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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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MINNESOTA
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41-1597886
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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9800 59
th
Avenue North
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Minneapolis, Minnesota
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55442
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $.01 per share
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The NASDAQ Stock Market LLC
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(NASDAQ Global Select Market)
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Securities registered pursuant to Section 12(g) of the Act:
None
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Large accelerated filer
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ý
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Accelerated filer
o
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Non-accelerated filer
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o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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•
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The Classic Series offers Sleep Number adjustability starting at $699 for a queen mattress. The series includes the Sleep Number c2 and c4 beds.
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•
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The Performance Series includes our most popular mattresses with a perfect balance of softness and pressure relieving support. The series includes the Sleep Number p5 and p6 beds.
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•
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The Memory Foam Series is breathable and contouring. The series includes the Sleep Number m6 and m7 beds.
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•
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The Innovation Series is the ultimate in individualized comfort and temperature balancing innovation. The series includes the Sleep Number i8 and i10 beds.
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•
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The Sleep Number x12 bed features the integration of multiple technology options including our exclusive FlexFit™ 3 adjustable base, and our breakthrough SleepIQ
®
technology - Probably the Best Bed in the World
SM
.
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•
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Political instability resulting in disruption of trade;
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•
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Existing or potential duties, tariffs or quotas on certain types of goods that may be imported into the United States;
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•
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Disruptions in transportation due to acts of terrorism, shipping delays, foreign or domestic dock strikes, customs inspections or other factors;
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•
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Foreign currency fluctuations; and
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•
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Economic uncertainties, including inflation.
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Retail
Stores
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Retail
Stores
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Retail
Stores
|
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Alabama
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6
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Maine
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2
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Ohio
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18
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Arizona
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8
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Maryland
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11
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Oklahoma
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3
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Arkansas
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3
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Massachusetts
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7
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Oregon
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6
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California
|
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59
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|
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Michigan
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|
13
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|
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Pennsylvania
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18
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Colorado
|
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11
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Minnesota
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13
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Rhode Island
|
|
1
|
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Connecticut
|
|
5
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Mississippi
|
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5
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South Carolina
|
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6
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Delaware
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2
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Missouri
|
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13
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South Dakota
|
|
2
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Florida
|
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29
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Montana
|
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2
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Tennessee
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10
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Georgia
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16
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Nebraska
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3
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Texas
|
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40
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Idaho
|
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2
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Nevada
|
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5
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Utah
|
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4
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Illinois
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18
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New Hampshire
|
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4
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Vermont
|
|
1
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Indiana
|
|
11
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New Jersey
|
|
14
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|
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Virginia
|
|
14
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Iowa
|
|
7
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New Mexico
|
|
3
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|
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Washington
|
|
10
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Kansas
|
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6
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New York
|
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13
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Wisconsin
|
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10
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Kentucky
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6
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North Carolina
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13
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Wyoming
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1
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Louisiana
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7
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North Dakota
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2
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Total
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463
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First
Quarter
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Second
Quarter
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Third
Quarter
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Fourth
Quarter
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||||||||
Fiscal 2014
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||||||||
High
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$
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21.65
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$
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20.32
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$
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22.54
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$
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27.35
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Low
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15.67
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17.12
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18.98
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20.09
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Fiscal 2013
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High
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$
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28.22
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$
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25.80
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$
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27.55
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$
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26.02
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Low
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17.16
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17.56
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21.01
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18.04
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Fiscal Period
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Total
Number of Shares
Purchased
(1)
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Average
Price Paid
per Share
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Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
(1)
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Approximate
Dollar Value
of Shares that
May Yet Be
Purchased
Under the
Plans or
Programs
|
||||||
September 28, 2014 through October 25, 2014
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141,099
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$
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21.18
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141,099
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$
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247,012,000
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October 26, 2014 through November 29, 2014
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234,195
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26.21
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234,195
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240,874,000
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|
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November 30, 2014 through January 3, 2015
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220,908
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26.64
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220,908
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234,988,000
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Total
|
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596,202
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$
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25.18
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596,202
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$
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234,988,000
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(1)
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Under the current Board-approved
$250.0 million
share repurchase program, we repurchased
596,202
shares of our common stock at a cost of
$15.0 million
(based on trade dates) during the three months ended
January 3, 2015
. As of
January 3, 2015
, the remaining authorization under our Board-approved share repurchase program was
$235.0 million
. There is no expiration date governing the period over which we can repurchase shares. Any repurchased shares are constructively retired and returned to an unissued status.
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1/2/2010
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1/1/2011
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12/31/2011
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12/29/2012
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12/28/2013
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1/3/2015
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||||||||||||
Select Comfort Corporation
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$
|
100
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$
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140
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$
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333
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|
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$
|
376
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|
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$
|
325
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|
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$
|
412
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S&P 400 Specialty Stores Index
|
|
100
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|
|
150
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|
|
172
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|
|
209
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|
|
317
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|
|
395
|
|
||||||
The NASDAQ Stock Market (U.S.) Index
|
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100
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|
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118
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|
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117
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|
|
135
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|
|
192
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|
|
221
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|
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Year
|
||||||||||||||||||
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2014
(1)
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2013
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2012
|
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2011
|
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2010
|
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Consolidated Statements of Operations Data:
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||||||||||
Net sales
|
$
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1,156,757
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$
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960,171
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|
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$
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934,978
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$
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743,203
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|
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$
|
605,676
|
|
Gross profit
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706,850
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601,755
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596,546
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470,345
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|
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378,263
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|
|||||
Operating expenses:
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||||||||
Sales and marketing
|
512,007
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439,156
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|
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398,205
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|
|
317,502
|
|
|
269,901
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|
|||||
General and administrative
|
84,864
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|
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62,967
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|
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66,765
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|
|
58,215
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|
|
53,832
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|
|||||
Research and development
|
8,233
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|
|
9,478
|
|
|
6,194
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|
|
4,175
|
|
|
2,147
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|
|||||
Other
(2)
|
—
|
|
|
(534
|
)
|
|
5,595
|
|
|
—
|
|
|
—
|
|
|||||
Operating income
|
101,746
|
|
|
90,688
|
|
|
119,787
|
|
|
90,453
|
|
|
52,383
|
|
|||||
Net income
|
$
|
67,974
|
|
|
$
|
60,081
|
|
|
$
|
78,094
|
|
|
$
|
60,478
|
|
|
$
|
31,568
|
|
Net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.27
|
|
|
$
|
1.10
|
|
|
$
|
1.41
|
|
|
$
|
1.10
|
|
|
$
|
0.58
|
|
Diluted
|
$
|
1.25
|
|
|
$
|
1.08
|
|
|
$
|
1.37
|
|
|
$
|
1.07
|
|
|
$
|
0.57
|
|
Shares used in calculation of net income per share:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
53,452
|
|
|
54,866
|
|
|
55,516
|
|
|
55,081
|
|
|
54,005
|
|
|||||
Diluted
|
54,193
|
|
|
55,803
|
|
|
57,076
|
|
|
56,432
|
|
|
55,264
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash, cash equivalents and marketable debt securities
|
$
|
166,045
|
|
|
$
|
145,014
|
|
|
$
|
177,821
|
|
|
$
|
146,317
|
|
|
$
|
76,016
|
|
Working capital
|
45,543
|
|
|
52,357
|
|
|
77,517
|
|
|
72,145
|
|
|
20,053
|
|
|||||
Total assets
|
474,187
|
|
|
381,765
|
|
|
342,021
|
|
|
262,657
|
|
|
169,957
|
|
|||||
Total shareholders’ equity
|
256,907
|
|
|
225,220
|
|
|
193,697
|
|
|
129,391
|
|
|
57,977
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Selected Operating Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Stores open at period-end
|
463
|
|
|
440
|
|
|
410
|
|
|
381
|
|
|
386
|
|
|||||
Stores opened during period
|
57
|
|
|
71
|
|
|
57
|
|
|
19
|
|
|
7
|
|
|||||
Stores closed during period
|
34
|
|
|
41
|
|
|
28
|
|
|
24
|
|
|
24
|
|
|||||
Average revenue per store (000’s)
(3)
|
$
|
2,327
|
|
|
$
|
2,093
|
|
|
$
|
2,164
|
|
|
$
|
1,721
|
|
|
$
|
1,295
|
|
Percentage of stores with more than $2.0 million in net sales
(3)
|
59
|
%
|
|
46
|
%
|
|
49
|
%
|
|
24
|
%
|
|
7
|
%
|
|||||
Percentage of stores with more than $3.0 million in net sales
(3)
|
16
|
%
|
|
10
|
%
|
|
12
|
%
|
|
3
|
%
|
|
1
|
%
|
|||||
Average revenue per mattress unit - Company-Controlled channel
(4)
|
$
|
3,671
|
|
|
$
|
3,245
|
|
|
$
|
3,050
|
|
|
$
|
2,694
|
|
|
$
|
2,424
|
|
Company-Controlled comparable-sales increase (decrease)
(5)
|
12
|
%
|
|
(4
|
)%
|
|
23
|
%
|
|
26
|
%
|
|
19
|
%
|
|||||
Total retail square footage (at period-end) (000's)
|
1,106
|
|
|
949
|
|
|
759
|
|
|
610
|
|
|
582
|
|
|||||
Average square footage per store open during period
(3)
|
2,302
|
|
|
1,985
|
|
|
1,670
|
|
|
1,526
|
|
|
1,484
|
|
|||||
Net sales per square foot
(3)
|
$
|
1,025
|
|
|
$
|
1,077
|
|
|
$
|
1,324
|
|
|
$
|
1,135
|
|
|
$
|
873
|
|
Average store age (in months at period-end)
|
97
|
|
|
102
|
|
|
113
|
|
|
113
|
|
|
113
|
|
|||||
Earnings before interest, depreciation and amortization (“Adjusted EBITDA”)
(6)
|
$
|
148,223
|
|
|
$
|
125,020
|
|
|
$
|
150,285
|
|
|
$
|
109,180
|
|
|
$
|
69,675
|
|
Free cash flows
(6)
|
$
|
67,874
|
|
|
$
|
11,294
|
|
|
$
|
49,033
|
|
|
$
|
67,519
|
|
|
$
|
64,058
|
|
Return on Invested Capital (ROIC)
(6)
|
15.1
|
%
|
|
15.1
|
%
|
|
21.5
|
%
|
|
19.9
|
%
|
|
14.7
|
%
|
(1)
|
Fiscal year 2014 had 53 weeks. All other fiscal years presented had 52 weeks.
|
(2)
|
In February 2012, we announced that William R. McLaughlin, then President and CEO, would retire from the Company effective June 1, 2012. In recognition of Mr. McLaughlin's contributions, the Compensation Committee approved the modification of Mr. McLaughlin's unvested stock awards, including performance-based stock awards. As a result of these modifications, we recorded incremental non-cash compensation of $5.6 million ($3.7 million, net of income tax). The performance-based stock awards are subject to applicable adjustments through 2014 based on actual performance. During 2013 we recorded a non-cash compensation benefit of
$0.5 million
(
$0.4 million
, net of income tax) resulting from performance-based stock award adjustments. There were no performance-based stock award adjustments in 2014.
|
(3)
|
For stores open during the entire period indicated.
|
(4)
|
Represents Company-Controlled channel total net sales divided by Company-Controlled channel mattress units.
|
(5)
|
Stores are included in the comparable sales calculation in the 13th full month of operation. Stores that have been remodeled or repositioned within the same shopping center remain in the comparable-store base. The number of comparable stores used to calculate such data was 396, 359, 348, 359 and 379 for 2014, 2013, 2012, 2011 and 2010, respectively. Fiscal 2014 included 53 weeks, as compared to 52 weeks for the other periods presented. Comparable sales have been adjusted and reported as if all years had the same number of weeks.
|
(6)
|
These non-GAAP measures are not in accordance with, or preferable to, GAAP financial data. However, we are providing this information as we believe it facilitates annual and year-over-year comparisons for investors and financial analysts. See pages 23 and 24 for the reconciliation of these non-GAAP measures to the appropriate GAAP measures.
