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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
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)
NOVEMBER 15, 2000
(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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<TABLE>
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<S><C>
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.
---------------------------- -----------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
Not Applicable (a) / /
(b) / /
---------------------------- -----------------------------------------------------------------------------------------
3 SEC USE ONLY
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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 8 SHARED VOTING POWER
OWNED BY 7,010,101 (see Item 5)
EACH
---------------------- ------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0
WITH
---------------------- ------------------------------------------------------------------
------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,010,101 (see Item 5)
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,010,101 (see Item 5)
---------------------------- -----------------------------------------------------------------------------------------
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
37.3%
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14 TYPE OF REPORTING PERSON
HC, IC and CO
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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
---------------------------- -----------------------------------------------------------------------------------------
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 8 SHARED VOTING POWER
OWNED BY 7,010,101 (see Item 5)
EACH
---------------------- ------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0
WITH
---------------------- ------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
7,010,101 (see Item 5)
---------------------------- -----------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,010,101 (see Item 5)
---------------------------- -----------------------------------------------------------------------------------------
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
37.3%
---------------------------- -----------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IC and CO
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ITEM 1. SECURITY AND ISSUER.
This Statement on Schedule 13D relates to the common stock, par value
$.01 per share (the "Common Stock"), of Select Comfort Corporation, a Minnesota
corporation ("Select Comfort"). The address of the principal executive offices
of Select Comfort is 10400 Viking Drive, Suite 400, Eden Prairie, Minnesota
55344.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by and on behalf of The St. Paul Companies,
Inc. ("The St. Paul") and St. Paul Fire and Marine Insurance Company ("F&M").
The St. Paul and F&M are sometimes collectively referred to herein as the
"Reporting Persons."
(b) The principal business address of each of the Reporting Persons is
385 Washington Street, St. Paul, Minnesota 55102.
(c) Each of the Reporting Persons is a Minnesota corporation and is
principally engaged in the insurance business.
(d) None of the Reporting Persons has, during the last five years, been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) None of the Reporting Persons has, during the last five years, been
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, United States federal or state securities laws
or finding any violation with respect to such laws.
(f) Not applicable
Information called for by Items 2-6 of this Schedule 13D concerning the
directors and executive officers of each of the Reporting Persons is set forth
in Exhibit 1 attached hereto and incorporated herein by this reference.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
On November 15, 2000, St. Paul Venture Capital IV, LLC ("SPVC IV"), St.
Paul Venture Capital V, LLC ("SPVC V") and St. Paul Venture Capital VI, LLC
("SPVC VI"), each a subsidiary of each of the Reporting Persons, together with
Select Comfort and SleepTec, Inc., a Delaware corporation ("SleepTec"), entered
into an Asset Purchase Agreement (the "Agreement"), dated effective as of
November 10, 2000, pursuant to which SleepTec agreed to sell certain assets to
Select Comfort. As part of the purchase price, Select Comfort issued SleepTec a
five-year convertible debenture in the principal amount of $4,000,000. This
debenture is convertible at the election of the holder at any time into shares
of Common Stock of Select Comfort based on an initial conversion price of $5.50
per share. The St. Paul, F&M, SPVC IV and SPVC V are majority stockholders of
SleepTec. SPVC V loaned $4,000,000 and SPVC VI has committed to loan $750,000 to
SleepTec in the form of convertible promissory notes. SleepTec intends to
transfer a portion of the debenture to SPVC V and a portion of the
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debenture to SPVC VI as repayment of these notes. As a result of this
transaction, The St. Paul, F&M, and SPVC V, and The St. Paul, F&M and SPVC VI
may be deemed to beneficially own 590,909 and 136,364 shares of Common Stock
of Select Comfort, respectively, with respect to the debenture. A form of the
debenture to be transferred to SPVC V and SPVC VI is attached as an exhibit
to this Schedule 13D and is incorporated herein by this reference.
From September 13, 2000 to September 18, 2000, SPVC V purchased in
open market brokerage transactions an aggregate of 80,000 shares of Common
Stock of Select Comfort for an aggregate purchase price of $222,500.00.
Corporate funds of SPVC V were used to purchase all of these shares.
No funds used to purchase any of the shares of Common Stock of Select
Comfort or notes of SleepTec reported on this statement 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, 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;
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;
Page 5 of 11
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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 November 15, 2000, each of the
Reporting Persons may be deemed to have owned beneficially 7,010,101 shares of
Common Stock of Select Comfort. F&M is a wholly owned subsidiary of The St.
Paul. F&M is the 99% owner of SPVC IV, SPVC V and SPVC VI. 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 10,926 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, 129,194 shares of Common Stock issuable
upon exercise of outstanding options, and 590,909 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, 136,364 shares of Common Stock
issuable upon conversion of a five-year convertible debenture which is
convertible within 60 days. By virtue of the affiliate relationships between the
Reporting Persons, each Reporting Person may be deemed to own beneficially all
of the shares described in this Schedule 13D. Hence, each Reporting Person may
be deemed to beneficially own 7,010,101 shares of the Common Stock of Select
Comfort.
2. Percent of class: The St. Paul: 37.3% and F&M: 37.3%. The
foregoing percentages are calculated based on the 17,883,212 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 September 30, 2000.
