelligent use of these tools can signiﬁcantly enhance the productivity and effectiveness

of our team members and our entire organization. Improper use of these tools can waste time and resources,

threaten the integrity of our databases and technology resources, damage our corporate reputation and expose the

Company to legal risk.

Electronic communications tools provided by Sleep Number for use by team members remain the property of

Sleep Number. These resources should be used only for conducting authorized Sleep Number business. Data

and information created, sent, received or stored on these tools belongs to the Company. Occasional and incidental

personal use of these tools is permitted, but the data and information transmitted or stored for personal use will be

treated the same as business-related data and information.

Sleep Number’s electronic communications systems and resources contain conﬁdential and proprietary information

of the Company. It is imperative that all team members preserve the integrity of passwords and do not share

network accounts. Each authorized user is responsible for the security and protection of his or her passwords and

network accounts. Sleep Number team members who have greater access to the Company’s systems because of

the nature of their job have a heightened obligation to refrain from improper use or disclosure of Sleep Number’s

conﬁdential information as well as the personal data related to customers or team members.

Sleep Number reserves the right to monitor access or search any of the Company’s electronic communications

technology at any time and for any lawful purpose. Users of the Company’s electronic communications resources

should have no expectation of privacy with respect to any information or data created, sent, received, or stored on

or through these tools.

Further details regarding Sleep Number’s policies and requirements related to use of the Company’s electronic

communications resources are set forth on the Technology Resource page and of the Team Member Handbook

available electronically on The Wink, on the Retail Portal and Guru.

Protecting the Company’s Conﬁdential Information

Prior to commencement of employment with Sleep Number, all team members are required to enter into

Sleep Number’s approved form of team member conﬁdentiality agreement. These agreements require all team

members to strictly safeguard, and to avoid any unauthorized disclosure of, Sleep Number’s trade secrets and other

proprietary or conﬁdential information. Further obligations and guidance related to protection of the Company’s

conﬁdential information are set forth in Sleep Number’s Team Member Handbook.

With respect to Sleep Number’s trade secrets and other proprietary or conﬁdential information, our guidelines are:

• Any proprietary or conﬁdential information to which team members, agents and representatives have

access must only be discussed with other team members, agents and representatives who have a need to

know such information to fulﬁll their duties for the Company.

• Any disclosure of proprietary or conﬁdential information to any outside person or entity must only be done

under and in conformity with a conﬁdentiality or non-disclosure agreement that has been approved by the

Legal Department.

• All team members, agents and representatives must be alert to inadvertent disclosures that may arise in

either social conversations or in normal business relations with our suppliers, customers and other

business partners.

Conﬁdential or proprietary information includes any information which is not generally known or disclosed and

which is useful or helpful to Sleep Number and/or which would be useful or helpful to competitors. Common

examples include such things as ﬁnancial data, sales ﬁgures for individual projects or groups of projects, planned new

projects or planned advertising programs, plans for geographical or product line expansion, lists of suppliers, lists of

customers, wage and salary data, capital investment plans, projected sales or earnings, changes in management or

policies of the Company, testing data, manufacturing methods, suppliers’ prices to us, or any plans we may have for

improving any of our products.

Conﬁdential or personally identiﬁable information also includes sensitive information relative to our customers and

team members, including, without limitation, credit/debit card information (such as Primary Account Numbers,

expiration dates, PINs, CVC2/CVVs or cardholder names), Social Security numbers, addresses and telephone

numbers. Inadvertent disclosure of such information could compromise the credit or privacy of our customers or

team members and could expose the Company to signiﬁcant risk of ﬁnes, penalties or damages. Each of us has an

obligation to take all reasonable precautions to avoid placing this information at risk. Under no circumstances should

sensitive information be stored on a laptop or other portable device, including within emails or email attachments.