|
|
|
Year
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Net income
|
|
$
|
67,974
|
|
|
$
|
60,081
|
|
|
$
|
78,094
|
|
|
$
|
60,478
|
|
|
$
|
31,568
|
|
Income tax expense
|
|
34,134
|
|
|
30,930
|
|
|
41,911
|
|
|
29,942
|
|
|
18,922
|
|
|||||
Interest expense
|
|
53
|
|
|
51
|
|
|
91
|
|
|
187
|
|
|
1,951
|
|
|||||
Depreciation and amortization
|
|
38,767
|
|
|
29,599
|
|
|
19,735
|
|
|
13,493
|
|
|
13,012
|
|
|||||
Stock-based compensation
|
|
6,798
|
|
|
4,232
|
|
|
10,306
|
|
|
4,971
|
|
|
3,962
|
|
|||||
Asset impairments
|
|
497
|
|
|
127
|
|
|
148
|
|
|
109
|
|
|
260
|
|
|||||
Adjusted EBITDA
|
|
$
|
148,223
|
|
|
$
|
125,020
|
|
|
$
|
150,285
|
|
|
$
|
109,180
|
|
|
$
|
69,675
|
|
|
|
Year
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Net cash provided by operating activities
|
|
$
|
144,468
|
|
|
$
|
88,105
|
|
|
$
|
100,626
|
|
|
$
|
91,046
|
|
|
$
|
71,407
|
|
Subtract: Purchases of property and equipment
|
|
76,594
|
|
|
76,811
|
|
|
51,593
|
|
|
23,527
|
|
|
7,349
|
|
|||||
Free cash flow
|
|
$
|
67,874
|
|
|
$
|
11,294
|
|
|
$
|
49,033
|
|
|
$
|
67,519
|
|
|
$
|
64,058
|
|
|
|
Year
|
||||||||||||||||||
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
Net operating profit after taxes (NOPAT)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating income
|
|
$
|
101,746
|
|
|
$
|
90,688
|
|
|
$
|
119,787
|
|
|
$
|
90,453
|
|
|
$
|
52,383
|
|
Add: Rent expense
(1)
|
|
57,605
|
|
|
50,289
|
|
|
48,543
|
|
|
41,878
|
|
|
38,529
|
|
|||||
Add: Interest income
|
|
415
|
|
|
375
|
|
|
310
|
|
|
155
|
|
|
58
|
|
|||||
Less: Depreciation on capitalized operating leases
(2)
|
|
(14,265
|
)
|
|
(13,095
|
)
|
|
(12,072
|
)
|
|
(10,677
|
)
|
|
(10,431
|
)
|
|||||
Less: Income taxes
(3)
|
|
(48,900
|
)
|
|
(43,827
|
)
|
|
(54,358
|
)
|
|
(41,920
|
)
|
|
(28,485
|
)
|
|||||
NOPAT
|
|
$
|
96,601
|
|
|
$
|
84,430
|
|
|
$
|
102,210
|
|
|
$
|
79,889
|
|
|
$
|
52,054
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average invested capital
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total equity
|
|
$
|
256,907
|
|
|
$
|
225,220
|
|
|
$
|
193,697
|
|
|
$
|
129,391
|
|
|
$
|
57,977
|
|
Less: Cash greater than target
(4)
|
|
(37,319
|
)
|
|
(29,622
|
)
|
|
(62,627
|
)
|
|
(32,788
|
)
|
|
—
|
|
|||||
Add: Long-term debt
(5)
|
|
—
|
|
|
2
|
|
|
112
|
|
|
292
|
|
|
677
|
|
|||||
Add: Capitalized operating lease obligations
(6)
|
|
460,840
|
|
|
402,312
|
|
|
388,344
|
|
|
335,024
|
|
|
308,232
|
|
|||||
Total invested capital at end of period
|
|
$
|
680,428
|
|
|
$
|
597,912
|
|
|
$
|
519,526
|
|
|
$
|
431,919
|
|
|
$
|
366,886
|
|
Average invested capital
(7)
|
|
$
|
639,118
|
|
|
$
|
560,133
|
|
|
$
|
475,159
|
|
|
$
|
402,240
|
|
|
$
|
353,184
|
|
Return on invested capital (ROIC)
(8)
|
|
15.1
|
%
|
|
15.1
|
%
|
|
21.5
|
%
|
|
19.9
|
%
|
|
14.7
|
%
|
•
|
Current and future general and industry economic trends and consumer confidence;
|
•
|
The effectiveness of our marketing messages;
|
•
|
The efficiency of our advertising and promotional efforts;
|
•
|
Our ability to execute our Company-Controlled distribution strategy;
|
•
|
Our ability to achieve and maintain acceptable levels of product and service quality, and acceptable product return and warranty claims rates;
|
•
|
Our ability to continue to improve and expand our product line, and consumer acceptance of our products, product quality, innovation and brand image;
|
•
|
Industry competition, the emergence of additional competitive products, and the adequacy of our intellectual property rights to protect our products and brand from competitive or infringing activities;
|
•
|
Availability of attractive and cost-effective consumer credit options, including the impact of recent changes in federal law that restricts various forms of consumer credit promotional offerings;
|
•
|
Pending and unforeseen litigation and the potential for adverse publicity associated with litigation;
|
•
|
Our “just-in-time” manufacturing processes with minimal levels of inventory, which may leave us vulnerable to shortages in supply;
|
•
|
Our dependence on significant suppliers and our ability to maintain relationships with key suppliers, including several sole-source suppliers;
|
•
|
Rising commodity costs and other inflationary pressures;
|
•
|
Risks inherent in global sourcing activities;
|
•
|
Risks of disruption in the operation of either of our two manufacturing facilities;
|
•
|
Increasing government regulation;
|
•
|
The adequacy of our management information systems to meet the evolving needs of our business and existing and evolving regulatory standards applicable to data privacy and security;
|
•
|
The costs and potential disruptions to our business related to upgrading our management information systems;
|
•
|
Our ability to attract, retain and motivate qualified management, executive and other key employees, including qualified retail sales professionals and managers; and
|
•
|
Uncertainties arising from global events, such as terrorist attacks or a pandemic outbreak, or the threat of such events.
|
•
|
Overview
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance-Sheet Arrangements and Contractual Obligations
|
•
|
Critical Accounting Policies and Estimates
|
•
|
Recent Accounting Pronouncements
|
•
|
Everyone will know Sleep Number
®
;
|
•
|
Sleep Number innovations will deliver meaningful customer benefits;
|
•
|
Customers will easily find and interact with Sleep Number;
|
•
|
Customers will enthusiastically recommend Sleep Number; and
|
•
|
Innovation and growth will be funded by leveraging the business model.
|
•
|
Net sales for 2014
increased
20%
to
$1.16 billion
, compared with
$960 million
in the prior year. Company-Controlled comparable sales increased 12% and sales from 23 net new stores opened in the past 12 months added 8 percentage points ("ppt.") of growth in 2014. In addition, 2014 included 53 weeks compared with 52 weeks in the prior year, with the extra week benefiting 2014 net sales growth by approximately $24 million.
|
•
|
On a trailing twelve-month basis, sales per store (for stores open at least one year) increased 11% to $2.3 million compared with the prior-year trailing twelve-month period.
|
•
|
Operating income for
2014
increased 12% to
$102 million
, or
8.8%
of net sales, compared with
$91 million
, or
9.4%
of net sales, for the same period one year ago. The increase in operating income was primarily due to the additional operating income generated by the 20% increase in net sales.
|
•
|
Net income
increased
13%
to
$68 million
, or
$1.25
per diluted share, compared with net income of
$60 million
, or
$1.08
per diluted share in
2013
. Diluted earnings per share for 2014 benefited from the profits generated during the additional 53
rd
week ($0.06 per diluted share) and a favorable fourth quarter 2014 legal settlement ($0.04 per diluted share).
|
•
|
Achieved a return on invested capital (ROIC) of 15.1% in 2014, consistent with the prior year and well above our cost of capital.
|
•
|
Cash provided by operating activities in
2014
totaled
$144 million
, compared with
$88 million
for the prior year.
|
•
|
At
January 3, 2015
, cash, cash equivalents and marketable debt securities, less customer prepayments, totaled
$137 million
compared with
$130 million
at
December 28, 2013
, and we had no borrowings under our revolving credit facility.
|
•
|
In
2014
, we repurchased
2.2 million
shares of our common stock under our Board-approved share repurchase program at a cost of
$45 million
(
$20.77
per share). As of
January 3, 2015
, the remaining authorization under our Board-approved share repurchase program was
$235 million
.
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Company-Controlled channel
|
|
97.3
|
%
|
|
96.2
|
%
|
|
96.7
|
%
|
Wholesale/Other channel
|
|
2.7
|
%
|
|
3.8
|
%
|
|
3.3
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
Net Sales Increase/(Decrease)
|
|||||||
|
|
2014
|
|
2013
|
|
2012
|
|||
Retail comparable-store sales
(1)
|
|
12
|
%
|
|
(4
|
%)
|
|
24
|
%
|
Direct and E-Commerce
(1)
|
|
9
|
%
|
|
(5
|
%)
|
|
9
|
%
|
Company-Controlled comparable sales change
(1)
|
|
12
|
%
|
|
(4
|
%)
|
|
23
|
%
|
Net opened/closed stores and 53
rd
week in 2014
|
|
10
|
%
|
|
6
|
%
|
|
3
|
%
|
Total Company-Controlled channel
|
|
22
|
%
|
|
2
|
%
|
|
26
|
%
|
Wholesale/Other channel
|
|
(13
|
%)
|
|
18
|
%
|
|
10
|
%
|
Total net sales change
|
|
20
|
%
|
|
3
|
%
|
|
26
|
%
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Average sales per store
(1)
($ in thousands)
|
|
$
|
2,327
|
|
|
$
|
2,093
|
|
|
$
|
2,164
|
|
Average sales per square foot
(1)
|
|
$
|
1,025
|
|
|
$
|
1,077
|
|
|
$
|
1,324
|
|
Stores > $2 million in net sales
(1)
|
|
59
|
%
|
|
46
|
%
|
|
49
|
%
|
|||
Stores > $3 million in net sales
(1)
|
|
16
|
%
|
|
10
|
%
|
|
12
|
%
|
|||
Average revenue per mattress unit – Company-Controlled channel
(2)
|
|
$
|
3,671
|
|
|
$
|
3,245
|
|
|
$
|
3,050
|
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Beginning of period
|
|
440
|
|
|
410
|
|
|
381
|
|
Opened
|
|
57
|
|
|
71
|
|
|
57
|
|
Closed
|
|
(34
|
)
|
|
(41
|
)
|
|
(28
|
)
|
End of period
|
|
463
|
|
|
440
|
|
|
410
|
|
|
|
2014
|
|
2013
|
||||
Total cash provided by (used in):
|
|
|
|
|
||||
Operating activities
|
|
$
|
144.5
|
|
|
$
|
88.1
|
|
Investing activities
|
|
(114.4
|
)
|
|
(87.3
|
)
|
||
Financing activities
|
|
(36.3
|
)
|
|
(30.5
|
)
|
||
Net decrease in cash and cash equivalents
|
|
$
|
(6.2
|
)
|
|
$
|
(29.7
|
)
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
Total
|
|
< 1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
> 5 Years
|
||||||||||
Operating leases
(1)
|
|
$
|
232,849
|
|
|
$
|
48,366
|
|
|
$
|
84,001
|
|
|
$
|
46,915
|
|
|
$
|
53,567
|
|
Purchase commitments
|
|
7,464
|
|
|
7,464
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
|
$
|
240,313
|
|
|
$
|
55,830
|
|
|
$
|
84,001
|
|
|
$
|
46,915
|
|
|
$
|
53,567
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions
|
Stock-Based Compensation
|
|
|
|
|
We have stock-based compensation plans, which includes non-qualified stock options and stock awards.
See Note 1,
Business and Summary of Significant Accounting Policies
, and Note 10,
Shareholders’ Equity
, to the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, for a complete discussion of our stock-based compensation programs.
|
|
Option-pricing models and generally accepted valuation techniques require management to make assumptions and to apply judgment to determine the fair value of our awards. These assumptions and judgments include estimating the volatility of our stock price, future employee forfeiture rates and future employee stock option exercise behaviors. Changes in these assumptions can materially affect the fair value estimate or future earnings adjustments.
Performance-based stock awards require management to make assumptions regarding the likelihood of achieving performance targets. |
|
We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to determine stock-based compensation expense. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to changes in stock-based compensation expense that could be material.
In addition, if actual results are not consistent with the assumptions used, the stock-based compensation expense reported in our financial statements may not be representative of the actual economic cost of the stock-based compensation. Finally, if the actual forfeiture rates, or the actual achievement of performance targets, are not consistent with the assumptions used, we could experience future earnings adjustments. A 10% change in our stock-based compensation expense for the year ended January 3, 2015, would have affected net income by approximately $451,000 in 2014. |
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results
Differ From Assumptions |
Goodwill and Indefinite-Lived Intangible Assets
|
||||
Goodwill represents the excess of cost over the fair value of identifiable net assets of businesses acquired. Our indefinite-lived intangible assets include trade names/trademarks.
See Note 1, Business and Summary of Significant Accounting Policies and Note 7, Goodwill and Intangible Assets, Net , to the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, for a complete discussion of our goodwill and indefinite-lived intangible assets. |
|
The determination of fair value involves uncertainties because it requires management to make assumptions and to apply judgment to estimate industry and economic factors and the profitability of future business strategies. Management’s assumptions also include projected revenues and operating profit levels, as well as consideration of any other factors that may indicate potential impairment.
|
|
In the fourth quarter of fiscal 2014, management completed its annual goodwill and other indefinite-lived intangible asset impairment tests and determined there was no impairment. We believe our assumptions and judgments used in estimating cash flows and determining fair value were reasonable. However, unexpected changes to such assumptions and judgments could affect our impairment analyses and future results of operations, including an impairment charge that could be material.
|
Warranty Liabilities
|
|
|
|
|
We provide a limited warranty on most of the products we sell.
See Note 1,
Business and Summary of Significant Accounting Policies
, to the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, for a complete discussion of our warranty program and liabilities.
|
|
The majority of our warranty claims are incurred within the first year. However, our warranty liability contains uncertainties because our warranty obligations cover an extended period of time. A revision of estimated claim rates or the projected cost of materials and freight associated with sending replacement parts to customers could have a material adverse effect on future results of operations.
|
|
We have not made any material changes in our warranty liability assessment methodology during the past three fiscal years. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate our warranty liability. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material.
A 10% change in our warranty liability at January 3, 2015, would have affected net income by approximately $387,000 in 2014.
|
Revenue Recognition
|
||||
Certain accounting estimates relating to revenue recognition contain uncertainty because they require management to make assumptions and to apply judgment regarding the effects of future events.
See Note 1,
Business and Summary of Significant Accounting Policies
,
to the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data, of this Annual Report on Form 10-K, for a complete discussion of our revenue recognition policies.
|
|
Our estimates of sales returns contain uncertainties as actual sales return rates may vary from expected rates, resulting in adjustments to net sales in future periods. These adjustments could have an adverse effect on future results of operations.
|
|
We have not made any material changes in the accounting methodology used to establish our sales returns allowance during the past three fiscal years. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate our sales returns allowance. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to additional losses or gains in future periods.
