UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 9, 2006
SELECT COMFORT CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota
(State or other jurisdiction of incorporation or organization)
0-25121 | 41-1597886 |
| (Commission File No.) | (IRS Employer Identification No.) |
6105 Trenton Lane North, Minneapolis, Minnesota 55442
(Address of principal executive offices) (Zip Code)
(763) 551-7000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement and
Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On June 9, 2006, Select Comfort Corporation (the “Company”) and three of its wholly owned subsidiaries entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent and a syndicate of lenders. The Credit Agreement provides for a $100 million senior unsecured revolving credit facility available to be used by the Company and certain of its domestic subsidiaries for general corporate purposes, including acquisitions. The Company and each of its material subsidiaries is a guarantor of all of the obligations under the credit facility. The Company has the ability to increase available borrowings under the credit facility by an additional amount of up to $75 million by adding additional banks to the facility or obtaining the agreement of the existing banks to increase their commitments. The credit facility matures on June 9, 2011.
No borrowings have been made under the credit facility and the Company does not anticipate drawing on the credit facility at this time. The credit facility provides increased financial flexibility for the Company to pursue its long term growth strategies, both domestically and internationally.
Under the credit facility, the Company will pay quarterly fees ranging from nine basis points to 20 basis points (per annum) of the total facility commitments, depending on the Company’s leverage ratio. At the Company’s current leverage ratio, the quarterly fees will be based on nine basis points per annum. Borrowings under the credit facility bear interest at a floating rate and may be maintained as base rate loans (tied to the prime rate or the federal funds rate plus 0.5%) or as Eurocurrency rate loans tied to LIBOR, plus a margin.
The Credit Agreement requires the Company to comply with maximum leverage and minimum interest coverage ratios. In addition, the Credit Agreement contains other standard affirmative and negative covenants such as those which (subject to certain thresholds) limit the ability of the Company and its subsidiaries to, among other things, incur debt, incur liens, engage in mergers, consolidations, liquidations or acquisitions, enter into new lines of business not related to the Company’s current lines of business, make certain investments, make distributions on or repurchase its equity securities, engage in transactions with affiliates, or enter into certain hedging obligations. Events of default under the Credit Agreement include, among other things, payment defaults, breaches of representations, warranties or covenants, defaults under material indebtedness, certain events of bankruptcy or insolvency, judgment defaults, certain defaults or events relating to employee benefit plans or a change in control of the Company. The events of default would permit the lenders to terminate commitments and accelerate the maturity of borrowings under the credit facility if not cured within applicable grace periods.
The foregoing description of the Credit Agreement is qualified in its entirety by reference to the full and complete terms of the Credit Agreement, which is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference.
2
Item 9.01. Financial Statements and Exhibits
(c) Exhibits.
| Exhibit 10.1 | Credit Agreement dated as of June 9, 2006 among Select Comfort Corporation, the subsidiary borrowers from time to time party thereto, JPMorgan Chase Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent and JPMorgan Chase Bank, National Association, Bank of America, N.A., Citicorp USA, Inc., Wells Fargo Bank, National Association and Branch Banking and Trust Co., as Lenders |
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SELECT COMFORT CORPORATION | |
| (Registrant) | |
| /s/ Mark A. Kimball | |
| Dated: June 14, 2006 | Title: Senior Vice President |
4
EXHIBIT INDEX
Exhibit No. Description
| 10.1 | Credit Agreement dated as of June 9, 2006 among Select Comfort Corporation, the subsidiary borrowers from time to time party thereto, JPMorgan Chase Bank, National Association, as Administrative Agent, Bank of America, N.A., as Syndication Agent and JPMorgan Chase Bank, National Association, Bank of America, N.A., Citicorp USA, Inc., Wells Fargo Bank, National Association and Branch Banking and Trust Co., as Lenders |
5