UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
Select Comfort Corporation
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
81616X 10 3
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(CUSIP Number)
Bruce A. Backberg
Senior Vice President
The St. Paul Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
(651) 310-7916
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
June 6, 2001
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(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box: / /
Page 1 of 11
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CUSIP NO. 81616X 10 3 SCHEDULE 13D Page 2 of 11
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (entities only)
The St. Paul Companies, Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
Not Applicable (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR
2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota corporation
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 12,760,792 (see Items 5 and 6)*
EACH -----------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0
WITH
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10 SHARED DISPOSITIVE POWER
12,760,792 (see Items 5 and 6)*
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,760,792 (see Items 5 and 6)*
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES / /
Not Applicable
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
51.6%*
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14 TYPE OF REPORTING PERSON
HC, IC and CO
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* Does not include additional shares that may be deemed beneficially owned by
the Reporting Person as a result of the voting agreement described in Item
6.
Page 2 of 11
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CUSIP NO. 81616X 10 3 SCHEDULE 13D Page 3 of 11
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1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (entities only)
St. Paul Fire and Marine Insurance Company
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
Not Applicable (a) / /
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR
2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota corporation
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 12,760,517 (see Items 5 and 6)*
EACH
REPORTING -----------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
WITH 0
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10 SHARED DISPOSITIVE POWER
12,760,517 (see Items 5 and 6)*
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12,760,517 (see Items 5 and 6)*
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12 CHECK BOX If THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES / /
Not Applicable
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
51.6%*
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14 TYPE OF REPORTING PERSON
IC and CO
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* Does not include additional shares that may be deemed beneficially owned by
the Reporting Person as a result of the voting agreement described in Item
6.
Page 3 of 11
This Amendment No. 5 to Schedule 13D hereby amends and supplements a
Schedule 13D dated March 17, 2000 (the "Original Statement"), as amended by
Amendment No. 1 dated May 19, 2000 ("Amendment No. 1"), Amendment No. 2 dated
September 8, 2000 ("Amendment No. 2"), Amendment No. 3 dated November 15, 2000
("Amendment No. 3") and Amendment No. 4 dated May 1, 2001 ("Amendment No. 4"),
filed by and on behalf of The St. Paul Companies, Inc. ("The St. Paul") and St.
Paul Fire and Marine Insurance Company ("F&M") with respect to the common stock,
par value $.01 per share (the "Common Stock") of Select Comfort Corporation, a
Minnesota corporation ("Select Comfort"). The St. Paul and F&M are sometimes
collectively referred to herein as the "Reporting Persons."
Except as set forth below, there are no changes to the information in
the Original Statement, as amended by Amendment No. 1, Amendment No. 2,
Amendment No. 3 and Amendment No. 4. All terms used, but not defined, in this
Amendment No. 5 are as defined in the Original Statement. The summary
descriptions contained herein of certain agreements and documents are qualified
in their entirety by reference to the complete text of such agreements and
documents filed as Exhibits hereto or incorporated herein by reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On June 6, 2001, St. Paul Venture Capital VI, LLC ("SPVC VI"), a
subsidiary of each of the Reporting Persons, purchased a $4,100,000 senior
secured convertible note of Select Comfort (the "Note") and a warrant to
purchase 1,640,000 shares of Common Stock (the "Warrant"), which are described
in Item 6. SPVC VI purchased the Note and the Warrant by delivering $2,084,000
in cash and by converting in full the principal and accrued interest on the
demand note dated May 1, 2001 in the principal amount of $2,000,000. Corporate
funds of SPVC VI were used to purchase the Note and the Warrant. No funds used
to purchase the Note and the Warrant were borrowed.
ITEM 4. PURPOSE OF TRANSACTION.
See Item 3 entitled "Source and Amount of Funds or Other Consideration"
above for a description of the transaction being reported in this Amendment to
Schedule 13D.
The Reporting Persons or their affiliates may from time to time
purchase shares of Common Stock, either in brokerage transactions, in the
over-the-counter market or in privately negotiated transactions. Any decision to
increase their holdings in Select Comfort will depend, however, on numerous
factors, including without limitation the price of the shares of Common Stock,
the terms and conditions relating to their purchase and sale and the prospects
and profitability of Select Comfort, and general economic conditions and stock
and money market conditions. At any time, the Reporting Persons may also
determine to dispose of some or all of the Common Stock, depending on various
similar considerations.