A 10% change in our sales returns allowance at January 3, 2015 would have affected net income by approximately $1.0 million in 2014. |
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
51,995
|
|
|
$
|
58,223
|
|
Marketable debt securities – current
|
69,609
|
|
|
52,159
|
|
||
Accounts receivable, net of allowance for doubtful accounts of $739 and $425, respectively
|
19,693
|
|
|
14,979
|
|
||
Inventories
|
53,535
|
|
|
40,152
|
|
||
Prepaid expenses
|
17,792
|
|
|
9,216
|
|
||
Deferred income taxes
|
8,786
|
|
|
6,936
|
|
||
Other current assets
|
11,185
|
|
|
7,874
|
|
||
Total current assets
|
232,595
|
|
|
189,539
|
|
||
|
|
|
|
||||
Non-current assets:
|
|
|
|
|
|||
Marketable debt securities – non-current
|
44,441
|
|
|
34,632
|
|
||
Property and equipment, net
|
165,453
|
|
|
129,542
|
|
||
Goodwill and intangible assets, net
|
15,986
|
|
|
16,823
|
|
||
Deferred income taxes
|
3,433
|
|
|
4,943
|
|
||
Other assets
|
12,279
|
|
|
6,286
|
|
||
Total assets
|
$
|
474,187
|
|
|
$
|
381,765
|
|
|
|
|
|
||||
Liabilities and Shareholders’ Equity
|
|
|
|
|
|||
Current liabilities:
|
|
|
|
|
|||
Accounts payable
|
$
|
84,197
|
|
|
$
|
73,391
|
|
Customer prepayments
|
28,726
|
|
|
15,392
|
|
||
Accrued sales returns
|
15,262
|
|
|
9,433
|
|
||
Compensation and benefits
|
33,066
|
|
|
15,242
|
|
||
Taxes and withholding
|
10,207
|
|
|
12,517
|
|
||
Other current liabilities
|
15,594
|
|
|
11,207
|
|
||
Total current liabilities
|
187,052
|
|
|
137,182
|
|
||
|
|
|
|
||||
Non-current liabilities:
|
|
|
|
|
|||
Warranty liabilities
|
2,722
|
|
|
1,567
|
|
||
Other long-term liabilities
|
27,506
|
|
|
17,796
|
|
||
Total liabilities
|
217,280
|
|
|
156,545
|
|
||
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
|
|||
Undesignated preferred stock; 5,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value; 142,500 shares authorized, 52,798 and 54,901 shares issued and outstanding, respectively
|
528
|
|
|
549
|
|
||
Additional paid-in capital
|
—
|
|
|
5,382
|
|
||
Retained earnings
|
256,413
|
|
|
219,276
|
|
||
Accumulated other comprehensive (loss) income
|
(34
|
)
|
|
13
|
|
||
Total shareholders’ equity
|
256,907
|
|
|
225,220
|
|
||
Total liabilities and shareholders’ equity
|
$
|
474,187
|
|
|
$
|
381,765
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Net sales
|
$
|
1,156,757
|
|
|
$
|
960,171
|
|
|
$
|
934,978
|
|
Cost of sales
|
449,907
|
|
|
358,416
|
|
|
338,432
|
|
|||
Gross profit
|
706,850
|
|
|
601,755
|
|
|
596,546
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||
Sales and marketing
|
512,007
|
|
|
439,156
|
|
|
398,205
|
|
|||
General and administrative
|
84,864
|
|
|
62,967
|
|
|
66,765
|
|
|||
Research and development
|
8,233
|
|
|
9,478
|
|
|
6,194
|
|
|||
CEO transition (benefit) costs
|
—
|
|
|
(534
|
)
|
|
5,595
|
|
|||
Total operating expenses
|
605,104
|
|
|
511,067
|
|
|
476,759
|
|
|||
Operating income
|
101,746
|
|
|
90,688
|
|
|
119,787
|
|
|||
Other income, net
|
362
|
|
|
323
|
|
|
218
|
|
|||
Income before income taxes
|
102,108
|
|
|
91,011
|
|
|
120,005
|
|
|||
Income tax expense
|
34,134
|
|
|
30,930
|
|
|
41,911
|
|
|||
Net income
|
$
|
67,974
|
|
|
$
|
60,081
|
|
|
$
|
78,094
|
|
|
|
|
|
|
|
||||||
Basic net income per share:
|
|
|
|
|
|
|
|
|
|||
Net income per share – basic
|
$
|
1.27
|
|
|
$
|
1.10
|
|
|
$
|
1.41
|
|
Weighted-average shares – basic
|
53,452
|
|
|
54,866
|
|
|
55,516
|
|
|||
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|||
Net income per share – diluted
|
$
|
1.25
|
|
|
$
|
1.08
|
|
|
$
|
1.37
|
|
Weighted-average shares – diluted
|
54,193
|
|
|
55,803
|
|
|
57,076
|
|
|
|
2014
|
|
2013
|
|
2012
|
|||||
Net income
|
|
$
|
67,974
|
|
|
$
|
60,081
|
|
|
78,094
|
|
Other comprehensive loss – unrealized loss on available-for-sale marketable debt securities, net of income tax
|
|
(47
|
)
|
|
(7
|
)
|
|
(5
|
)
|
||
Comprehensive income
|
|
$
|
67,927
|
|
|
$
|
60,074
|
|
|
78,089
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Total
|
|||||||||||||
Shares
|
|
Amount
|
||||||||||||||||||||
Balance at December 31, 2011
|
56,397
|
|
|
$
|
564
|
|
|
$
|
47,701
|
|
|
$
|
81,101
|
|
|
$
|
25
|
|
|
$
|
129,391
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
78,094
|
|
|
—
|
|
|
78,094
|
|
|||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized loss on available-for-sale marketable debt securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(5
|
)
|
|||||
Exercise of common stock options
|
659
|
|
|
7
|
|
|
5,131
|
|
|
—
|
|
|
—
|
|
|
5,138
|
|
|||||
Tax effect from stock-based compensation
|
—
|
|
|
—
|
|
|
5,665
|
|
|
—
|
|
|
—
|
|
|
5,665
|
|
|||||
Stock-based compensation
|
170
|
|
|
1
|
|
|
10,305
|
|
|
—
|
|
|
—
|
|
|
10,306
|
|
|||||
Repurchases of common stock
|
(1,323
|
)
|
|
(13
|
)
|
|
(34,879
|
)
|
|
—
|
|
|
—
|
|
|
(34,892
|
)
|
|||||
Balance at December 29, 2012
|
55,903
|
|
|
$
|
559
|
|
|
$
|
33,923
|
|
|
$
|
159,195
|
|
|
$
|
20
|
|
|
$
|
193,697
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
60,081
|
|
|
—
|
|
|
60,081
|
|
|||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized loss on available-for-sale marketable debt securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|||||
Exercise of common stock options
|
757
|
|
|
7
|
|
|
7,959
|
|
|
—
|
|
|
—
|
|
|
7,966
|
|
|||||
Tax effect from stock-based compensation
|
—
|
|
|
—
|
|
|
1,007
|
|
|
—
|
|
|
—
|
|
|
1,007
|
|
|||||
Stock-based compensation
|
160
|
|
|
2
|
|
|
4,230
|
|
|
—
|
|
|
—
|
|
|
4,232
|
|
|||||
Repurchases of common stock
|
(1,919
|
)
|
|
(19
|
)
|
|
(42,053
|
)
|
|
—
|
|
|
—
|
|
|
(42,072
|
)
|
|||||
Other
|
—
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|||||
Balance at December 28, 2013
|
54,901
|
|
|
$
|
549
|
|
|
$
|
5,382
|
|
|
$
|
219,276
|
|
|
$
|
13
|
|
|
$
|
225,220
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
67,974
|
|
|
—
|
|
|
67,974
|
|
|||||
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Unrealized loss on available-for-sale marketable debt securities, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(47
|
)
|
|
(47
|
)
|
|||||
Exercise of common stock options
|
239
|
|
|
2
|
|
|
2,871
|
|
|
—
|
|
|
—
|
|
|
2,873
|
|
|||||
Tax effect from stock-based compensation
|
—
|
|
|
—
|
|
|
581
|
|
|
—
|
|
|
—
|
|
|
581
|
|
|||||
Stock-based compensation
|
(96
|
)
|
|
(1
|
)
|
|
6,799
|
|
|
—
|
|
|
—
|
|
|
6,798
|
|
|||||
Repurchases of common stock
|
(2,246
|
)
|
|
(22
|
)
|
|
(15,633
|
)
|
|
(30,837
|
)
|
|
—
|
|
|
(46,492
|
)
|
|||||
Balance at January 3, 2015
|
52,798
|
|
|
$
|
528
|
|
|
$
|
—
|
|
|
$
|
256,413
|
|
|
$
|
(34
|
)
|
|
$
|
256,907
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
67,974
|
|
|
$
|
60,081
|
|
|
$
|
78,094
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
||||
Depreciation and amortization
|
39,809
|
|
|
30,811
|
|
|
20,401
|
|
|||
Stock-based compensation
|
6,798
|
|
|
4,232
|
|
|
10,306
|
|
|||
Net loss on disposals and impairments of assets
|
492
|
|
|
24
|
|
|
115
|
|
|||
Excess tax benefits from stock-based compensation
|
(1,163
|
)
|
|
(3,831
|
)
|
|
(6,446
|
)
|
|||
Deferred income taxes
|
(311
|
)
|
|
2,037
|
|
|
3,499
|
|
|||
Changes in operating assets and liabilities, net of effect of acquisition:
|
|
|
|
|
|
|
|||||
Accounts receivable
|
(4,717
|
)
|
|
1,993
|
|
|
(2,705
|
)
|
|||
Inventories
|
(13,383
|
)
|
|
(3,910
|
)
|
|
(10,713
|
)
|
|||
Income taxes
|
(4,314
|
)
|
|
4,395
|
|
|
4,299
|
|
|||
Prepaid expenses and other assets
|
(9,973
|
)
|
|
(3,169
|
)
|
|
(2,382
|
)
|
|||
Accounts payable
|
14,340
|
|
|
(3,477
|
)
|
|
7,114
|
|
|||
Customer prepayments
|
13,334
|
|
|
198
|
|
|
1,665
|
|
|||
Accrued compensation and benefits
|
17,735
|
|
|
(5,202
|
)
|
|
(8,108
|
)
|
|||
Other taxes and withholding
|
2,584
|
|
|
(153
|
)
|
|
765
|
|
|||
Warranty liabilities
|
1,671
|
|
|
(1,236
|
)
|
|
(1,454
|
)
|
|||
Other accruals and liabilities
|
13,592
|
|
|
5,312
|
|
|
6,176
|
|
|||
Net cash provided by operating activities
|
144,468
|
|
|
88,105
|
|
|
100,626
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Investments in marketable debt securities
|
(90,349
|
)
|
|
(44,170
|
)
|
|
(86,803
|
)
|
|||
Purchases of property and equipment
|
(76,594
|
)
|
|
(76,811
|
)
|
|
(51,593
|
)
|
|||
Proceeds from maturities of marketable debt securities
|
54,506
|
|
|
53,565
|
|
|
26,249
|
|
|||
Investment in non-marketable equity securities
|
(1,500
|
)
|
|
(4,500
|
)
|
|
—
|
|
|||
Proceeds from sales of property and equipment
|
5
|
|
|
117
|
|
|
45
|
|
|||
Increase in restricted cash
|
(500
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of business
|
—
|
|
|
(15,500
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(114,432
|
)
|
|
(87,299
|
)
|
|
(112,102
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
||||
Repurchases of common stock
|
(46,492
|
)
|
|
(42,072
|
)
|
|
(34,892
|
)
|
|||
Net increase (decrease) in short-term borrowings
|
6,192
|
|
|
(223
|
)
|
|
6,494
|
|
|||
Proceeds from issuance of common stock
|
2,873
|
|
|
7,966
|
|
|
5,138
|
|
|||
Excess tax benefits from stock-based compensation
|
1,163
|
|
|
3,831
|
|
|
6,446
|
|
|||
Debt issuance costs
|
—
|
|
|
—
|
|
|
(50
|
)
|
|||
Net cash used in financing activities
|
(36,264
|
)
|
|
(30,498
|
)
|
|
(16,864
|
)
|
|||
|
|
|
|
|
|
||||||
Net decrease in cash and cash equivalents
|
(6,228
|
)
|
|
(29,692
|
)
|
|
(28,340
|
)
|
|||
Cash and cash equivalents, at beginning of period
|
58,223
|
|
|
87,915
|
|
|
116,255
|
|
|||
Cash and cash equivalents, at end of period
|
$
|
51,995
|
|
|
$
|
58,223
|
|
|
$
|
87,915
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
38,474
|
|
|
$
|
24,253
|
|
|
$
|
34,181
|
|
Interest paid
|
$
|
49
|
|
|
$
|
34
|
|
|
$
|
81
|
|
Purchases of property and equipment included in accounts payable
|
$
|
5,802
|
|
|
$
|
3,465
|
|
|
$
|
3,817
|
|
Leasehold improvements
|
5 to 10 years
|
Furniture and equipment
|
5 to 7 years
|
Production machinery, computer equipment and software
|
3 to 7 years
|
Property under capital lease
|
3 to 4 years
|
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at beginning of period
|
$
|
4,153
|
|
|
$
|
4,858
|
|
|
$
|
6,310
|
|
Additions charged to costs and expenses for current-year sales
|
9,437
|
|
|
4,603
|
|
|
4,114
|
|
|||
Deductions from reserves
|
(8,118
|
)
|
|
(6,070
|
)
|
|
(5,094
|
)
|
|||
Changes in liability for pre-existing warranties during the current year, including expirations
|
352
|
|
|
230
|
|
|
(472
|
)
|
|||
Acquired warranty reserve
|
—
|
|
|
532
|
|
|
—
|
|
|||
Balance at end of period
|
$
|
5,824
|
|
|
$
|
4,153
|
|
|
$
|
4,858
|
|
•
|
Level 1 – observable inputs such as quoted prices in active markets;
|
•
|
Level 2 – inputs, other than the quoted prices in active markets, that are observable either directly or indirectly including:
|
•
|
Level 3 – unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
Cost of Sales
|
|
Sales & Marketing
|
• Costs associated with purchasing, manufacturing, shipping, handling and delivering our products to our retail stores and customers;
• Physical inventory losses, scrap and obsolescence;
• Related occupancy and depreciation expenses;
• Costs associated with returns and exchanges; and
• Estimated costs to service warranty claims of customers.
|
|
• Advertising and media production;
• Marketing and selling materials such as brochures, videos, customer mailings and in-store signage;
• Payroll and benefits for sales and customer service staff;
• Store occupancy costs;
• Store depreciation expense;
• Credit card processing fees; and
• Promotional financing costs.
|
G&A
|
|
R&D
(1)
|
• Payroll and benefit costs for corporate employees, including information technology, legal, human resources, finance, sales and marketing administration, investor relations and risk management;
• Occupancy costs of corporate facilities;
• Depreciation related to corporate assets;
• Information hardware, software and maintenance;
• Insurance;
• Investor relations costs; and
• Other overhead costs.
|
|
• Internal labor and benefits related to research and development activities;
• Outside consulting services related to research and development activities; and
• Testing equipment related to research and development activities.
