-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V2dym7HXyczogGPfhi1BmdZC1X/xTbhNMnzJs6nP0pjFczCJeZsiulPuq9HCuSTs n62aqbJyxU6EJ3XQ8NejTg== 0001125282-05-004001.txt : 20050729 0001125282-05-004001.hdr.sgml : 20050729 20050729160634 ACCESSION NUMBER: 0001125282-05-004001 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050331 FILED AS OF DATE: 20050729 DATE AS OF CHANGE: 20050729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMERSON RADIO CORP CENTRAL INDEX KEY: 0000032621 STANDARD INDUSTRIAL CLASSIFICATION: HOUSEHOLD AUDIO & VIDEO EQUIPMENT [3651] IRS NUMBER: 223285224 STATE OF INCORPORATION: DE FISCAL YEAR END: 0402 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-07731 FILM NUMBER: 05984951 BUSINESS ADDRESS: STREET 1: NINE ENTIN RD STREET 2: PO BOX 430 CITY: PARSIPPANY STATE: NJ ZIP: 07054-0430 BUSINESS PHONE: 9738845800 MAIL ADDRESS: STREET 1: NINE ENTIN RD CITY: PARSIPPANY STATE: NJ ZIP: 07054 FORMER COMPANY: FORMER CONFORMED NAME: MAJOR ELECTRONICS CORP DATE OF NAME CHANGE: 19770921 10-K/A 1 b407989_10ka.txt 10-K/A SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ----------------------- FORM 10-K/A (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended March 31, 2005 ---------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-25226 ------- EMERSON RADIO CORP. ------------------- (Exact name of registrant as specified in its charter) Delaware 22-3285224 - -------------------------------------------------------------- --------------------------------------- (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number) Nine Entin Road, Parsippany, NJ 07054 - -------------------------------------------------------------- --------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (973) 884-5800 --------------------------------------- Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered - ------------------- ----------------------------------------- Common Stock, par value $.01 per share American Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None ----
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirement for the past 90 days. [X] YES [ ] NO. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]. Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act) [ ] YES [X] NO Aggregate market value of the voting stock of the registrant held by non-affiliates of the registrant at September 30, 2004 (computed by reference to the last reported sale price of the Common Stock on the American Stock Exchange on such date): $44,451,232. Number of Common Shares outstanding at June 7, 2005: 27,203,164 DOCUMENTS INCORPORATED BY REFERENCE: None The undersigned registrant hereby amends the following items of its Annual Report on Form 10-K for the fiscal year ended March 31, 2005 (the "10-K"): PART III, Items 10 - 14 and PART IV, Item 15 of the 10-K are amended by the inclusion of such items herein. PART III ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS MANAGEMENT OFFICERS AND DIRECTORS The following table sets forth certain information regarding the current officers and Directors of Emerson Radio Corp. ("Emerson", "us" or "Company"):
Name Age Position Fiscal Year Became Officer/Director - ---- --- -------- ----------------------------------- Geoffrey P. Jurick 64 Chairman of the Board, Chief 1992 Executive Officer and President, Director John J. Raab 69 Senior Executive Vice 1995 President and Chief Operating Officer Guy A. Paglinco 48 Vice President, Chief 2004 Financial Officer Patrick Murray 54 President, Emerson Radio 2001 Consumer Products Corporation Elizabeth J. Calianese 47 Senior Vice President - 1995 Human Resources, General Counsel and Corporate Secretary Robert H. Brown, Jr. 51 Director 1993 (1)(2)(3) Peter G. Bunger (2)(3) 64 Director 1993 Jerome H. Farnum (1)(2)(3) 69 Director 1993 Herbert A. Morey (1) 63 Director 2004
- ------------------------------------------- (1) Member of Audit Committee (2) Member of Compensation and Personnel Committee (3) Member of the Nominating Committee 2 GEOFFREY P. JURICK has served as Director since September 1990, Chief Executive Officer since July 1992, Chairman since December 1993 and President since April 1997. From December 1996 until July 2005, Mr. Jurick also served as a Director and Chairman of the Board of Sport Supply Group, Inc. ("SSG") and, from January 1997 to July 2005, Chief Executive Officer of SSG. Following the sale by Emerson of its approximate 53.2% of the issued and outstanding shares of common stock of SSG in July 2005, Mr. Jurick stepped down as Chairman of the Board and Chief Executive Officer of SSG. See "Item 13 - Certain Relationships and Related Transactions". JOHN J. RAAB has served as Chief Operating Officer and Senior Executive Vice President - International since May 2003, Executive Vice President - International from June 2000 to May 2003, Senior Vice President - International from October 1997 to June 2000 and Senior Vice President-Operations from October 1995 to October 1997. GUY A. PAGLINCO has served as Vice President - Finance and Chief Financial Officer since October 2004, as Assistant Vice President - Finance and Controller from May 2001 to October 2004 and as Controller from May 1998 to October 2004. PATRICK MURRAY has served as President of Emerson Radio Consumer Products Corporation since November 2002 and Senior Vice President - Sales, Emerson Radio Consumer Products Corporation from May 2001 to November 2002. Mr. Murray served as Executive Vice President of Motion Systems (Betesh Group) from 1997 to May 2001. Prior thereto, Mr. Murray served as Vice President - Sales and Marketing of Emerson