Except as otherwise provided in this Item 4 and other than as to
matters that Patrick A. Hopf, as Chairman of the Board of Select Comfort, may
consider and discuss with other Select Comfort officers and board members from
time to time, none of the Reporting Persons or any of their affiliates has any
present plans or proposals which relate to or would result in:
Page 4 of 11
o the acquisition by any person of additional securities of
Select Comfort or the disposition of securities of Select
Comfort;
o an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving Select Comfort;
o a sale or transfer of a material amount of assets of Select
Comfort;
o any change in the present board of directors or management of
Select Comfort, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the board;
o any material change in the present capitalization or dividend
policy of Select Comfort;
o any other material change in Select Comfort's business or
corporate structure;
o changes in Select Comfort's certificate of incorporation,
bylaws or instruments corresponding thereto or other actions
which may impede the acquisition of control of Select Comfort
by any person;
o causing a class of securities of Select Comfort to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
o a class of equity securities of Select Comfort becoming
eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, or
o any action similar to any of those listed above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) 1. Amount beneficially owned: As of June 6, 2001, The St. Paul and F&M may
be deemed to have owned beneficially 12,760,792 shares of Common Stock of
Select Comfort and 12,760,517 shares of Common Stock of Select Comfort,
respectively. F&M is a wholly owned subsidiary of The St. Paul. F&M is the
99% owner of St. Paul Venture Capital IV, LLC ("SPVC IV"), St. Paul Venture
Capital V, LLC ("SPVC V") and SPVC VI. The St. Paul is the 77% owner of St.
Paul Venture Capital, Inc. ("SPVC"), the manager of St. Paul Venture
Capital Affiliates Fund I, LLC ("SPVC Affiliates"). F&M is the record owner
of 4,806,022 shares of Common Stock and 59,769 shares of Common Stock
issuable upon exercise of outstanding warrants which are exercisable within
60 days. F&M also beneficially owns, through its 99% ownership interest in
SPVC IV, 321,017 shares of Common Stock and 11,898 shares of Common Stock
issuable upon exercise of outstanding warrants and options which are
exercisable within 60 days. In addition, F&M beneficially owns, through its
99% ownership interest in SPVC V, 955,900 shares of Common Stock, 138,639
shares of Common Stock issuable upon exercise of outstanding options, and
727,272 shares of Common Stock issuable upon conversion of a five-year
convertible debenture, all of which are exercisable or convertible within
60 days. Furthermore, F&M beneficially owns, through its 99% ownership
interest in SPVC VI, 1,640,000 shares of Common Stock issuable upon
exercise of outstanding warrants, and 4,100,000 shares of Common Stock
Page 5 of 11
issuable upon conversion of the Note, all of which are exercisable or
convertible within 60 days. The St. Paul beneficially owns, through its 77%
ownership interest in SPVC, the manager of SPVC Affiliates, 275 shares of
Common Stock. By virtue of the affiliate relationships among The St. Paul,
F&M, SPVC IV, SPVC V, and SPVC Affiliates, The St. Paul may be deemed to
own beneficially 12,760,792 shares described in this Schedule 13D. By
virtue of the affiliate relationships among The St. Paul, F&M, SPVC IV, and
SPVC V, F&M may be deemed to own beneficially 12,760,517 shares described
in this Schedule 13D. Hence, each The St. Paul and F&M may be deemed to
beneficially own 12,760,792 shares of the Common Stock of Select Comfort
and 12,760,517 shares of Common Stock of Select Comfort, respectively. The
amount beneficially owned by the Reporting Persons in this Item does not
include additional shares that may be deemed beneficially owned by the
Reporting Persons as a result of the voting agreement described in Item 6.
2. Percent of class: The St. Paul: 51.6% and F&M: 51.6%. The
foregoing percentages are calculated based on the 18,055,633 shares of Common
Stock reported to be outstanding by Select Comfort on its most recently filed
quarterly report on Form 10-Q for the quarter ended March 31, 2001.