(1)
Costs incurred in connection with R&D are charged to expense as incurred.
|
|
|
January 3, 2015
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Marketable debt securities – current
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
17,506
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,506
|
|
Corporate bonds
|
|
—
|
|
|
20,139
|
|
|
—
|
|
|
20,139
|
|
||||
U.S. Agency bonds
|
|
—
|
|
|
12,525
|
|
|
—
|
|
|
12,525
|
|
||||
Municipal bonds
|
|
—
|
|
|
6,953
|
|
|
—
|
|
|
6,953
|
|
||||
Commercial paper
|
|
—
|
|
|
12,486
|
|
|
—
|
|
|
12,486
|
|
||||
|
|
17,506
|
|
|
52,103
|
|
|
—
|
|
|
69,609
|
|
||||
Marketable debt securities – non-current
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
14,990
|
|
|
—
|
|
|
—
|
|
|
14,990
|
|
||||
Corporate bonds
|
|
—
|
|
|
15,236
|
|
|
—
|
|
|
15,236
|
|
||||
U.S. Agency bonds
|
|
—
|
|
|
10,014
|
|
|
—
|
|
|
10,014
|
|
||||
Municipal bonds
|
|
—
|
|
|
4,201
|
|
|
—
|
|
|
4,201
|
|
||||
|
|
14,990
|
|
|
29,451
|
|
|
—
|
|
|
44,441
|
|
||||
|
|
$
|
32,496
|
|
|
$
|
81,554
|
|
|
$
|
—
|
|
|
$
|
114,050
|
|
|
|
December 28, 2013
|
||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Marketable debt securities – current
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
$
|
15,011
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,011
|
|
Corporate bonds
|
|
—
|
|
|
20,300
|
|
|
—
|
|
|
20,300
|
|
||||
U.S. Agency bonds
|
|
—
|
|
|
12,025
|
|
|
—
|
|
|
12,025
|
|
||||
Municipal bonds
|
|
—
|
|
|
4,823
|
|
|
—
|
|
|
4,823
|
|
||||
|
|
15,011
|
|
|
37,148
|
|
|
—
|
|
|
52,159
|
|
||||
Marketable debt securities – non-current
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury securities
|
|
8,978
|
|
|
—
|
|
|
—
|
|
|
8,978
|
|
||||
Corporate bonds
|
|
—
|
|
|
15,484
|
|
|
—
|
|
|
15,484
|
|
||||
U.S. Agency bonds
|
|
—
|
|
|
7,498
|
|
|
—
|
|
|
7,498
|
|
||||
Municipal bonds
|
|
—
|
|
|
2,672
|
|
|
—
|
|
|
2,672
|
|
||||
|
|
8,978
|
|
|
25,654
|
|
|
—
|
|
|
34,632
|
|
||||
|
|
$
|
23,989
|
|
|
$
|
62,802
|
|
|
$
|
—
|
|
|
$
|
86,791
|
|
Accounts receivable
|
$
|
365
|
|
Inventories
|
678
|
|
|
Other assets
|
248
|
|
|
Property and equipment
|
513
|
|
|
Goodwill
|
6,113
|
|
|
Intangible assets
|
8,638
|
|
|
Total assets acquired
|
16,555
|
|
|
Accounts payable
|
404
|
|
|
Warranty liabilities
|
532
|
|
|
Other liabilities
|
119
|
|
|
Total liabilities acquired
|
1,055
|
|
|
Net assets acquired
|
$
|
15,500
|
|
|
|
Estimated
|
|
|
||
|
|
Useful Life
|
|
|
||
Developed technologies
|
|
10 years
|
|
$
|
4,829
|
|
Customer relationships
|
|
7 years
|
|
2,413
|
|
|
Trade name/trademarks
|
|
Indefinite-Lived
|
|
1,396
|
|
|
|
|
|
|
$
|
8,638
|
|
|
January 3, 2015
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
U.S. Treasury securities
|
$
|
32,507
|
|
|
$
|
12
|
|
|
$
|
(23
|
)
|
|
$
|
32,496
|
|
Corporate bonds
|
35,409
|
|
|
2
|
|
|
(36
|
)
|
|
35,375
|
|
||||
U.S. Agency bonds
|
22,545
|
|
|
4
|
|
|
(10
|
)
|
|
22,539
|
|
||||
Municipal bonds
|
11,157
|
|
|
2
|
|
|
(5
|
)
|
|
11,154
|
|
||||
Commercial paper
|
12,487
|
|
|
—
|
|
|
(1
|
)
|
|
12,486
|
|
||||
|
$
|
114,105
|
|
|
$
|
20
|
|
|
$
|
(75
|
)
|
|
$
|
114,050
|
|
|
December 28, 2013
|
||||||||||||||
|
Amortized
Cost
|
|
Unrealized
Gains
|
|
Unrealized
Losses
|
|
Fair
Value
|
||||||||
U.S. Treasury securities
|
$
|
23,975
|
|
|
$
|
15
|
|
|
$
|
(1
|
)
|
|
$
|
23,989
|
|
Corporate bonds
|
35,804
|
|
|
3
|
|
|
(23
|
)
|
|
35,784
|
|
||||
U.S. Agency bonds
|
19,517
|
|
|
10
|
|
|
(4
|
)
|
|
19,523
|
|
||||
Municipal bonds
|
7,474
|
|
|
23
|
|
|
(2
|
)
|
|
7,495
|
|
||||
|
$
|
86,770
|
|
|
$
|
51
|
|
|
$
|
(30
|
)
|
|
$
|
86,791
|
|
|
January 3, 2015
|
|
December 28, 2013
|
||||||||||||
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
Marketable debt securities – current (due in less than one year)
|
$
|
69,607
|
|
|
$
|
69,609
|
|
|
$
|
52,122
|
|
|
$
|
52,159
|
|
Marketable debt securities – non-current (due in one to two years)
|
44,498
|
|
|
44,441
|
|
|
34,648
|
|
|
34,632
|
|
||||
|
$
|
114,105
|
|
|
$
|
114,050
|
|
|
$
|
86,770
|
|
|
$
|
86,791
|
|
|
January 3,
2015 |
|
December 28,
2013 |
||||
Raw materials
|
$
|
10,220
|
|
|
$
|
7,118
|
|
Work in progress
|
411
|
|
|
505
|
|
||
Finished goods
|
42,904
|
|
|
32,529
|
|
||
|
$
|
53,535
|
|
|
$
|
40,152
|
|
|
|
January 3,
2015 |
|
December 28,
2013 |
||||
Land
|
|
$
|
1,999
|
|
|
$
|
1,999
|
|
Leasehold improvements
|
|
89,203
|
|
|
84,659
|
|
||
Furniture and equipment
|
|
59,587
|
|
|
46,226
|
|
||
Production machinery, computer equipment and software
|
|
122,913
|
|
|
106,072
|
|
||
Property under capital lease
|
|
1,077
|
|
|
1,672
|
|
||
Construction in progress
|
|
56,937
|
|
|
32,670
|
|
||
Less: Accumulated depreciation and amortization
|
|
(166,263
|
)
|
|
(143,756
|
)
|
||
|
|
$
|
165,453
|
|
|
$
|
129,542
|
|
|
Twelve Months Ended
|
|
Twelve Months Ended
|
|||||||||||||
|
January 3, 2015
|
|
December 28, 2013
|
|||||||||||||
|
Goodwill
|
|
Indefinite-Lived
Trade Name/ Trademarks |
|
Goodwill
|
|
Indefinite-Lived
Trade Name/ Trademarks |
|||||||||
Beginning balance
|
$
|
8,963
|
|
|
$
|
1,396
|
|
|
$
|
2,850
|
|
|
$
|
—
|
|
|
Comfortaire purchase
|
—
|
|
|
—
|
|
|
6,113
|
|
|
1,396
|
|
|||||
Ending balance
|
$
|
8,963
|
|
|
$
|
1,396
|
|
|
$
|
8,963
|
|
|
$
|
1,396
|
|
|
January 3, 2015
|
|
December 28, 2013
|
||||||||||||
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Developed technologies
|
$
|
5,231
|
|
|
$
|
1,342
|
|
|
$
|
5,231
|
|
|
$
|
850
|
|
Customer relationships
|
2,413
|
|
|
675
|
|
|
2,413
|
|
|
330
|
|
||||
Trade names/trademarks
|
101
|
|
|
101
|
|
|
101
|
|
|
101
|
|
||||
|
$
|
7,745
|
|
|
$
|
2,118
|
|
|
$
|
7,745
|
|
|
$
|
1,281
|
|
Facility Rents:
|
|
2014
|
|
2013
|
|
2012
|
||||||
Minimum rents
|
|
$
|
47,754
|
|
|
$
|
41,816
|
|
|
$
|
36,104
|
|
Contingent rents
|
|
6,241
|
|
|
5,779
|
|
|
9,813
|
|
|||
Total
|
|
$
|
53,995
|
|
|
$
|
47,595
|
|
|
$
|
45,917
|
|
|
|
|
|
|
|
|
||||||
Equipment Rents
|
|
$
|
3,609
|
|
|
$
|
2,694
|
|
|
$
|
2,627
|
|
2015
|
|
$
|
48,366
|
|
2016
|
|
44,813
|
|
|
2017
|
|
39,188
|
|
|
2018
|
|
28,236
|
|
|
2019
|
|
18,679
|
|
|
Thereafter
|
|
53,567
|
|
|
Total future minimum lease payments
|
|
$
|
232,849
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Stock options
|
|
$
|
2,125
|
|
|
$
|
2,698
|
|
|
$
|
3,688
|
|
Stock awards
|
|
4,673
|
|
|
1,534
|
|
|
6,618
|
|
|||
Total stock-based compensation expense
(1)(2)
|
|
6,798
|
|
|
4,232
|
|
|
10,306
|
|
|||
Income tax benefit
|
|
2,284
|
|
|
1,447
|
|
|
3,576
|
|
|||
Total stock-based compensation expense, net of tax
|
|
$
|
4,514
|
|
|
$
|
2,785
|
|
|
$
|
6,730
|
|
|
|
Stock
Options
|
|
Weighted-
Average
Exercise
Price per
Share
|
|
Weighted-
Average
Remaining
Contractual
Term (years)
|
|
Aggregate
Intrinsic
Value
(1)
|
|||||
Outstanding at December 28, 2013
|
|
1,754
|
|
|
$
|
15.77
|
|
|
5.6
|
|
$
|
11,812
|
|
Granted
|
|
201
|
|
|
17.96
|
|
|
|
|
|
|
||
Exercised
|
|
(244
|
)
|
|
12.15
|
|
|
|
|
|
|
||
Canceled/Forfeited
|
|
(198
|
)
|
|
20.19
|
|
|
|
|
|
|
||
Outstanding at January 3, 2015
|
|
1,513
|
|
|
$
|
16.06
|
|
|
5.6
|
|
$
|
16,642
|
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at January 3, 2015
|
|
1,088
|
|
|
$
|
14.32
|
|
|
4.5
|
|
$
|
13,800
|
|
|
|
|
|
|
|
|
|
|
|||||
Vested and expected to vest at January 3, 2015
|
|
1,455
|
|
|
$
|
15.86
|
|
|
5.5
|
|
$
|
16,279
|
|
(1)
|
Aggregate intrinsic value includes only those options where the current share price is equal to or greater than the share price on the date of grant.