You must never send any credit card information via email. If there is a legitimate business reason to store sensitive

information on a laptop or portable device, you must contact the Information Technology Department to install

encryption software to protect the sensitive information. Please make sure that your desktop or laptop computer

does not include such information except as required to perform your duties.

Team members are prohibited from participating in surveys, quizzes, focus groups, speaking opportunities, or other

information sharing sessions (the “survey”) that seek the disclosure of information that the team member only knows

due to their role with Sleep Number, including what may seem to be basic information about the team member’s job

or department functions, unless either: (1) the survey originates from a reputable, trusted source engaged by

Sleep Number to solicit participation in the survey by Sleep Number team members; or (2)(a) the survey originates

from a reputable, trusted source; and (b) that in the reasonable judgment of a Director-level team member or above,

Sleep Number will receive commercially relevant and otherwise unavailable information in exchange for participation

in the survey; and (c) any information disclosed will be conﬁdential or anonymized, as appropriate; and (d) no team

member will receive any personal incentive for their individual participation.

Team members participating in speaking opportunities involving outside persons or entities who are not subject to

a conﬁdentiality or non-disclosure agreement with Sleep Number must avoid sharing any conﬁdential or proprietary

information during their speaking engagements. Prior to any such speaking engagements, team members must also

contact Public Relations at publicrelations@sleepnumber.com to conﬁrm the content of the presentation is consistent

with Sleep Number’s messaging.

If you have any doubt or question regarding whether any information is proprietary or conﬁdential, you must presume

that it is to be maintained as conﬁdential, and you should consult with a Director-level team member or above in

your organizational reporting structure or the Company’s Chief Legal and Risk Ofﬁcer to seek clariﬁcation of

your obligations.

Political Activity and Contributions

Federal laws restrict the use of corporate funds in connection with federal elections, and there are similar laws in many

states. Accordingly, it is against Company policy, and may also be illegal, for team members to:

• Include, directly or indirectly, any political contribution that you may desire to make on your expense

account or otherwise seek reimbursement from the Company for any such contributions. In general, the

costs of fund-raising tickets for political functions are considered political contributions. Therefore, including

the cost of any such fund-raising dinner on an expense account, even if business is discussed, is against

Company policy and possibly illegal.

• Use any Company property or facilities, or time during Company working hours of any Company team

member, for any political activity. Examples of prohibited conduct include using Company personnel to

send invitations for political fund-raising events, using the Company’s telephones or other equipment

to make politically motivated solicitations, allowing any candidate to use any Company facilities, such as

meeting rooms, for political campaign purposes, or to loan any Company property to anyone for use in

connection with a political campaign.

The political process has become highly regulated, and anyone who has any question about what is or is not

proper should consult with the Company’s Chief Legal and Risk Ofﬁcer before agreeing to do anything that could

be construed as involving the Company in any political activity at either the federal, state or local level, or in any

foreign country.

Contacts with the News Media

As a publicly traded company, Sleep Number has an obligation to implement reasonable measures designed to

ensure that accurate and timely information is disseminated to the public consistent with federal and state securities

laws and Sleep Number’s policies regarding the disclosure of proprietary and conﬁdential information. As a result,

it is Sleep Number’s policy that all media contacts shall be coordinated through, and shall have the approval of, the

Company’s public relations specialists. Failure to observe this policy could result in the inadvertent release of false

or misleading information, or the failure to broadly disseminate fair and accurate information to all, which in either

case can cause serious damage to Sleep Number. It is also Sleep Number’s policy not to respond to or comment on

rumors, as responding to one rumor may obligate the Company to respond to other rumors or to update previous

comments if circumstances have changed.

Please direct all inquiries from the news media to the Public Relations Team or to the Company’s Chief Legal

and Risk Ofﬁcer.

No Discrimination or Harassment − Treating Everyone with Respect

Our corporate and cultural values at Sleep Number promote trust and respect for all individuals and doing the right

thing for our customers and our Company. Consistent with these values, we are committed to treating all of our

team members and guests in a lawful, nondiscriminatory manner, and to maintaining a work environment that is

based upon and fosters mutual respect for the personal dignity of all of our team members and guests.