(b) Number of shares as to which The St. Paul has:
(i) Sole power to vote or to direct the vote.............................. 0
(ii) Shared power to vote or to direct the vote............................12,760,792
(iii)Sole power to dispose or to direct the disposition of................. 0
(iv) Shared power to dispose or to direct the disposition of...............12,760,792
(b) Number of shares as to which F&M has:
(i) Sole power to vote or to direct the vote.............................. 0
(ii) Shared power to vote or to direct the vote............................12,760,517
(iii)Sole power to dispose or to direct the disposition of................. 0
(iv) Shared power to dispose or to direct the disposition of...............12,760,517
(c) Except as otherwise provided in this Amendment No. 5, neither
of the Reporting Persons or their affiliates have effected any
transactions in the Common Stock of Select Comfort since May
1, 2001, the date of Amendment No. 4.
(d) Not applicable.
(e) Not applicable.
Page 6 of 11
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The Reporting Persons hereby add the following disclosure to this Item
6:
On June 6, 2001, SPVC VI purchased the Note and Warrant pursuant to a
note purchase agreement dated as of June 1, 2001 (the "Note Purchase
Agreement"). The Note issued to SPVC VI bears interest at an interest rate of 8%
per year, is payable on the fifth anniversary thereof, is initially convertible
into Common Stock at a rate at $1.00 per share (subject to adjustment as
provided in the Note), is guarantied by Select Comfort Retail Corporation,
Select Comfort Direct Corporation, Select Comfort SC Corporation, Direct Call
Centers, Inc., and selectcomfort.com corporation (the "Guarantee"), each of
which is a direct or indirect wholly owned subsidiary of Select Comfort
(collectively, the "Subsidiaries"), is secured by substantially all of the
personal and intellectual property of Select Comfort and the Subsidiaries
pursuant to written security agreements (collectively, the "Security
Agreements") in favor of SPVC VI, as agent for the Note holders, and is further
secured by a pledge agreement in which Select Comfort Corporation pledges all of
the capital stock of each Subsidiary to SPVC VI, as agent for the Note holders
(the "Pledge Agreement"). The Warrant issued to SPVC VI may be exercised at any
time for a period of five years and is initially exercisable at a price of $1.00
per share (subject to adjustment as provided in the Warrant). The shares of
Common Stock issuable upon conversion of the Note and exercise of the Warrant
have been granted certain demand and incidental registration rights pursuant to
a registration rights agreement (the "Registration Rights Agreement"). The
issuance of the Note and the Warrant by Select Comfort to SPVC VI and the other
notes and warrants sold to other investors pursuant to the Note Purchase
Agreement requires approval by Select Comfort's shareholders under rules of the
National Association of Securities Dealers, Inc. To ensure approval by Select
Comfort's shareholders of the issuance, SPVC VI has entered into a voting
agreement with several of Select Comfort's shareholders pursuant to which these
shareholders agreed to vote in favor of the issuance (the "Voting Agreement").
A copy of the Note Purchase Agreement, the Note, the Warrant, the
Guarantee, the Security Agreements, the Pledge Agreement, the Registration
Rights Agreement, and the Voting Agreement are attached as exhibits to this
Amendment No. 5 to Schedule 13D and are incorporated herein by this reference
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The Reporting Persons hereby add the following exhibits to this Item
7:
Exhibit 1 Information concerning directors and executive
officers of The St. Paul Companies, Inc. and St.
Paul Fire and Marine Insurance Company
Exhibit 2 Note Purchase Agreement dated June 1, 2001 Among
Select Comfort Corporation, St. Paul Venture
Capital VI, LLC and Certain Purchasers
Exhibit 3 Senior Secured Convertible Note dated June 6,
2001 in the Principal
Page 7 of 11
Amount of $4,100,000 issued by Select Comfort
Corporation and made payable to St. Paul Venture
Capital VI, LLC
Exhibit 4 Guaranty dated June 6, 2001 by Select Comfort
Retail Corporation, Select Comfort Direct
Corporation, Select Comfort SC Corporation, Direct
Call Centers, Inc., selectcomfort.com corporation
in Favor of St. Paul Venture Capital VI, LLC, as
agent for the holders of the Notes.