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Weighted-average grant date fair value of stock options granted
|
|
$
|
9.33
|
|
|
$
|
10.57
|
|
|
$
|
14.28
|
|
Total intrinsic value (at exercise) of stock options exercised
|
|
$
|
2,478
|
|
|
$
|
7,726
|
|
|
$
|
12,724
|
|
Valuation Assumptions
|
|
2014
|
|
2013
|
|
2012
|
|||
Expected dividend yield
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
Expected volatility
|
|
58
|
%
|
|
61
|
%
|
|
63
|
%
|
Risk-free interest rate
|
|
1.8
|
%
|
|
0.9
|
%
|
|
1.1
|
%
|
Expected term (in years)
|
|
5.3
|
|
|
5.7
|
|
|
5.6
|
|
|
|
Time-
Based
Stock
Awards
|
|
Weighted-Average
Grant Date
Fair Value
|
|
Performance- and
Market-Based
Stock Awards
|
|
Weighted-Average
Grant Date
Fair Value
|
||||
Outstanding at December 28, 2013
|
|
239
|
|
|
$18.86
|
|
461
|
|
|
$17.39
|
||
Granted
|
|
319
|
|
|
17.96
|
|
|
409
|
|
|
17.75
|
|
Vested
|
|
(60
|
)
|
|
13.30
|
|
|
(130
|
)
|
|
9.05
|
|
Canceled/Forfeited
|
|
(26
|
)
|
|
18.04
|
|
|
(110
|
)
|
|
18.23
|
|
Outstanding at January 3, 2015
|
|
472
|
|
|
$19.00
|
|
630
|
|
|
$18.61
|
||
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Amount repurchased under Board-approved share repurchase program
|
|
$
|
45,044
|
|
|
$
|
40,037
|
|
|
$
|
30,023
|
|
Amount repurchased in connection with the vesting of employee restricted stock grants
|
|
1,448
|
|
|
2,035
|
|
|
4,869
|
|
|||
Total amount repurchased
|
|
$
|
46,492
|
|
|
$
|
42,072
|
|
|
$
|
34,892
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
67,974
|
|
|
$
|
60,081
|
|
|
$
|
78,094
|
|
|
|
|
|
|
|
||||||
Reconciliation of weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||
Basic weighted-average shares outstanding
|
53,452
|
|
|
54,866
|
|
|
55,516
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Options
|
387
|
|
|
554
|
|
|
1,059
|
|
|||
Restricted shares
|
354
|
|
|
383
|
|
|
501
|
|
|||
Diluted weighted-average shares outstanding
|
54,193
|
|
|
55,803
|
|
|
57,076
|
|
|||
|
|
|
|
|
|
||||||
Net income per share – basic
|
$
|
1.27
|
|
|
$
|
1.10
|
|
|
$
|
1.41
|
|
Net income per share – diluted
|
$
|
1.25
|
|
|
$
|
1.08
|
|
|
$
|
1.37
|
|
|
2014
|
|
2013
|
|
2012
|
||||||
Interest income
|
$
|
415
|
|
|
$
|
375
|
|
|
310
|
|
|
Interest expense
|
(53
|
)
|
|
(52
|
)
|
|
(92
|
)
|
|||
Other income, net
|
$
|
362
|
|
|
$
|
323
|
|
|
$
|
218
|
|
Current:
|
|
2014
|
|
2013
|
|
2012
|
||||||
Federal
|
|
$
|
29,484
|
|
|
$
|
25,091
|
|
|
$
|
34,993
|
|
State
|
|
4,161
|
|
|
3,802
|
|
|
3,419
|
|
|||
|
|
33,645
|
|
|
28,893
|
|
|
38,412
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|
|||
Federal
|
|
747
|
|
|
1,953
|
|
|
2,176
|
|
|||
State
|
|
(258
|
)
|
|
84
|
|
|
1,323
|
|
|||
|
|
489
|
|
|
2,037
|
|
|
3,499
|
|
|||
Income tax expense
|
|
$
|
34,134
|
|
|
$
|
30,930
|
|
|
$
|
41,911
|
|
|
|
2014
|
|
2013
|
|
2012
|
|||
Statutory federal income tax
|
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
|
2.5
|
|
|
3.0
|
|
|
2.9
|
|
Manufacturing deduction
|
|
(3.3
|
)
|
|
(3.2
|
)
|
|
(3.1
|
)
|
Changes in unrecognized tax benefits
|
|
0.3
|
|
|
0.3
|
|
|
(0.2
|
)
|
Other
|
|
(1.1
|
)
|
|
(1.1
|
)
|
|
0.3
|
|
Effective income tax rate
|
|
33.4
|
%
|
|
34.0
|
%
|
|
34.9
|
%
|
Deferred tax assets:
|
|
2014
|
|
2013
|
||||
Current:
|
|
|
|
|
||||
Warranty and returns liabilities
|
|
$
|
5,753
|
|
|
$
|
4,376
|
|
Compensation and benefits
|
|
1,545
|
|
|
1,379
|
|
||
Deferred rent and lease incentives
|
|
991
|
|
|
857
|
|
||
Other
|
|
709
|
|
|
539
|
|
||
Long-term:
|
|
|
|
|
|
|||
Stock-based compensation
|
|
6,843
|
|
|
5,944
|
|
||
Deferred rent and lease incentives
|
|
5,527
|
|
|
4,524
|
|
||
Warranty liabilities
|
|
1,051
|
|
|
605
|
|
||
Net operating loss and capital loss carryforwards
|
|
649
|
|
|
827
|
|
||
Other
|
|
—
|
|
|
1,111
|
|
||
Total gross deferred tax assets
|
|
23,068
|
|
|
20,162
|
|
||
Valuation allowance
|
|
(552
|
)
|
|
(587
|
)
|
||
Total deferred tax assets after valuation allowance
|
|
22,516
|
|
|
19,575
|
|
||
Deferred tax liabilities:
|
|
|
|
|
||||
Long-term:
|
|
|
|
|
||||
Property and equipment
|
|
9,873
|
|
|
7,696
|
|
||
Other
|
|
424
|
|
|
—
|
|
||
Total gross deferred tax liabilities
|
|
10,297
|
|
|
7,696
|
|
||
Net deferred tax assets
|
|
$
|
12,219
|
|
|
$
|
11,879
|
|
2014
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Fiscal
Year
|
||||||||||
Net sales
|
|
$
|
276,412
|
|
|
$
|
234,763
|
|
|
$
|
323,366
|
|
|
$
|
322,216
|
|
|
$
|
1,156,757
|
|
Gross profit
|
|
171,383
|
|
|
142,397
|
|
|
198,584
|
|
|
194,486
|
|
|
706,850
|
|
|||||
Operating income
|
|
25,802
|
|
|
12,711
|
|
|
35,346
|
|
|
27,887
|
|
|
101,746
|
|
|||||
Net income
|
|
16,992
|
|
|
8,481
|
|
|
23,554
|
|
|
18,947
|
|
|
67,974
|
|
|||||
Net income per share – diluted
|
|
0.31
|
|
|
0.16
|
|
|
0.44
|
|
|
0.35
|
|
|
1.25
|
|
2013
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
|
Fiscal
Year
|
||||||||||
Net sales
|
|
$
|
258,237
|
|
|
$
|
207,391
|
|
|
$
|
263,689
|
|
|
$
|
230,854
|
|
|
$
|
960,171
|
|
Gross profit
|
|
163,416
|
|
|
131,398
|
|
|
166,420
|
|
|
140,521
|
|
|
601,755
|
|
|||||
Operating income
|
|
35,227
|
|
|
15,107
|
|
|
30,699
|
|
|
9,655
|
|
|
90,688
|
|
|||||
Net income
|
|
23,471
|
|
|
9,926
|
|
|
20,259
|
|
|
6,425
|
|
|
60,081
|
|
|||||
Net income per share – diluted
|
|
0.42
|
|
|
0.18
|
|
|
0.36
|
|
|
0.12
|
|
|
1.08
|
|
1.
|
Select Comfort Corporation 2004 Stock Incentive Plan (Amended and Restated as of January 1, 2007)
|
2.
|
Form of Nonstatutory Stock Option Award Agreement under the 2004 Stock Incentive Plan
|
3.
|
Form of Restricted Stock Award Agreement under the 2004 Stock Incentive Plan
|
4.
|
Form of Performance Stock Award Agreement under the 2004 Stock Incentive Plan
|
5.
|
Form of Nonstatutory Stock Option Award Agreement (Subject to Performance Adjustment) under the 2004 Stock Incentive Plan
|
6.
|
Select Comfort Corporation Amended and Restated 2010 Omnibus Incentive Plan
|
7.
|
Form of Nonstatutory Stock Option Award Agreement under the 2010 Omnibus Incentive Plan
|
8.
|
Form of Restricted Stock Award Agreement under the 2010 Omnibus Incentive Plan
|
9.
|
Form of Performance Stock Award Agreement under the 2010 Omnibus Incentive Plan
|
10.
|
Select Comfort Executive Investment Plan (December 1, 2014 Restatement)
|
11.
|
Employment Offer Letter from Select Comfort Corporation to Shelly R. Ibach dated February 9, 2007
|
12.
|
Employment Offer Letter from Select Comfort Corporation to David R. Callen dated March 14, 2014
|
13.
|
Employment Offer Letter from Select Comfort Corporation to Kathryn V. Roedel dated March 8, 2005
|
14.
|
Employment offer Letter from Select Comfort Corporation to Wendy L. Schoppert dated March 15, 2005
|
15.
|
Employment Offer Letter from Select Comfort Corporation to Mark A. Kimball dated April 22, 1999
|
16.
|
Select Comfort Corporation Executive Physical Plan
|
17.
|
Summary of Executive Tax and Financial Planning Program
|
18.
|
Amended and Restated Select Comfort Corporation Executive Severance Pay Plan
|
19.
|
First Amendment to Amended and Restated Select Comfort Corporation Executive Severance Pay Plan
|
20.
|
Summary of Non-Employee Director Compens
ation
|
|
|
SELECT COMFORT CORPORATION
|
|
||
|
|
(Registrant)
|
|
||
|
|
|
|
||
Dated:
|
February 27, 2015
|
By:
|
|
/s/ Shelly R. Ibach
|
|
|
|
|
|
Shelly R. Ibach
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
|
(principal executive officer)
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ David R. Callen
|
|
|
|
|
|
David R. Callen
|
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
|
(principal financial officer)
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Robert J. Poirier
|
|
|
|
|
|
Robert J. Poirier
|
|
|
|
|
|
Chief Accounting Officer
|
|
|
|
|
|
(principal accounting officer)
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Jean-Michel Valette
|
|
Chairman of the Board
|
|
February 25, 2015
|
Jean-Michel Valette
|
|
|
|
|
|
|
|
|
|
/s/ Shelly R. Ibach
|
|
Director
|
|
February 27, 2015
|
Shelly R. Ibach
|
|
|
|
|
|
|
|
|
|
/s/ Daniel I. Alegre
|
|
Director
|
|
February 26, 2015
|
Daniel I. Alegre
|
|
|
|
|
|
|
|
|
|
/s/ Stephen L. Gulis, Jr.
|
|
Director
|
|
February 25, 2015
|
Stephen L. Gulis, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Michael J. Harrison
|
|
Director
|
|
February 24, 2015
|
Michael J. Harrison
|
|
|
|
|
|
|
|
|
|
/s/ David T. Kollat
|
|
Director
|
|
February 21, 2015
|
David T. Kollat
|
|
|
|
|
|
|
|
|
|
/s/ Brenda J. Lauderback
|
|
Director
|
|
February 22, 2015
|
Brenda J. Lauderback
|
|
|
|
|
|
|
|
|
|
/s/ Kathleen L. Nedorostek
|
|
Director
|
|
February 24, 2015
|
Kathleen L. Nedorostek
|
|
|
|
|
|
|
|
|
|
/s/ Michael A. Peel
|
|
Director
|
|
February 26, 2015
|
Michael A. Peel
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
Method of Filing
|
|
|
|
|
|
3.1
|
|
Third Restated Articles of Incorporation of the Company, as amended
|
|
Incorporated by reference to Exhibit 3.1 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended January 1, 2000 (File No. 0-25121)
|
|
|
|
|
|
3.2
|
|
Articles of Amendment to Third Restated Articles of Incorporation of the Company
|
|
Incorporated by reference to Exhibit 3.1 contained in Select Comfort's Current Report on Form 8-K filed May 16, 2006 (File No. 0-25121)
|
|
|
|
|
|
3.3
|
|
Articles of Amendment to Third Restated Articles of Incorporation of the Company
|
|
Incorporated by reference to Exhibit 3.1 contained in Select Comfort's Current Report on Form 8-K filed May 25, 2010 (File No. 0-25121)
|
|
|
|
|
|
3.4
|
|
Restated Bylaws of the Company
|
|
Incorporated by reference to Exhibit 3.1 contained in Select Comfort's Current Report on Form 8-K filed December 20, 2010 (File No. 0-25121)
|
|
|
|
|
|
10.1
|
|
Net Lease Agreement dated December 3, 1993 between the Company and Opus Corporation
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Registration Statement on Form S-1, as amended (Reg. No. 333-62793)
|
|
|
|
|
|
10.2
|
|
Amendment of Lease dated August 10, 1994 between the Company and Opus Corporation
|
|
Incorporated by reference to Exhibit 10.2 contained in the Select Comfort's Registration Statement on Form S-1, as amended (Reg. No. 333-62793)
|
|
|
|
|
|
10.3
|
|
Second Amendment to Lease dated May 10, 1995 between the Company and Rushmore Plaza Partners Limited Partnership (successor to Opus Corporation)
|
|
Incorporated by reference to Exhibit 10.3 contained in Select Comfort's Registration Statement on Form S-1, as amended (Reg. No. 333-62793)
|
|
|
|
|
|
10.4
|
|
Letter Agreement dated as of October 5, 1995 between the Company and Rushmore Plaza Partners Limited Partnership
|
|
Incorporated by reference to Exhibit 10.4 contained in Select Comfort's Registration Statement on Form S-1, as amended (Reg. No. 333-62793)
|
|
|
|
|
|
10.5
|
|
Third Amendment of Lease, Assignment and Assumption of Lease and Consent dated as of January 1, 1996 among the Company, Rushmore Plaza Partners Limited Partnership and Select Comfort Direct Corporation
|
|
Incorporated by reference to Exhibit 10.5 contained in Select Comfort's Registration Statement on Form S-1, as amended (Reg. No. 333-62793)
|
|
|
|
|
|
10.6
|
|
Fourth Amendment to Lease dated June 30, 2003 between Cabot Industrial Properties, L.P. (successor to Rushmore Plaza Partners Limited Partnership) and Select Comfort Direct Corporation
|
|
Incorporated by reference to Exhibit 10.6 contained in Select Comfort's Annual report on Form 10-K for the fiscal year ended January 3, 2004 (File No. 0-25121)
|
|
|
|
|
|
10.7
|
|
Fifth Amendment to Lease dated August 28, 2006 between Cabot Industrial Properties, L.P. (successor to Rushmore Plaza Partners Limited Partnership) and Select Comfort Direct Corporation
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Quarterly report on Form 10-Q for the quarter ended September 30, 2006 (File No. 0-25121)
|
|
|
|
|
|
10.8
|
|
Lease Agreement dated as of September 19, 2002 between the Company and Blind John, LLC (as successor to Frastacky (US) Properties Limited Partnership)
|
|
Incorporated by reference to Exhibit 10.6 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 28, 2002 (File No. 0-25121)
|
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
Method of Filing
|
10.9
|
|
Amendment Three to Lease between Select Comfort Corporation and Blind John, LLC dated February 28, 2012
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed March 2, 2012 (File No. 0-25121)
|
|
|
|
|
|
10.10
|
|
Lease Agreement dated September 30, 1998 between the Company and ProLogis Development Services Incorporated
|
|
Incorporated by reference to Exhibit 10.12 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 28, 2002 (File No. 0-25121)
|
|
|
|
|
|
10.11
|
|
Net Lease Agreement (Build-to-Suit) by and between Opus Northwest LLC, as Landlord, and Select Comfort Corporation, as Tenant, dated July 26, 2006
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Quarterly report on Form 10-Q for the quarter ended July 1, 2006 (File No. 0-25121)
|
|
|
|
|
|
10.12
|
|
Select Comfort Corporation 2004 Stock Incentive Plan (Amended and Restated as of January 1, 2007)
|
|
Incorporated by reference to Exhibit 10.16 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 30, 2006 (File No. 0-25121)
|
|
|
|
|
|
10.13
|
|
Form of Nonstatutory Stock Option Award Agreement under the Select Comfort Corporation 2004 Stock Incentive Plan
|
|
Incorporated by reference to Exhibit 10.28 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 0-25121)
|
|
|
|
|
|
10.14
|
|
Form of Restricted Stock Award Agreement under the Select Comfort Corporation 2004 Stock Incentive Plan
|
|
Incorporated by reference to Exhibit 10.29 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 0-25121)
|
|
|
|
|
|
10.15
|
|
Form of Performance Stock Award Agreement under the Select Comfort Corporation 2004 Stock Incentive Plan
|
|
Incorporated by reference to Exhibit 10.30 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 0-25121)
|
|
|
|
|
|
10.16
|
|
Form of Nonstatutory Stock Option Award Agreement (Subject to Performance Adjustment) under the Select Comfort Corporation 2004 Stock Incentive Plan
|
|
Incorporated by reference to Exhibit 10.20 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 30, 2006 (File No. 0-25121)
|
|
|
|
|
|
10.17
|
|
Select Comfort Corporation Amended and Restated 2010 Omnibus Incentive Plan
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed May 15, 2013 (File No. 0-25121)
|
|
|
|
|
|
10.18
|
|
Form of Nonstatutory Stock Option Award Agreement under the 2010 Omnibus Incentive Plan
|
|
Incorporated by reference to Exhibit 10.20 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended January 1, 2011 (File No. 0-25121)
|
|
|
|
|
|
10.19
|
|
Form of Restricted Stock Award Agreement under the 2010 Omnibus Incentive Plan
|
|
Incorporated by reference to Exhibit 10.21 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended January 1, 2011 (File No. 0-25121)
|
|
|
|
|
|
10.20
|
|
Form of Performance Stock Award Agreement under the 2010 Omnibus Incentive Plan
|
|
Incorporated by reference to Exhibit 10.22 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended January 1, 2011 (File No. 0-25121)
|
|
|
|
|
|
10.21
|
|
Select Comfort Executive Investment Plan (December 1, 2014 Restatement)
|
|
Filed herewith
|
Exhibit
No.