Sleep Number prohibits, and will take timely and appropriate action in response to, unlawful discrimination or

harassment on the basis of race, creed, color, national origin, gender, sexual orientation, gender identity and/or

expression, genetic information, ancestry, military or veteran status, status with regard to public assistance, religion,

age, disability or other applicable protected class status. Any such discrimination or harassment will not be tolerated.

It is a violation of this policy for any team member or any other individual that may be in our work environment

to engage in any such unlawful discrimination or harassment against any team member of Sleep Number or any

supplier, partner, customer or other invitee of Sleep Number. Any team member determined to have violated this

policy will be subject to appropriate disciplinary or other action, which may include termination of employment.

If you have observed or experienced unacceptable harassing conduct, you must follow these procedures:

FIRST: If comfortable in doing so, tell the offender to stop. Then, immediately go to next step below.

SECOND: Immediately report the conduct to your supervisor, department head or Human Resources.

In your report, it is important that you be as precise and speciﬁc as reasonably possible regarding

dates, times, places, individuals, conduct observed, other individuals present and similar details in

order to enable a fair and thorough investigation of the reported conduct. Once we learn of the

conduct which you have reported, Sleep Number will investigate, and take timely and appropriate

responsive action.

THIRD: If your report relates to conduct of your supervisor or department head, you must immediately notify

Human Resources or the Company’s Chief Legal and Risk Ofﬁcer.

FOURTH: If you for any reason feel uncomfortable objecting to or reporting unacceptable conduct to your

supervisor, immediately notify Human Resources or the Company’s Chief Legal and Risk Ofﬁcer

regarding your concern.

FIFTH: Immediately report any subsequent objectionable conduct or retaliation of any type in accordance

with these procedures.

Further detail regarding Sleep Number’s policies with respect to discrimination, harassment, and equal employment

opportunity are set forth in the Team Member Handbook which is available electronically on The Wink, the Retail

Portal and Guru.

Right by Our Fellow Team Members and Business Partners

Maintaining a Healthy and Safe Work Environment

Sleep Number strives to provide a safe and healthy workplace for our team members and for visitors to our

premises. In furtherance of this commitment, Sleep Number has adopted Standards of Conduct that govern all of

us while acting in the course of our employment. These Standards of Conduct are set forth in the Team Member

Handbook which is available electronically on The Wink, the Retail Portal and Guru. All team members have a

responsibility to fully understand and comply with these Standards of Conduct. All team members also have a

responsibility to promptly report any behavior that violates our Standards of Conduct or that may create any kind of

unsafe or hostile work environment. Failure to do so may result in disciplinary action, up to and including termination

of employment.

We each have a responsibility to abide by safe operating procedures, and to guard our own and our fellow team

members’ health and safety. In the United States, regulatory agencies exist under federal, state or local jurisdictions

to insure compliance with laws and regulations affecting safety, health and environmental protection. It is Sleep

Number’s policy to comply with both the letter and the spirit of the laws and regulations imposed by these agencies,

and to exhibit a cooperative attitude with inspection and enforcement personnel from the agencies. In keeping with

this spirit, team members should report to their supervisor any conditions that they perceive to be unsafe, unhealthy

or hazardous to the environment. Sleep Number’s safety philosophy and guiding principles are set forth in the

company’s AWAIR policy.

Protecting Our Fellow Team Members’ Privacy

It is imperative that we maintain the security of our fellow team members’ conﬁdential information, including,

without limitation, credit card information, Social Security numbers, addresses and telephone numbers. Inadvertent

disclosure of such information could compromise the credit or privacy of our fellow team members and could

expose the Company to signiﬁcant risk of ﬁnes, penalties or damages. Each of us has an obligation to take all

reasonable precautions to avoid placing this information at risk. If you believe that any of our fellow team members’

conﬁdential information has been compromised in any way, please contact the Company’s Chief Legal and Risk

Ofﬁcer immediately.