Exhibit 5 Security Agreement - Parent dated June 6, 2001
in Favor of St. Paul Venture Capital VI, LLC, as
agent for the holders of the Notes, by Select
Comfort Corporation
Exhibit 6 Patent and Trademark Security Agreement - Parent
dated June 6, 2001 in Favor of St. Paul Venture
Capital VI, LLC, as agent for the holders of the
Notes by Select Comfort Retail Corporation, Select
Comfort Direct Corporation, Select Comfort SC
Corporation, Direct Call Centers, Inc.,
selectcomfort.com corporation
Exhibit 7 Security Agreement - Subsidiaries dated June 6,
2001 in Favor of St. Paul Venture Capital VI, LLC,
as agent for the holders of the Notes, by Select
Comfort Retail Corporation and Select Comfort
Direct Corporation
Exhibit 8 Pledge Agreement dated June 6, 2001 in Favor of
St. Paul Venture Capital VI, LLC, as agent for the
holders of the Notes, by Select Comfort
Corporation
Exhibit 9 Warrant dated June 6, 2001 issued by Select
Comfort Corporation to St. Paul Venture Capital
VI, LLC
Exhibit 10 Registration Rights Agreement dated June 6,
2001 Among Select Comfort Corporation, St. Paul
Venture Capital VI, LLC, Certain Purchasers and
Certain Existing Shareholders and Warrantholders
Exhibit 11 Letter Agreement dated May 1, 2001 Among St.
Paul Venture Capital VI, LLC and Certain
Shareholders of Select Comfort Corporation
Page 8 of 11
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
June 7, 2001
THE ST. PAUL COMPANIES, INC.
By: /s/ Bruce A. Backberg
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Bruce A. Backberg
Its: Senior Vice President
ST. PAUL FIRE AND MARINE INSURANCE COMPANY
By: /s/ Bruce A. Backberg
----------------------------------------
Bruce A. Backberg
Its: Senior Vice President
Page 9 of 11
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION METHOD OF FILING
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1 Information concerning directors and executive officers of The Filed Herewith
St. Paul Companies, Inc. and St. Paul Fire and Marine Insurance
Company
2 Note Purchase Agreement dated June 1, 2001 Among Select Comfort Filed Herewith
Corporation, St. Paul Venture Capital VI, LLC and Certain
Purchasers
3 Senior Secured Convertible Note dated June 6, 2001 in the Filed Herewith
Principal Amount of $4,100,000 issued by Select Comfort
Corporation and made payable to St. Paul Venture Capital VI, LLC
4 Guaranty dated June 6, 2001 by Select Comfort Retail
Corporation, Filed Herewith Select Comfort Direct Corporation,
Select Comfort SC Corporation, Direct Call Centers, Inc.,
selectcomfort.com corporation in Favor of St. Paul Venture
Capital VI, LLC, as agent for the holders of the Notes.
5 Security Agreement - Parent dated June 6, 2001 in Favor of St. Filed Herewith
Paul Venture Capital VI, LLC, as agent for the holders of the
Notes, by Select Comfort Corporation
6 Patent and Trademark Security Agreement - Parent dated June 6, Filed Herewith
2001 in Favor of St. Paul Venture Capital VI, LLC, as agent for
the holders of the Notes by Select Comfort Retail Corporation,
Select Comfort Direct Corporation, Select Comfort SC Corporation,
Direct Call Centers, Inc., selectcomfort.com corporation
7 Security Agreement - Subsidiaries dated June 6, 2001 in Favor of Filed Herewith
St. Paul Venture Capital VI, LLC, as agent for the holders of the
Notes, by Select Comfort Retail Corporation and Select Comfort
Direct Corporation
8 Pledge Agreement dated June 6, 2001 in Favor of St. Paul Venture Filed Herewith
Capital VI, LLC, as agent for the holders of the Notes, by Select
Comfort Corporation
9 Warrant dated June 6, 2001 issued by Select Comfort Corporation to Filed Herewith
St. Paul Venture Capital VI, LLC
10 Registration Rights Agreement dated June 6, 2001 Among Select Filed Herewith
Comfort Corporation, St. Paul Venture Capital VI, LLC,
Page 10 of 11
Certain Purchasers and Certain Existing Shareholders and
Warrantholders
11 Letter Agreement dated May 1, 2001 Among St. Paul Venture Capital Filed Herewith
VI, LLC and Certain Shareholders of Select Comfort Corporation
Page 11 of 11