|
|
Description
|
|
Method of Filing
|
|
|
|
|
|
10.22
|
|
Employment Offer Letter from Select Comfort Corporation to Shelly R. Ibach dated February 9, 2007
|
|
Incorporated by reference to Exhibit 10.30 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 29, 2012 (File No. 0-25121)
|
|
|
|
|
|
10.23
|
|
Employment Offer Letter from Select Comfort Corporation to David R. Callen dated March 14, 2014
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed March 20, 2014
|
|
|
|
|
|
10.24
|
|
Employment Offer Letter from Select Comfort Corporation to Kathryn V. Roedel dated March 8, 2005
|
|
Incorporated by reference to Exhibit 10.17 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 0-25121)
|
|
|
|
|
|
10.25
|
|
Employment Offer Letter from Select Comfort Corporation to Wendy L. Schoppert dated March 15, 2005
|
|
Incorporated by reference to Exhibit 10.18 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (File No. 0-25121)
|
|
|
|
|
|
10.26
|
|
Employment Offer Letter from Select Comfort Corporation to Mark A. Kimball dated April 22, 1999
|
|
Incorporated by reference to Exhibit 10.25 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended January 1, 2000 (File No. 0-25121)
|
|
|
|
|
|
10.27
|
|
Select Comfort Corporation Executive Physical Plan
|
|
Filed herewith
|
|
|
|
|
|
10.28
|
|
Summary of Executive Tax and Financial Planning Program
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed January 3, 2005 (File No. 0-25121)
|
|
|
|
|
|
10.29
|
|
Amended and Restated Select Comfort Corporation Executive Severance Pay Plan
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed August 21, 2008 (File No. 0-25121)
|
|
|
|
|
|
10.30
|
|
First Amendment to Amended and Restated Select Comfort Corporation Executive Severance Pay Plan
|
|
Incorporated by reference to Exhibit 10.34 contained in Select Comfort's Annual Report on Form 10-K for the fiscal year ended January 3, 2009 (File No. 0-25121)
|
|
|
|
|
|
10.31
|
|
Summary of Non-Employee Director Compensation
|
|
Filed herewith
|
|
|
|
|
|
10.32
|
|
Master Supply Agreement dated July 16, 2013 between the Company and Supplier
(1)
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Quarterly Report on Form 10-Q for the quarter ended September 28, 2013 (File No. 0-25121)
|
|
|
|
|
|
10.33
|
|
Retailer Program Agreement effective as of January 1, 2014 by and between Synchrony Bank, Select Comfort Corporation and Select Comfort Retail Corporation
(1)
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Quarterly Report on Form 10-Q for the quarter ended June 28, 2014 (File No. 0-25121)
|
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
Method of Filing
|
10.34
|
|
First Amendment to Retailer Program Agreement, dated effective as of October 1, 2014 by and between Synchrony Bank, Select Comfort Corporation and Select Comfort Retail Corporation
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed October 1, 2014 (File No. 0-25121)
|
|
|
|
|
|
10.35
|
|
Select Comfort Corporation Non-Employee Director Deferral Plan
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed September 16, 2011 (File No. 0-25121)
|
|
|
|
|
|
10.36
|
|
Credit Agreement, dated March 26, 2010, by and among Select Comfort Corporation and Wells Fargo Bank, National Association
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed March 29, 2010 (File No. 0-25121)
|
|
|
|
|
|
10.37
|
|
Amendment to Credit Agreement, dated April 23, 2012, by and among Select Comfort Corporation and Wells Fargo Bank, National Association
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed April 24, 2012 (File No. 0-25121)
|
|
|
|
|
|
10.38
|
|
Amendment to Credit Agreement, dated October 15, 2013, by and among Select Comfort Corporation and Wells Fargo Bank, National Association
|
|
Incorporated by reference to Exhibit 10.1 contained in Select Comfort's Current Report on Form 8-K filed October 18, 2013 (File No. 0-25121)
|
|
|
|
|
|
21.1
|
|
Subsidiaries of the Company
|
|
Incorporated by reference to Exhibit 21.1 contained in Select Comfort's Annual Report on Form 10-K filed February 21, 2013 (File No. 0-25121)
|
|
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm
|
|
Filed herewith
|
|
|
|
|
|
24.1
|
|
Power of Attorney
|
|
Included on signature page
|
|
|
|
|
|
31.1
|
|
Certification of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
31.2
|
|
Certification of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
32.1
|
|
Certification of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
Furnished herewith
(2)
|
|
|
|
|
|
32.2
|
|
Certification of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350
|
|
Furnished herewith
(2)
|
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
Method of Filing
|
101
|
|
The following financial information from the Company's Annual Report on Form 10-K for the year ended January 3, 2015, filed with the SEC on February 27, 2015, formatted in eXtensible Business Reporting Language: (i) Consolidated Balance Sheets as of January 3, 2015 and December 28, 2013; (ii) Consolidated Statements of Operations for the years ended January 3, 2015, December 28, 2013 and December 29, 2012; (iii) Consolidated Statements of Comprehensive Income for the years ended January 3, 2015, December 28, 2013 and December 29, 2012; (iv) Consolidated Statement of Shareholders' Equity for the years ended January 3, 2015, December 28, 2013 and December 29, 2012; (v) Consolidated Statements of Cash Flows for the years ended January 3, 2015, December 28, 2013 and December 29, 2012; and (vi) Notes to Consolidated Financial Statements.
|
|
Filed herewith
|
(1)
|
Confidential treatment has been requested by the issuer with respect to designated portions contained within document. Such portions have been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities and Exchange Act of 1934, as amended.
|
(2)
|
This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Act of 1934, as amended, (15 U.S.C. 78r) or otherwise subject to the liability of that section. Such exhibit will not be deemed to be incorporated by reference into any document filed under the Securities Act of 1933, as amended, or under the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in any such filing.
|
Description
|
|
2014
|
|
2013
|
|
2012
|
||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
$
|
425
|
|
|
$
|
348
|
|
|
$
|
397
|
|
Additions charged to costs and expenses
|
|
729
|
|
|
776
|
|
|
246
|
|
|||
Deductions from reserves
|
|
(415
|
)
|
|
(699
|
)
|
|
(295
|
)
|
|||
Balance at end of period
|
|
$
|
739
|
|
|
$
|
425
|
|
|
$
|
348
|
|
|
|
|
|
|
|
|
||||||
Accrued sales returns
|
|
|
|
|
|
|
||||||
Balance at beginning of period
|
|
$
|
9,433
|
|
|
$
|
5,330
|
|
|
$
|
4,402
|
|
Additions charged to costs and expenses
|
|
78,890
|
|
|
59,656
|
|
|
44,284
|
|
|||
Deductions from reserves
|
|
(73,061
|
)
|
|
(55,553
|
)
|
|
(43,356
|
)
|
|||
Balance at end of period
|
|
$
|
15,262
|
|
|
$
|
9,433
|
|
|
$
|
5,330
|
|
|
|
Page
|
||
ARTICLE 1.
DESCRIPTION
|
1
|
|
||
1.1
|
|
Plan Name.
|
1
|
|
1.2
|
|
Plan Purpose.
|
1
|
|
1.3
|
|
Plan Type.
|
1
|
|
1.4
|
|
Plan Effective Date.
|
1
|
|
|
|
|
||
ARTICLE 2.
PARTICIPATION
|
2
|
|
||
2.1
|
|
Eligibility.
|
2
|
|
2.2
|
|
Loss of Eligibility.
|
2
|
|
2.3
|
|
Transfer Among Participating Employers.
|
3
|
|
2.4
|
|
Multiple Employment.
|
3
|
|
2.5
|
|
Conditions of Participation.
|
3
|
|
2.6
|
|
Termination of Participation.
|
3
|
|
|
|
|
||
ARTICLE 3.
BENEFITS
|
4
|
|
||
3.1
|
|
Participant Accounts.
|
4
|
|
3.2
|
|
Participant Deferral Credits - Savings Account.
|
4
|
|
3.3
|
|
Participant Deferral Credits - Fixed Period (Strategy 1) Account.
|
5
|
|
3.4
|
|
Participant Deferral Credits - Fixed Period (Strategy 2) Account.
|
6
|
|
3.5
|
|
Participating Employer Credits.
|
6
|
|
3.6
|
|
Earnings Credits.
|
6
|
|
3.7
|
|
Vesting.
|
8
|
|
3.8
|
|
Restricted Stock Unit Deferrals.
|
8
|
|
|
|
|
||
ARTICLE 4.
DISTRIBUTION
|
10
|
|
||
4.1
|
|
Distribution to Participant Before Termination Date.
|
10
|
|
4.2
|
|
Distribution of Savings and Retirement Accounts to Participant After Termination Date.
|
10
|
|
4.3
|
|
Distribution of Fixed Period (Strategy 1) and Fixed Period (Strategy 2) Accounts to Participant.
|
11
|
|
4.4
|
|
Distribution of Stock Unit Account.
|
11
|
|
4.5
|
|
Distribution to Beneficiary.
|
12
|
|
4.6
|
|
Nondeductibility.
|
13
|
|
4.7
|
|
Five-Year Redeferral Election.
|
13
|
|
4.8
|
|
Installment Distributions.
|
14
|
|
4.9
|
|
Payment in Event of Incapacity.
|
14
|
|
4.10
|
|
Six-Month Suspension for Specified Employees.
|
14
|
|
|
|
|
||
ARTICLE 5.
SOURCE OF PAYMENTS; NATURE OF INTEREST
|
15
|
|
||
5.1
|
|
Establishment of Trust.
|
15
|
|
5.2
|
|
Source of Payments.
|
15
|
|
5.3
|
|
Status of Plan.
|
15
|
|
5.4
|
|
Non-assignability of Benefits.
|
15
|
|
|
|
|
||
ARTICLE 6.
AMENDMENT, TERMINATION
|
16
|
|
||
6.1
|
|
Adoption.
|
16
|
|
6.2
|
|
Amendment.
|
16
|
|
6.3
|
|
Termination of Participation.
|
16
|
|
6.4
|
|
Termination.
|
17
|
|
|
|
|
||
ARTICLE 7.
DEFINITIONS, CONSTRUCTION AND INTERPRETATION
|
18
|
|
||
7.1
|
|
Cross Reference.
|
18
|
|
7.2
|
|
Governing Law.
|
18
|
|
7.3
|
|
Headings.
|
18
|
|
7.4
|
|
Number and Gender.
|
18
|
|
7.5
|
|
Definitions.
|
18
|
|
|
|
|
||
ARTICLE 8.
ADMINISTRATION
|
22
|
|
||
8.1
|
|
Administrator.
|
22
|
|
8.2
|
|
Plan Rules and Regulations.
|
22
|
|
8.3
|
|
Administrator’s Discretion.
|
22
|
|
8.4
|
|
Specialist’s Assistance.
|
22
|
|
8.5
|
|
Indemnification.
|
22
|
|
8.6
|
|
Benefit Claim Procedure.
|
23
|
|
8.7
|
|
Disputes.
|
24
|
|
|
|
|
||
ARTICLE 9.
