UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
Select Comfort Corporation
--------------------------
(Name of Issuer)
Common Stock, par value $.01 per share
--------------------------
(Title of Class of Securities)
81616X 10 3
--------------------------
(CUSIP Number)
Bruce A. Backberg
Senior Vice President
The St. Paul Companies, Inc.
385 Washington Street
St. Paul, Minnesota 55102
(651) 310-7916
--------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 1, 2001
--------------------------
(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 9
CUSIP NO. 81616X 10 3 SCHEDULE 13D Page 2 of 9
-------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(entities only)
The St. Paul Companies, Inc.
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
Not Applicable (a) / /
(b) / /
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / /
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota corporation
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 7,020,376 (see Items 5 and 6)*
REPORTING
PERSON -------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,020,376 (see Items 5 and 6)*
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON
7,020,376 (see Items 5 and 6)*
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES / /
Not Applicable
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
37.0%*
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
HC, IC and CO
-------------------------------------------------------------------------------
* 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 9
CUSIP NO. 81616X 10 3 SCHEDULE 13D Page 3 of 9
-------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(entities only)
St. Paul Fire and Marine Insurance Company
------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
Not Applicable (a) / /
(b) / /
-------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------
4 SOURCE OF FUNDS
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) / /
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota corporation
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 7,020,101 (see Items 5 and 6)*
REPORTING
PERSON -------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER
0
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,020,101 (see Items 5 and 6)*
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY
EACH REPORTING PERSON
7,020,101 (see Items 5 and 6)*
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES / /
Not Applicable
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
37.0%*
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IC and CO
-------------------------------------------------------------------------------
* 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 9
This Amendment No. 4 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") and Amendment No. 3 dated November 15,
2000 ("Amendment No. 3"), 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 and
Amendment No. 3. All terms used, but not defined, in this Amendment No. 4 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 May 1, 2001, St. Paul Venture Capital VI, LLC ("SPVC VI"), a
subsidiary of each of the Reporting Persons, loaned Select Comfort $2,000,000
pursuant to a demand note, which is described in Item 6 (the "Note").
Corporate funds of SPVC VI were used to purchase the Note. No funds used to
purchase the Note 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 on
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 and other than an additional financing of Select Comfort of
which the Reporting Persons intend to participate, none of the Reporting
Persons or any of their affiliates has any present plans or proposals which
relate to or would result in:
o the acquisition by any person of additional securities of Select
Comfort or the disposition of securities of Select Comfort;
Page 4 of 9
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 May 1, 2000, The St. Paul and F&M may
be deemed to have owned beneficially 7,020,376 shares of Common Stock of
Select Comfort and 7,020,101 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 11,760 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, 138,361
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, 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 7,020,376 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 7,020,101
Page 5 of 9
shares described in this Schedule 13D. Hence, each The St. Paul and F&M
may be deemed to beneficially own 7,020,376 shares of the Common Stock
of Select Comfort and 7,020,101 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: 37.0% and F&M: 37.0%. 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
December 30, 2000.
(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................. 7,020,376
(iii) Sole power to dispose or to direct the disposition of...... 0
(iv) Shared power to dispose or to direct the disposition of.... 7,020,376
(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................. 7,020,101
(iii) Sole power to dispose or to direct the disposition of...... 0
(iv) Shared power to dispose or to direct the disposition of.... 7,020,101
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
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 May 1, 2001, Select Comfort borrowed $2 million (the "Loan") from
SPVC VI. The Note issued to SPVC VI evidencing the Loan bears interest at an
interest rate of 8% per year, is payable within five days of demand therefor
by SPVC VI, is guarantied by Select Comfort Retail Corporation and Select
Comfort Direct Corporation, (the "Guarantee"), each of which is a direct
Page 6 of 9
or indirect wholly owned subsidiary of Select Comfort (collectively, the
"Subsidiaries"), is secured by substantially all of the personal property of
Select Comfort and the Subsidiaries pursuant to written security agreements
(collectively, the "Security Agreements") in favor of SPVC VI, and is
convertible into the securities issued in Select Comfort's next financing at
the same price per security paid by the other purchasers in such financing.
It is anticipated that the issuance of securities by Select Comfort in its
next financing may require 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 proposed 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 proposed issuance (the "Voting Agreement").
A copy of the Note, the Guarantee, the Security Agreements and the
Voting Agreement are attached as exhibits to this Amendment No. 4 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 Demand Note dated May 1, 2001 in the Principal
Amount of $2,000,000 issued by Select Comfort
Corporation and made payable to St. Paul Venture
Capital VI, LLC
Exhibit 2 Guarantee dated May 1, 2001 by Select Comfort
Retail Corporation and Select Comfort Direct
Corporation
Exhibit 3 Security Agreement dated May 1, 2001 in Favor of
St. Paul Venture Capital VI, LLC by Select Comfort
Corporation
Exhibit 4 Security Agreement dated May 1, 2001 in Favor of
St. Paul Venture Capital VI, LLC by Select Comfort
Retail Corporation and Select Comfort Direct
Corporation
Exhibit 5 Letter Agreement dated May 1, 2001 Among St. Paul
Venture Capital VI, LLC and Certain Shareholders
of Select Comfort
Page 7 of 9
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.
May 4, 2001
THE ST. PAUL COMPANIES, INC.
By: /s/ Bruce A. Backberg
---------------------------------------
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 8 of 9
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION METHOD OF FILING
---------- ----------- ----------------
1 Demand Note dated May 1, 2001 in the Principal Amount of Filed Herewith
$2,000,000 issued by Select Comfort Corporation and made payable
to St. Paul Venture Capital VI, LLC
2 Guarantee dated May 1, 2001 by Select Comfort Retail Corporation Filed Herewith
and Select Comfort Direct Corporation
3 Security Agreement dated May 1, 2001 in Favor of St. Paul Venture Filed Herewith
Capital VI, LLC by Select Comfort Corporation
4 Security Agreement dated May 1, 2001 in Favor of St. Paul Venture Filed Herewith
Capital VI, LLC by Select Comfort Retail Corporation and Select
Comfort Direct Corporation
5 Letter Agreement dated May 1, 2001 Among St. Paul Venture Capital Filed Herewith
VI, LLC and Certain Shareholders of Select Comfort
Page 9 of 9