<TABLE>
<CAPTION>
(b) Number of shares as to which each of the Reporting Persons has:
<S> <C>
(i) Sole power to vote or to direct the vote.............................. 0
(ii) Shared power to vote or to direct the vote............................ 7,010,101
(iii)Sole power to dispose or to direct
the disposition of......................................................... 0
(iv) Shared power to dispose or to direct the disposition of............... 7,010,101
</TABLE>
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(c) During the past 60 days, SPVC V has purchased the following number
of shares of Common Stock in open market brokerage transactions for the prices
per share (including brokerage commissions) and on the dates indicated below:
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DATE NUMBER OF SHARES PRICE PER SHARE
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<S> <C> <C>
September 13, 2000 50,000 $2.69
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September 18, 2000 30,000 $2.94
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</TABLE>
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
In connection with previous financings, Select Comfort has granted F&M
warrants to purchase 59,769 shares of Common Stock and SPVC IV warrants to
purchase 7,954 shares of Common Stock. Forms of these warrants are attached as
exhibits to this Schedule 13D and are incorporated herein by this reference. In
addition, Patrick A. Hopf, Chairman of the Board of Select Comfort and President
of St. Paul Venture Capital, Inc., which is the manager of SPVC IV and SPVC V,
has transferred to SPVC IV options to purchase 5,000 shares of Common Stock
(2,972 shares of which are currently exercisable or exercisable within 60 days
of November 15, 2000) and to SPVC V options to purchase 374,000 shares of Common
Stock (129,194 shares of which are currently exercisable or exercisable within
60 days of November 15, 2000), which options Mr. Hopf received from Select
Comfort as compensation for his director and officer services. Forms of these
options are attached as exhibits to this Schedule 13D and are incorporated
herein by this reference.
Pursuant to Rule 13d-1(k)(1) promulgated under the Exchange Act, the
Reporting Persons have entered into an agreement with respect to the joint
filing of this Schedule 13D, and any amendment or amendments hereto, a copy of
which has been filed as Exhibit 2 to this Schedule 13D and is incorporated
herein by this reference.
Except as described herein and in Exhibit 1 to this Schedule 13D, there
are no contracts, arrangements, understandings or relationships among the
persons named in Item 2 or between the Reporting Persons and any other person
with respect to any securities of Select Comfort.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 1 Information concerning directors and executive
officers of The St. Paul Companies, Inc. and St.
Paul Fire and Marine Insurance Company
Exhibit 2 Agreement between The St. Paul Companies, Inc.
and St. Paul Fire and Marine Insurance Company
Exhibit 3 Form of Warrant issued in connection with the
sale of Convertible Preferred Stock, Series E
Page 7 of 11
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Exhibit 4 Form of Warrant issued in connection with the
November 1996 Bridge Financing
Exhibit 5 Amended and Restated Registration Rights
Agreement dated December 28, 1995
Exhibit 6 First Amendment to Series E Stock Purchase
Agreement and Amended and Restated Registration
Rights Agreement dated April 25, 1996
Exhibit 7 Second Amendment to Amended and Restated
Registration Rights Agreement dated as of November
1, 1996
Exhibit 8 Second (sic) Amendment to Amended and Restated
Registration Rights Agreement dated March 24, 1997
Exhibit 9 Form of Performance Based Stock Option Agreement
under the 1997 Stock Incentive Plan
Exhibit 10 Form of Debenture issued in connection with the
SleepTec, Inc. Asset Purchase Agreement
Page 8 of 11
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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.
November 16, 2000
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 9 of 11
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Method of Filing
----------- ----------- ----------------
<S> <C> <C>
1 Information concerning directors and executive officers of The Filed herewith
St. Paul Companies, Inc. and St. Paul Fire and Marine Insurance
Company...........................................................
2 Agreement between The St. Paul Companies, Inc. and St. Paul Fire Filed herewith
and Marine Insurance Company......................................
3 Form of Warrant issued in connection with the sale of Convertible Incorporated by reference to
Preferred Stock, Series E........................................ Exhibit 4.2 contained in Select
Comfort's Registration Statement
on Form S-1, as amended (File
No. 333-62793)
4 Form of Warrant issued in connection with the November 1996 Bridge Incorporated by reference to
Financing........................................................ Exhibit 4.3 contained in Select
Comfort's Registration Statement
on Form S-1, as amended (File
No. 333-62793)
5 Amended and Restated Registration Rights Agreement dated Incorporated by reference to
December 28, 1995................................................ Exhibit 4.4 contained in Select
Comfort's Registration Statement
on Form S-1, as amended (File
No. 333-62793)
6 First Amendment to Series E Stock Purchase Agreement and Amended Incorporated by reference to
and Restated Registration Rights Agreement dated April 25, 1996.. Exhibit 4.5 contained in Select
Comfort's Registration Statement
on Form S-1, as amended (File
No. 333-62793)
7 Second Amendment to Amended and Restated Registration Rights Incorporated by reference to
Agreement dated as of November 1, 1996........................... Exhibit 4.6 contained in Select
Comfort's Registration Statement
on Form S-1, as amended (File
No. 333-62793)
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8 Second (sic) Amendment to Amended and Restated Registration Rights Incorporated by reference to
Agreement dated March 24, 1997................................... Exhibit 4.7 contained in Select
Comfort's Registration Statement
on Form S-1, as amended (File
No. 333-62793)
9 Form of Performance Based Stock Option Agreement under the 1997 Incorporated by reference to
Stock Incentive Plan............................................. Exhibit 10.17 contained in
Select Comfort's Registration
Statement on Form S-1, as
amended (File No. 333-62793)
10 Form of Debenture issued in connection with the SleepTec, Inc. Filed herewith
Asset Purchase Agreement...........................................
</TABLE>
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