MISCELLANEOUS
|
25
|
|
||
9.1
|
|
Withholding and Offsets.
|
25
|
|
9.2
|
|
Other Benefits.
|
25
|
|
9.3
|
|
No Warranties Regarding Tax Treatment.
|
25
|
|
9.4
|
|
No Rights to Continued Employment or Service Created.
|
25
|
|
9.5
|
|
Special Provisions.
|
25
|
|
9.6
|
|
Successors.
|
25
|
|
(i)
|
No Qualified Employees were eligible to defer Base Salary or Bonus during the 2009, 2010 and 2011 Plan Years and the first six months of the 2012 Plan Year and no Participating Employer credits were made to the any Retirement Plan Accounts during such time periods.
|
(ii)
|
Prior to July 1, 2012, the Administrator will determine which Qualified Employees, if any, are eligible to defer Base Salary pursuant to Section 3.2(a)(iii) with respect to the period from July 1, 2012 to December 31, 2012 (the “2012 Partial Plan Year Service Period”). At any time during the 2012 Partial Plan Year Service Period, the Administrator may determine that an individual who becomes a Qualified Employee after July 1, 2012 is eligible to defer Base Salary pursuant to Section 3.2(a)(iii) with respect to the remainder of such period.
|
(b)
|
First Day of Plan Year
. Prior to the beginning of each Plan Year beginning on or after January 1, 2013, the Administrator will determine which Qualified Employees, if any, are eligible to defer Base Salary pursuant to Section 3.2(a) and Bonus pursuant to Section 3.2(b) with respect to the Plan Year.
|
(c)
|
During Plan Year
. At any time during a Plan Year beginning on or after January 1, 2013, the Administrator may determine that an individual who becomes a Qualified Employee after the first day of a Plan Year is eligible to defer Base Salary pursuant to Section 3.2(a) and in accordance with Plan Rules (such determining the first payroll date such Qualified Employee will be eligible to defer Base Salary) with respect to the remainder of the Plan Year.
|
(d)
|
Annual Determination
. The fact that an individual has been eligible to make deferral elections with respect to any particular Plan Year does not give the individual any right to make deferral elections with respect to any other Plan Year.
|
(i)
|
Ceasing to be Qualified Employee
. An Active Participant will cease to be eligible to defer Base Salary and Bonus as of the date on which he or she ceases to be a Qualified Employee.
|
(ii)
|
Unforeseeable Emergency
. A Participant who, pursuant to Section 4.1(a), has received a distribution due to an Unforeseeable Emergency, is not eligible to defer Base Salary or Bonus with respect to the remainder of the Plan Year during which the revocation occurs or the distribution is
|
(iii)
|
401(k) Hardship Withdrawal
. A Qualified Employee who receives a hardship withdrawal from a 401(k) plan maintained by a Participating Employer, or by any other employer required to be aggregated with the Participating Employer under Code section 414(b), (c), (m) or (o), is not eligible to defer Base Salary or Bonus under the Plan to the extent required to comply with the terms of the 401(k) plan. For each Plan Year during which a deferral is not permitted, the deferral election is cancelled through the end of the Plan Year, with any new election subject to the deferral election requirements of Section 3.2.
|
(b)
|
Affect on Deferral Elections
. An Active Participant’s deferral election for a Plan Year is irrevocable after the latest day on which the election may be made except in the event of a distribution under Section 2.2(a)(ii) or on account of a 401(k) hardship withdrawal under Section 2.2(a)(iii).
|
(a)
|
Participant Accounts
. For each Participant, the Administrator will establish and maintain one or more separate bookkeeping accounts as follows:
|
(i)
|
deferrals elected by the Participant pursuant to Section 3.2 will be credited to his or her Savings Account;
|
(ii)
|
deferrals elected by the Participant pursuant to Section 3.3 will be credited to his or her Fixed Period (Strategy 1) Account that includes a subaccount established and maintained for the Participant in connection with each deferral election made pursuant to Section 3.3 prior to January 1, 2009;
|
(iii)
|
deferrals elected by the Participant pursuant to Section 3.4 will be credited to his or her Fixed Period (Strategy 2) Account that includes a subaccount established and maintained for the Participant in connection with each deferral election made pursuant to Section 3.4 prior to January 1, 2009; and
|
(iv)
|
credits made on the Participant’s behalf (if any) pursuant to Section 3.5 will be credited to his or her Retirement Account; and
|
(v)
|
deferrals elected by the Participant pursuant to Section 3.8 will be credited to his or her Stock Unit Account.
|
(i)
|
An Active Participant may elect to defer up to fifty percent (50%) of his or her Base Salary for a Plan Year in accordance with Plan Rules.
|
(ii)
|
An election made pursuant to this subsection will not be effective unless it is made on a properly completed election form received by the Administrator by a date specified by the Administrator which is prior to the first day of the Plan Year to which the election relates or, in the case of an individual who becomes eligible to participate after the first day of a Plan Year, within thirty (30) days after he or she becomes eligible to participate. The special 30-day rule is only applicable to an individual who during the preceding 24-month period was not eligible to participate in this Plan or any other non-qualified deferred compensation plan maintained by the Company or an Affiliate that is required to be treated as
|
(iii)
|
Notwithstanding the foregoing provisions of this Subsection (a), an Active Participant designated by the Administrator as eligible to make an election pursuant to Section 2.1(a)(ii) may elect, in accordance with Plan Rules, to defer up to fifty percent (50%) of his or her Base Salary relating to services performed during the 2012 Partial Plan Year Service Period. An election made pursuant to this clause (iii) will not be effective unless it is made on a properly completed election form received by the Administrator by a date specified by the Administrator which is prior to July 1, 2012 or, in the case of an individual who becomes eligible to participate after July 1, 2012, within thirty (30) days after he or she becomes eligible to participate. The special 30-day rule is only applicable to an individual who during the preceding 24-month period was not eligible to participate in this Plan or any other non-qualified deferred compensation plan maintained by the Company or an Affiliate that is required to be treated as a single plan with the Plan under Code Section 409A.
|
(iv)
|
Any election pursuant to this subsection applies only to Base Salary relating to services performed after the effective date of the election.
|
(i)
|
An Active Participant may elect to defer up to seventy-five percent (75%) of his or her Bonus for the Plan Year in accordance with Plan Rules.
|
(ii)
|
An election made by an Active Participant pursuant to this subsection will not be effective unless it is made on a properly completed election form received by the Administrator prior to the first day of the Plan Year to which the election relates and shall apply to the bonus that relates solely to services performed on or after the beginning of such Plan Year.
|
(c)
|
Limitations
. The Administrator may, prior to the effective date of a Participant’s election, limit the amount of the Participant’s deferral to be made under this section to account for other anticipated payroll deductions. In addition, Plan Rules may specify individual or aggregate annual or lifetime deferral limitations.
|
(d)
|
Allocation to Savings Account
. An Active Participant’s deferrals pursuant to this section will be allocated to his or her Savings Account.
|
(e)
|
Timing of Credits
. Deferrals of an Active Participant’s Base Salary and Bonus pursuant to this section will be credited to his or her Savings Account as of the date on which the Participant would have otherwise received the Base Salary or Bonus but for his or her deferral election pursuant to this section.
|
(a)
|
Designation of Investment Funds
. The Administrator will designate two or more investment funds that will serve as the basis for determining adjustments pursuant to this Section. The Administrator may, from time to time, designate additional investment funds or eliminate any previously designated investment funds. The designation or elimination of a fund pursuant to this Subsection is not a Plan amendment. The Administrator will not be responsible in any manner to any Participant or other person for any damages, losses, liabilities, costs or expenses of any kind arising in connection with any designation or elimination of an investment fund.
|
(b)
|
Participant Direction
. A Participant must direct the manner in which amounts credited to his or her Accounts pursuant to Sections 3.2, 3.3, 3.4 and 3.5 will be deemed to be invested among the investment funds designated pursuant to Subsection (a). Amounts will be deemed to be invested in accordance with the Participant’s direction on or as soon as administratively practicable after the amounts are credited to the Participant’s Account. To the extent a Participant fails to direct the manner in which amounts credited to his or her Accounts will be deemed to be invested, such amounts will deemed to be invested in the manner specified in Plan Rules.
|
(c)
|
Change in Direction for Future Credits
. A Participant may direct a change in the manner in which future credits to his or her Accounts pursuant to Section 3.2 or 3.5 will be deemed to be invested among the investment funds designated pursuant to Subsection (a). The direction will be effective for deferrals credited to the Participant’s Account pursuant to Sections 3.2 or 3.5 at least 30 days (or such shorter period as Plan Rules may allow) after the date on which the Administrator receives the direction from the Participant.
|
(d)
|
Change in Direction for Existing Account Balance
. A Participant may direct a change in the manner in which his or her existing Account balances under
|
(e)
|
Account Adjustment
. As of the close of business on each day on which the New York Stock Exchange is open for regular business, the Administrator will cause Participants’ Accounts to be separately adjusted, in a manner determined by the Administrator to be uniform and equitable, to reflect the income, expense, gains, losses, fees and the like (other than taxes) that would have resulted since the last adjustment had the Participant’s investment directions pursuant to this Section actually been implemented. For purposes of this Subsection, an amount will be deemed to have been invested in accordance with a Participant’s direction by the fifth business day after (i) the date on which the amount is credited to the Participant’s Account in the case of a direction pursuant to Subsection (b) or Subsection (c) or (ii) the effective date of a direction pursuant to Subsection (d). To the extent determined by the Administrator to be necessary in conjunction with any distribution pursuant to the Plan, the Administrator will cause the Account from which the distribution is to be made to be adjusted to reflect a good faith estimate by the Administrator of any fees and other expenditures payable after the date of the distribution in connection with deemed investment activity in the Account through and including the date of the distribution. Any such estimate is binding on the Participating Employer and the person to whom the distribution is made.
|
(f)
|
Obligations and Responsibilities of Administrator
. The sole obligation of the Administrator with respect to the designation or elimination of any investment fund designated pursuant to Subsection (a) is to act in accordance with the express terms of Subsection (a). By way of example and without limiting the previous sentence, the Administrator is not required, and no course of conduct will cause it to be required, to investigate or monitor any designated fund to any extent or for any purpose or to take or refrain from taking any action with respect to a fund because of any aspect of the performance of the fund. The designation of a limited number of investment funds is solely for administrative convenience and in no way reflects any endorsement of any such funds by the Administrator.
|
(g)
|
Deemed Investment
. Trust assets are not required to be invested in accordance with a Participant’s directions and the balance of all Accounts pursuant to the Plan will be determined pursuant to this Section and other applicable Sections of the Plan without regard to the actual amount of Trust assets.
|
(h)
|
Participant Responsibilities
. Each Participant is solely responsible for any and all consequences of his or her investment directions made pursuant to this Section. Neither any Participating Employer, any of its directors, officers or employers, the Company’s Board nor the Administrator has any responsibility to any Participant or other person for any damages, losses, liabilities, costs or expenses of any kind arising in connection with any investment direction made by a Participant pursuant to this Section.
|
(i)
|
Stock Unit Account
. The Stock Unit Account will be deemed to be invested in common stock of the Company.
|
(i)
|
Transfer Restrictions
. A Participant may
not
, at any time, direct a transfer out of the Stock Unit Account.
|
(ii)
|
Dividends
. If the Company pays dividends on Company common stock, units under the Account will be adjusted to reflect the dividend in accordance with Plan Rules.
|
(a)
|
Each Participant always has a fully vested nonforfeitable interest in his or her Savings Account, Fixed Period (Strategy 1) Account and Fixed Period (Strategy 2) Account.
|
(b)
|
A Participant will acquire a fully vested nonforfeitable interest in his or her Retirement Account if he or she dies or becomes Disabled on or prior to his or her Termination Date.
|
(c)
|
A Participant whose Retirement Account is not otherwise fully vested will acquire a vested nonforfeitable interest in the portion of his or her Retirement Account to the extent provided in the following schedule based on the Participant’s Years of Service:
|
Full Years of Service
Less than One Year
At least One Year
At least Two Years
At least Three Years
Four or More Years
|
Vested
Interest
0%
25%
50%
75%
100 %
|
(a)
|
An Active Participant may elect to defer up to one hundred percent (100%)
of his or her Restricted Stock Unit Award. The deferral election shall become irrevocable on the last date it can be made.
|
(b)
|
An election made by an Active Participant pursuant to this election will not be effective unless it is made in a properly completed election form received by the Administrator prior to the first day of the calendar year during which the Restricted Stock Unit Award is granted to the Participant, or, in the case of an individual who becomes eligible to participate after the first day of a Plan Year, within thirty (30) days after he or she becomes eligible to participate. The special
|
(c)
|
The Administrator may, prior to the effective date of a Participant’s election, limit the amount of the Participant’s deferral to be made under this section to account for other anticipated payroll deductions. In addition, Plan Rules may specify individual or aggregate annual or lifetime deferral limitations.
|
(d)
|
An Active Participant’s deferrals pursuant to this section will be credited to his or her Stock Unit Account as of the date on which the Participant would have received payment under the Restricted Stock Unit Award but for his or her deferral election pursuant to this section.
|
(a)
|
Withdrawals Due to Unforeseeable Emergency
. Prior to a Participant’s Termination Date, a distribution will be made to a Participant from his or her vested Accounts if the Participant submits a written distribution request to the Administrator and the Administrator determines that the Participant has experienced an Unforeseeable Emergency. The amount of the distribution may not exceed the lesser of (i) the amount necessary to satisfy the emergency, as determined by the Administrator consistent with the requirements of Code section 409A(a)(2)(B)(ii) or (ii) the vested balance of the Accounts. The distribution will be made in the form of a lump sum cash payment as soon as administratively practicable (but not more than ninety ((90) days) after the Administrator’s determination that the Participant has experienced an Unforeseeable Emergency. Any distribution pursuant to this Subsection will be made in the following order: first, from the Participant’s Savings Account; second, from his or her Fixed Period (Strategy 1) Account; third, from his or her Fixed Period (Strategy 2) Account; and fourth, from his or her Retirement Account.
|
(b)
|
Reduction of Account Balance
. The balances of a Participant’s Accounts will be reduced (but not below zero) by the amount of the distribution as of the date of the distribution.