Protecting Our Business Partners’ Conﬁdential Information

Sleep Number sometimes will receive proprietary or conﬁdential information of other companies for valid business

purposes. When Sleep Number properly receives such proprietary information, there should always be a written

non-disclosure agreement that deﬁnes Sleep Number’s obligations for the use and protection of the information.

The Company’s Legal Department should review any such agreement before it is signed. Once the information

is entrusted to Sleep Number, team members must protect its conﬁdentiality and limit its use to that which is

authorized by the agreement. Sleep Number team members are also responsible for making sure that only

authorized team members, agents and representatives have access to the information.

Sleep Number team members have an obligation not to misuse or misappropriate the intellectual property of any

customer, supplier, business partner, competitor or other company. Sleep Number periodically receives information

about competitors or other companies, which may assist Sleep Number in marketing or other legitimate business

activities. This is acceptable when the information comes from proper sources, which generally means information

that is published or in the public domain, that is independently developed, or that is lawfully received from the

owner or a third party. Team members may not, however, engage in industrial espionage or acquire information

about other companies through improper means. Improper behavior includes persuading present or former

team members of another company to divulge conﬁdential information in breach of a contractual or legal duty,

or receiving information that was illegally or improperly acquired by another party. If you come into possession of

information from another company that has proprietary markings or that you believe may be proprietary, you must

determine if Sleep Number is authorized to have it. If you are not sure, contact the Company’s Chief Legal and

Risk Ofﬁcer.

Sleep Number licenses the use of computer software from a variety of outside companies and prohibits the

unauthorized duplication and use of copyrighted, licensed software. Licensed software may only be used and

duplicated consistent with the terms of our license agreement with the software licensor. Generally, copies may

be made only to provide necessary backup. Illegal reproduction of software may result in civil damages and

criminal penalties.

Team members, agents and representatives learning of any potential misuse or misappropriation of any other party’s

proprietary or conﬁdential information must immediately notify the Company’s Chief Legal and Risk Ofﬁcer of the

speciﬁc facts within their knowledge.

Fair and Honest Relationships with Business Partners

Our business prospers because of the quality and value of our products and services, and the respect and

conﬁdence we instill in our customers. Conducting business with suppliers and customers can pose ethical or even

legal problems. Our objective is to ensure that all decisions with respect to our business partners are based solely on

the business merits and best interests of the Company, and that we do not create even the appearance of improper

inﬂuence or conﬂict of interest. The guidelines set forth above under the heading Right by the Company − Integrity

in Decision Making − Fair and Honest Relationships with Business Partners (Including Restrictions on Gifts and

Entertainment) are intended to help all team members make the right decisions in potentially difﬁcult situations. If

you have any questions regarding the application of those guidelines, please contact the Company’s Chief Legal

and Risk Ofﬁcer for advice and clariﬁcation.

Integrity and Accuracy in Financial Reporting

Accuracy and reliability in the preparation of all business and accounting records is required by law and is of critical

importance to the corporate decision-making process and to the proper discharge of Sleep Number’s legal, ﬁnancial

and reporting obligations. All ﬁnancial and accounting books and records must be maintained in accordance with

generally accepted accounting principles and in accordance with all local, state and national laws governing the

maintenance of corporate books and records.

All business records, tax records, expense accounts, payroll records, service records, reports to government

agencies, and other reports, books and records of Sleep Number must be prepared with care and honesty. All

corporate funds and assets must be properly acquired, recorded, preserved and managed in accordance with

applicable corporate procedures. Intentionally false or misleading entries in any such records are unlawful and are

not permitted. All such records are to be maintained in accordance with the Company’s records retention policies

and procedures, which can be found in the Legal Department’s section of the Company’s intranet.