|
(a)
|
Time
. Distribution to a Participant of the vested balance of his or her Savings and Retirement Accounts will be made or commence as soon as administratively practicable (but not more than ninety (90) days) after the Participant’s Termination Date.
|
(b)
|
Form
. Distribution to the Participant of the vested balance of his or her Savings and Retirement Accounts will be made in the form of a single lump sum cash payment unless, and only to the extent, the Participant has made a written election to receive his or her distribution in the form of annual installment payments over a period not to exceed ten years on a properly completed election form filed with the Administrator at the time of his or her written elections to defer Base Salary or Bonus pursuant to Section 3.2.
|
(c)
|
Amount
.
|
(i)
|
Lump Sum
. The amount of a lump sum payment from a Participant’s Savings and Retirement Accounts will be equal to the vested balances of the Accounts (or applicable subaccounts).
|
(ii)
|
Installments
. The amount of an installment payment from a Participant’s Savings and Retirement Accounts will be determined by dividing the
|
(d)
|
Reduction of Account Balances
. The balance of the Accounts will be reduced (but not below zero) by the amount of the distribution as of the date of the distribution.
|
(a)
|
Time
. Distribution to a Participant of the vested balance of each of his or her subaccounts under the Fixed Period (Strategy 1) Account and Fixed Period (Strategy 2) Account will be made or commence on the dates elected by the Participant at the time of his or her written elections to defer Base Salary or Bonus to a Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account.
|
(b)
|
Form
. Distribution to the Participant of the vested balance of his or her subaccounts under the Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account will be made in the form of a lump sum cash payment or in the form of four annual installment cash payments, as elected by the Participant at the time of his or her written election to defer Base Salary or Bonus to a Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account.
|
(c)
|
Amount
.
|
(i)
|
Lump Sum
. The amount of a lump sum payment from a Participant’s subaccount under the Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account will be equal to the vested balance of the subaccount.
|
(ii)
|
Installments
. The amount of an installment payment from a Participant’s subaccount under the Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account will be determined by dividing the vested balance of the subaccount under the Fixed Period (Strategy 1) Account or Fixed Period (Strategy 2) Account, as the case may be, by the total number of remaining payments (including the current payment). The undistributed portion of a subaccount distributed in the form of installment payments will continue to be credited with earnings in accordance with Section 3.6.
|
(d)
|
Reduction of Subaccount Balances
. The balance of a subaccount under the Fixed Period (Strategy 1) Account and Fixed Period (Strategy 2) Account will be reduced (but not below zero) by the amount of the distribution as of the date of the distribution.
|
(a)
|
Time
. Distribution to a Participant of the vested balance of his or her Stock Unit Account will be made as soon as administratively practicable (but not more than ninety (90) days) after the earlier of :
|
(i)
|
Participant's Termination Date;
|
(ii)
|
the fixed date elected by the Participant on a properly completed election form filed with the Administrator at the time of his or her written election to defer the Restricted Stock Unit Award; or
|
(iii)
|
a Change in Control, provided it constitutes a "change in control event" as defined in the Treasury Regulations issued under Code section 409A.
|
(b)
|
Form
. Distribution to the Participant of the vested balance of his or her Stock Unit Account will be made in the form of a single lump sum payment. Distribution will be made in the form of shares of common stock of the Company.
|
(c)
|
Amount
. The amount of a lump sum payment from a Participant's Stock Unit Account will be equal to the vested balance of the Account.
|
(d)
|
Reduction of Account Balance
. The balance of the Account will be reduced (but not below zero) by the amount of the distribution as of the date of the distribution.
|
(a)
|
Time
. Distribution to a Beneficiary will be made as soon as administratively practicable (but not more than ninety (90) days) after the Participant’s death.
|
(b)
|
Form
. Distribution to the Beneficiary will be made in the form of a lump sum cash payment whether or not payments had commenced to the Participant in the form of installments prior to his or her death.
|
(c)
|
Amount
. The amount of a lump sum payment will be equal to the balance of the deceased Participant’s Accounts.
|
(d)
|
Reduction of Account Balance
. The balances of the Accounts will be reduced (but not below zero) by the amount of the distribution as of the date of the distribution.
|
(e)
|
Beneficiary Designation
.
|
(i)
|
Each Participant may designate, on a form furnished by the Administrator, one or more primary Beneficiaries or alternative Beneficiaries to receive all or a specified part of his or her Accounts after his or her death, and the Participant may change or revoke any such designation from time to time. No such designation, change or revocation is effective unless executed by the Participant and received by the Administrator during the Participant’s lifetime.
|
(ii)
|
If a Participant
—
|
(1)
|
fails to designate a Beneficiary, or
|
(2)
|
revokes a Beneficiary designation without naming another Beneficiary, or
|
(3)
|
designates one or more Beneficiaries, none of whom survives the Participant or exists at the time in question,
|
(iii)
|
The automatic Beneficiaries specified above and, unless the designation otherwise specifies, the Beneficiaries designated by the Participant, become fixed as of the Participant’s death so that, if a Beneficiary survives the Participant but dies before the receipt of the payment due such Beneficiary, the payment will be made to the representative of such Beneficiary’s estate. Any designation of a Beneficiary by name that is accompanied by a description of relationship or only by statement of relationship to the Participant is effective only to designate the person or persons standing in such relationship to the Participant at the Participant’s death.
|
(a)
|
Each Participating Employer will pay, from its general assets, the portion of any benefit pursuant to Article 4 or Section 6.3 or 6.4 attributable to a Participant’s Accounts with respect to that Participating Employer, and all costs, charges and expenses relating thereto.
|
(b)
|
The Trustee will make distributions to Participants and Beneficiaries from the Trust in satisfaction of a Participating Employer’s obligations under the Plan in accordance with the terms of the Trust. The Participating Employer is responsible for paying any benefits attributable to a Participant’s Account with respect to that Participating Employer that are not paid by the Trust.
|
(a)
|
Right
. The Company reserves the right to amend the Plan at any time to any extent that it may deem advisable.
|
(b)
|
Method
. To be effective, an amendment must be stated in a written instrument approved in advance or ratified by the Company’s Board and executed in the name of the Company by two of its officers.
|
(c)
|
Binding Effect
. An amendment adopted in accordance with Subsection (b) is binding on all interested parties as of the effective date stated in the amendment; provided, however, that no amendment may retroactively deprive any Participant, or the Beneficiary of a deceased Participant, of any benefit to which he or she is entitled under the terms of the Plan in effect immediately prior to the effective date of the amendment or the date on which the amendment is adopted, whichever is later.
|
(d)
|
Certain Amendments to Earnings Credit Method
. Any amendment that materially changes the method of determining the adjustments to Participants’ Accounts pursuant to Section 3.6
is effective with respect to the portion of the Accounts attributable to credits made before the date on which the amendment is adopted only if the Company’s Board determines in good faith that on that date, it is reasonably likely that, in the long run, the new method will not result in materially lower credit rate than the old method.
|
(e)
|
Applicability to Participants Who Have Terminated Employment
. The provisions of the Plan in effect on a Participant’s Termination Date will, except as otherwise expressly provided by a subsequent amendment, continue to apply to such Participant.
|
(a)
|
terminate the Participant’s future participation in the Plan;
|
(b)
|
cause the Participant’s entire vested interest in the Plan to be distributed to the Participant in the form of an immediate lump sum cash payment; and/or
|
(c)
|
transfer the benefits that would otherwise be payable pursuant to the Plan for all or any of the Participants to a new plan that is similar in all material respects (other than those which require the action in question to be taken).
|
(a)
|
The Administrator will notify a Participant in writing, within 90 days of the Participant’s written application for benefits, of the Participant’s eligibility or noneligibility for benefits under the Plan. If the Administrator determines that a Participant is not eligible for benefits or full benefits, the notice will:
|
(1)
|
state the specific reasons for the denial of any benefits;
|
(2)
|
provide a specific reference to the provision of the Plan on which the denial is based;
|
(3)
|
provide a description of any additional information or material necessary for the claimant to perfect the claim, and a description of why it is needed;
|
(4)
|
state that the claimant will be provided, on request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claim;
|
(5)
|
state the claimant’s right to bring a civil action under ERISA Section 502(a) following a continued denial of a claim after appeal review; and
|
(6)
|
provide an explanation of the Plan’s claims review procedure and other appropriate information as to the steps to be taken if the Participant wishes to have the claim reviewed. If the Administrator determines that there are special circumstances requiring additional time to make a decision, the Administrator will notify the Participant of the special circumstances and the date by which a decision is expected to be made, and may extend the time for up to an additional 90-day period.
|
(b)
|
If a Participant is determined by the Administrator not to be eligible for benefits or if the Participant believes that he or she or she is entitled to greater or different benefits, the Participant will be provided the opportunity to have his or her claim reviewed by the Administrator by filing a petition for review with the Administrator within 60 days after the Participant receives the notice issued by the Administrator. The petition must state the specific reasons the Participant believes he or she or she is entitled to benefits or greater or different benefits. Within 60 days after the Administrator receives the petition, the Administrator will give the Participant (and his or her counsel, if any) an opportunity to present his or her position to the Administrator in writing, and the Participant (or his or her counsel) may review the pertinent documents, and the Administrator will notify the Participant of its decision in writing within such 60-day period, stating specifically the basis of the decision written in a manner calculated to be understood by the Participant and the specific provisions of the Plan on which the decision is based. If because of special circumstances requiring additional time to make a decision, the 60-day period is not sufficient, the decision may be deferred
|
(c)
|
The same procedure applies to the Beneficiary of a deceased Participant.
|
(d)
|
A claimant must exhaust the procedure described in this section before pursuing the claim in any other proceeding.
|
(a)
|
In the case of a dispute between a Participant or his or her Beneficiary and a Participating Employer, the Administrator or other person relating to or arising from the Plan, the United States District Court for the District of Minnesota is a proper venue for any action initiated by or against the Participating Employer, Administrator or other person and such court will have personal jurisdiction over any Participant or Beneficiary named in the action.
|
(b)
|
Regardless of where an action relating to or arising from the participation in the Plan by any Participant is pending, the law as stated and applied by the United States Court of Appeals for the Eighth Circuit or the United States District Court for the District of Minnesota will apply to and control all actions relating to the Plan brought against the Plan, a Participating Employer, the Administrator or any other person or against any such Participant or his or her Beneficiary.
|
INTRODUCTION
|
1
|
|
ELIGIBILITY
|
1
|
|
WHEN COVERAGE ENDS
|
1
|
|
PLAN BENEFITS
|
1
|
|
CLAIMS PROCEDURES
|
2
|
|
Initial Claim Determination
|
2
|
|
Request for Review of a Denied Claim
|
2
|
|
Determination on Request for Review
|
2
|
|
General Claims Procedures Rules
|
3
|
|
Exhaustion of Administrative Remedies
|
3
|
|
Deadline to Commence a Lawsuit
|
3
|
|
Governing Law
|
3
|
|
|
|
|
COBRA CONTINUATION COVERAGE
|
3
|
|
COBRA Eligibility
|
4
|
|
Election of COBRA Continuation Coverage
|
4
|
|
Deadline to Elect COBRA Coverage
|
4
|
|
Length of COBRA Continuation Coverage
|
4
|
|
Procedures to Elect or Extend COBRA Continuation Coverage
|
4
|
|
Cost of COBRA Continuation Coverage
|
4
|
|
|
|
|
GENERAL PLAN INFORMATION
|
5
|
|
Plan Administrator/Named Fiduciary
|
5
|
|
Plan Year
|
5
|
|
Amendment and Termination of the Plan
|
5
|
|
Correction of Errors and Recovery of Excess Payments
|
5
|
|
Assignment of Benefits Prohibited
|
5
|
|
No Employment Rights
|
5
|
|
Certificates of Creditable Coverage
|
6
|
|
Funding
|
6
|
|
Tax Information
|
6
|
|
Grandfathered Notice
|
6
|
|
Indemnification
|
6
|
|
•
|
the reason(s) for the denial;
|
•
|
the Plan provisions on which the denial is based;
|
•
|
a description of additional material (if any) needed to perfect the claim;
|
•
|
an explanation of his or her right to request a review; and
|
•
|
a statement of his or her right to file a civil action under section 502(a) of ERISA, if his or her claim is denied upon a request for review; and a statement indicating whether an internal rule, guideline, protocol or other similar criterion was relied on in deciding his or her claim and information explaining his or her right to request such information, free of charge.
|
•
|
the reason(s) the denial was upheld;
|
•
|
the Plan provisions on which the denial is based;
|
•
|
an explanation of his or her right to request reasonable access to and copies of the relevant documents, records, and information used in the claims process without charge;
|
•
|
a description of any voluntary appeal procedures offered by the Plan;
|
•
|
a statement of his or her right to file a civil action under section 50(a) of ERISA if his or her claim is denied upon a request for review;
|
•
|
a statement indicating whether an internal rule, guideline, protocol or other similar criterion was relied on in deciding his or her claim and information; and
|
•
|
explaining his or her right to request such information, free of charge.
|
(a)
|
hours of employment are reduced or
|
(b)
|
employment ends for any reason other than his or her gross misconduct.
|
•
|
reducing or suspending future benefit payments;
|
•
|
requesting direct payment from the eligible employee or withholding wages; or
|
•
|
any other method allowed by law.
|
1.
|
I have reviewed this
annual
report on
Form 10-K
of Select Comfort Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 27, 2015
|
|
|
|
|
|
|
/s/ Shelly R. Ibach
|
|
|
Shelly R. Ibach
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this
annual
report on
Form 10-K
of Select Comfort Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 27, 2015
|
|
|
|
|
|
|
/s/ David R. Callen
|
|
|
David R. Callen
|
|
|
Senior Vice President and Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
February 27, 2015
|
|
|
|
|
/s/ Shelly R. Ibach
|
|
Shelly R. Ibach
|
|
Chief Executive Officer
|
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
February 27, 2015
|
|
|
|
|
/s/ David R. Callen
|
|
David R. Callen
|
|
Senior Vice President and Chief Financial Officer
|