Compliance with Accounting and Internal Control Procedures

Compliance with accounting procedures and internal control procedures is required at all times. All team members,

agents and representatives must ensure that both the letter and the spirit of corporate accounting and internal

control procedures are strictly adhered to at all times. Team members should advise their manager, any manager

or ofﬁcer in the Finance Department or Internal Audit Department, any member of senior management, or the

Company’s Chief Legal and Risk Ofﬁcer of any shortcomings they observe in any such procedures.

Contract Review and Approval

Sleep Number has established mandatory standards for review and approval of contracts entered into by the

Company which may include review by the Legal, Strategic Sourcing and Finance departments before the

execution of a contract on behalf of the Company. In addition, the Company has designated certain ofﬁcers who

are authorized to bind the Company to contractual commitments and obligations at different levels. For complete

Right by Our Shareholders

descriptions of the policies and procedures for contract review and approval and signature authority, please see the

Legal Department’s section of the Company’s intranet.

Cooperation with Audit Procedures

The Company is required by law and by various contractual commitments to have its ﬁnancial statements audited

by independent certiﬁed public accountants. In addition, Sleep Number maintains an active internal audit program.

All team members are required to fully cooperate with all external and internal audit procedures, and to fully

comply with all requests of our external and internal auditors. If you have any questions related to cooperation or

compliance with any external or internal audit request, please bring them to the attention of the Company’s Chief

Financial Ofﬁcer or the Company’s Chief Legal and Risk Ofﬁcer.

No Exceptions

No ofﬁcer or team member, whatever his or her position, is authorized to depart from Sleep Number’s policies

regarding integrity of records, compliance with accounting and internal control procedures, and cooperation with

audit procedures, or to condone a departure therefrom by anyone else. Any violation of these policies may be

grounds for disciplinary action.

Insider Trading

Generally, it is unlawful for any person to buy or sell any stock of any publicly traded company while in possession

of material, nonpublic information concerning the company. Sleep Number therefore maintains a policy that no

Sleep Number team member, members of the Company’s Board of Directors, or their respective family members or

entities under their inﬂuence or control, may:

• Buy or sell any stock or other securities of Sleep Number at any time while in possession of material,

nonpublic information about Sleep Number.

• Buy or sell any securities of any other entity while in possession of material, nonpublic information about

the other entity obtained through Sleep Number (such as information regarding purchases or sales

of businesses or information obtained during the negotiation or implementation of contracts or other

transactions with any such other entity).

• Disclose any such material, nonpublic information to any person outside of Sleep Number (including

immediate family members) unless the Company’s Chief Legal and Risk Ofﬁcer authorize the disclosure

in writing.

In addition to the general prohibition against trading in securities of Sleep Number or any other entity while in

possession of material, nonpublic information, members of the Company’s Board of Directors, ofﬁcers, director-

level and above team members and other team members designated by Sleep Number from time to time whose

duties regularly bring them into contact with conﬁdential or proprietary information (“insiders”) should only buy

or sell securities of Sleep Number within open trading windows as speciﬁed in the Company’s insider trading

policy set forth in Sleep Number’s Team Member Handbook. In addition, Sleep Number insiders are prohibited

from pledging shares of the Company’s stock or from engaging in any form of hedging transactions involving the

Company’s stock. In order to ensure compliance with these requirements, any insider of Sleep Number is required to

notify the Company’s Chief Legal and Risk Ofﬁcer and obtain written approval prior to engaging in any transaction

involving the purchase or sale of Sleep Number’s securities.

Your Obligation to Understand and Comply with the Code

You are expected to understand and comply with this Code of Business Conduct.

The best course of action when you have an ethical question or problem is to discuss it with someone. Consult your

manager, a Human Resources representative, any member of senior management or the Company’s Chief Legal

and Risk Ofﬁcer when you need assistance. Anyone contacted with a request for assistance shall take every practical

and reasonable measure to ensure that the team member’s relationship with the Company shall not be adversely

affected as a result of the request.

Conﬁdential help is also available through the Company’s independently administered Business Abuse Hotline. To

use the Company’s Business Abuse Hotline, call 1-888-662-5025. It’s conﬁdential, toll-free and available 24 hours a

day. You may leave your name or remain anonymous.

Reporting Possible Incidents of Noncompliance

(a) General Reporting of Incidents of Noncompliance

We all share a responsibility to safeguard the Company’s interests and to protect the Company’s reputation. It

is your responsibility to report any suspected violations of this Code to your supervisor, to a Human Resources

representative, to any member of senior management, to the Company’s Chief Legal and Risk Ofﬁcer or through

the use of the Company’s conﬁdential Business Abuse Hotline. Any such reports should include the speciﬁc facts,

including the dates, times, places, people involved and conduct observed, to the extent known, in order to facilitate

a full and fair investigation.

Right by You

(b) Payroll, Time and Compensation Records

You also have an obligation to partner with the Company to ensure that you are fully paid for all of your work. This

includes the requirement that the time records you submit must be an accurate reﬂection of actual hours worked for

each pay period. If you have any concern regarding your compensation you must report the issue in a timely manner

to a Human Resources representative, to any member of senior management, to the Company’s Chief Legal and

Risk Ofﬁcer or by calling the Company’s conﬁdential Business Abuse Hotline at 1-888-662-5025.

All managers are also responsible for ensuring that the time and attendance records for the team members who

report to them accurately reﬂect the time the team members actually worked. All team members are required to use

the Company’s time-reporting systems as the ofﬁcial record of time worked.

If you have questions or concerns regarding accounting, internal accounting controls or auditing matters, you are

asked to raise any such concerns in the following order: (1) to your manager, (2) to any manager or ofﬁcer in the

Finance Department, (3) to any person in the Internal Audit Department, or (4) to the Company’s Chief Legal and

Risk Ofﬁcer or any member of senior management.

If (1) you have a signiﬁcant concern regarding any accounting, internal control or auditing matter that you believe

is material in amount or in its potential impact to the Company, and (2) you are not comfortable in pursuing, or

you have not received adequate responses from, the four avenues noted above, you may bring the matter to the

attention of the Audit Committee of the board of directors, conﬁdentially and anonymously, by calling 1-800-835-5870,

inserting the I.D. Code AUDIT (28348) and following the prompts from the recorded message. Alternatively, you

may write to the Audit Committee, conﬁdentially and anonymously, at the following address: Sleep Number Audit

Committee – Conﬁdential, Sleep Number Corporation, 1001 Third Avenue South, Minneapolis, MN 55404. When

contacting the Audit Committee through these means, please be sure to provide adequate information to enable

the Audit Committee to conduct a thorough investigation of your concern.

Zero Tolerance for Retaliation

It takes courage to raise an ethical issue—especially if it involves a situation in your work area. However, the

Company supports you in carrying out your responsibility. Retaliation against anyone who in good faith reports

any suspected noncompliance with this Code is strictly prohibited. Team members will not suffer any adverse

actions or career disadvantage for questioning a Company practice or reporting a suspected violation of this

Code or other irregularity. If a team member does not feel comfortable raising a concern through a report to his/

her manager, the Company’s Chief Legal and Risk Ofﬁcer, a Human Resources representative or to a member of

the senior management team, a team member may use the Company’s independently administered Business

Abuse Hotline. To use the Company’s Business Abuse Hotline, call 1-888-662-5025. It’s conﬁdential, toll-free and

available 24 hours a day.

Disciplinary Matters

Failure of a team member to comply with this Code may result in disciplinary action, including warnings,

suspensions (with or without pay), termination of employment or any other action that may be appropriate under the

circumstances. For example, disciplinary action may be taken:

• Against team members who authorize or participate directly in actions that violate Sleep Number’s

business conduct standards.

• Against any team member who has deliberately failed to report a suspected violation or withheld relevant

and material information concerning a suspected violation.

• Against a supervisor whose inadequate supervision or lack of diligence results in a suspected violation.

• Against any team member who retaliates directly or indirectly—or encourages others to do so—against a

team member who reports a suspected violation of these standards.

This list is not intended to be exhaustive and other incidents and behaviors may also result in disciplinary action,

up to and including termination. Nothing in this Code alters the fact that employment with Sleep Number is at will,

meaning that a team member has the right to terminate employment at any time and for any reason, and that the

Company has the same right.

Exceptions or Waivers

Although it is our practice not to grant any exceptions or waivers for suspected violations of this Code, such

exceptions may be appropriate in some circumstances. If you believe in good faith that there are grounds for

an exception, please bring the matter forward to your supervisor, to a Human Resources representative, to any

member of senior management or to the Company’s Chief Legal and Risk Ofﬁcer, and the request will be given

due consideration. Any material exception or waiver granted to any director or executive ofﬁcer of the Company is

subject to approval of the board of directors or a committee of the board, and is also subject to public disclosure.

Date of Issue: June 2020

PURSUANT TO STATE LAW, I ACKNOWLEDGE AND UNDERSTAND THAT THIS CODE OF BUSINESS

CONDUCT DOES NOT CREATE AN EXPRESS OR IMPLIED CONTRACT OF EMPLOYMENT BETWEEN

THE COMPANY AND ME. I AGREE AND ACKNOWLEDGE THAT I AM AN AT-WILL EMPLOYEE, MEANING

THAT I CAN QUIT OR BE TERMINATED AT ANY TIME, FOR ANY REASON OR NO REASON. I AGREE AND

ACKNOWLEDGE THAT THIS AT-WILL RELATIONSHIP CANNOT BE ALTERED AND THAT NO CONTRACT

CAN BE FORMED REGARDING ANY TERM OR CONDITION OF EMPLOYMENT UNLESS IT IS IN WRITING

AND SIGNED BY THE PRESIDENT OF THE COMPANY. I ALSO AGREE AND ACKNOWLEDGE THAT THIS IS

THE FIRST PAGE OF THE CODE OF BUSINESS CONDUCT PUBLICATION GIVEN TO ME.

This Code is a general statement of policy, to be modiﬁed, applied and interpreted by Sleep Number at its

discretion. Sleep Number reserves the right to vary from any provision in this Code in its complete discretion.

This 2020 version of the Code replaces all previous versions of the Code.

Signature ________________________________________________________________________

Print Name ______________________________________________________________________

Date ____________________________________________________________________________

Code of Business Conduct Certiﬁcation

I hereby certify that I have received a copy of the Code of Business Conduct of Sleep Number (the “Company”),

that I have an opportunity to read the entire Code and understand its contents.

I acknowledge that I have an opportunity to ask questions of my manager, Human Resources or a representative

of the corporate ofﬁces regarding the Code of Business Conduct. I also acknowledge that I have participated in

the annual Code of Business Conduct training and that I have had an opportunity to ask questions regarding the

presentation and the subjects covered by the Code.

I further certify that I am presently not aware of any criminal conduct or any other conduct that would violate

Sleep Number’s Code of Business Conduct on the part of the Company, its team members, agents or

representatives. I also pledge to promptly report, through one of the avenues listed above, or by using the toll-

free Business Abuse call line, 1-888-662-5025, if any good faith suspicion of non-compliance with this Code, or if

any discrimination or harassment arises during the course of my employment.

Signature ________________________________________________________________________

Print Name_______________________________________________________________________

Date ____________________________________________________________________________

If you have any questions regarding the Code of Business Conduct, please contact:

1. Your manager;

2. Your Human Resources representative;

3. The Chief Legal and Risk Ofﬁcer;

4. Any member of the senior management team.

93500 SN DIG