Radio Corp. from 1996 to 1997. ELIZABETH J. CALIANESE has served as General Counsel and Senior Vice President - Human Resources since June 2000 and as Secretary since January 1996. Ms. Calianese served as Vice President-Human Resources and Deputy General Counsel from May 1995 to June 2000. ROBERT H. BROWN, JR. has served as Director since July 1992. Since May 2004, Mr. Brown has been a Managing Partner of August Group, Ltd., a merchant banking firm; from September 2002 to April 2004, Managing Partner of Crosswind Partners LLC, a merchant banking firm; from January 1999 to August 2002, President and Chief Executive Officer of Frost Securities, Inc., an investment banking firm; from July 1998 to January 1999, President of RHB Capital, LLC; from January 1990 to July 1998, held a variety of positions with Dain Rauscher, formerly Rauscher Pierce Refsnes, Inc., including Senior Vice President and Director of the Corporate Finance Department and Executive Vice President of Capital Markets; from April 1996 to March 2003, a Director of Claimsnet.com, which is traded on the Nasdaq Stock Market. PETER G. BUNGER has served as Director since July 1992. Since 1990, Mr. Bunger has been a consultant with Savarina AG, an entity engaged in the business of portfolio management monitoring in Zurich, Switzerland; since October 1992, a Director of Savarina AG; from December 1996 through July 2005, a Director of SSG; and, since 2002, an independent consultant for Emerson's manufacturing efforts in Europe. See "Item 13 - Certain Relationships and Related Transactions". 3 JEROME H. FARNUM has been a Director since July 1992. Since July 1994, Dr. Farnum has been an independent consultant. For at least five years prior to July 1994, Dr. Farnum was a senior executive (in charge of legal and tax affairs, accounting, asset and investment management, foreign exchange relations and financial affairs) with several entities comprising the Fidenas group of companies, whose activities encompassed merchant banking, investment banking, investment management and corporate development. HERBERT A. MOREY has been a Director since August 2004. Since October 2003, Mr. Morey has served on boards of not-for-profit organizations and as a consultant. From June 1962 until his retirement in September 2000, Mr. Morey held a variety of positions with Ernst & Young LLC, including Coordinating Audit Partner of a broad-ranging portfolio of domestic and foreign-owned clients, primarily consumer products and manufacturing companies, Chairman - International Investor Services Group, and Partner in the New York and National offices, focusing on SEC reporting matters and consulting on the application of accounting and auditing standards. BOARD OF DIRECTORS AND COMMITTEES Our business is managed under the direction of our Board of Directors. The Board of Directors meets periodically during our fiscal year to review significant developments affecting Emerson and to act on matters requiring Board of Director approval. The Board of Directors held ten (10) formal meetings during the fiscal year ended March 31, 2005 ("Fiscal 2005") and acted by unanimous written consent one (1) time. During Fiscal 2005, each member of the Board of Directors participated in at least 90% of the aggregate of all meetings of the Board of Directors, and in at least 66% of the aggregate of all meetings of committees on which such member served, that were held during the period. The functions of our Audit Committee, Compensation and Personnel Committee and Nominating Committee and their current members are described below. No member of any of the committees is an employee of Emerson. Since the adoption of the Sarbanes-Oxley Act in July 2002, there has been a growing public and regulatory focus on the independence of directors. Requirements relating to independence are imposed by the Sarbanes-Oxley Act of 2002, the Securities and Exchange Commission and the American Stock Exchange with respect to members of the Audit Committee and the Nominating Committee. The Board of Directors has determined that Messrs. Brown, Bunger, Farnum and Morey satisfy all such definitions of independence. The Board of Directors has determined that Herbert A. Morey constitutes our "audit committee financial expert", as such term is defined by the SEC. Audit Committee. Our Audit Committee is presently comprised of Messrs. Morey (Chairman), Brown and Farnum. The Audit Committee is empowered by the Board of Directors to, among other things: serve as an independent and objective party to monitor Emerson's financial reporting process, internal control system and disclosure control system; review and appraise the audit efforts of Emerson's independent accountants; assume direct responsibility for the appointment, compensation, retention and oversight of the work of the outside auditors and for the resolution of disputes between the outside auditors and Emerson's management regarding financial reporting issues; and provide the opportunity for direct communication among the independent accountants, financial and senior management, and the Board. During Fiscal 2005, the Audit Committee performed its duties under a written charter approved by the Board of Directors, which was filed as Annex A to our Proxy Statement for the fiscal year ended March 31, 2003, filed as of July 29, 2003, and formally met six (6) times. The Audit Committee Charter is posted on our website: www.emersonradio.com on the Investor Relations page. 4 Compensation and Personnel Committee. Our Compensation and Personnel Committee is presently comprised of Messrs. Brown (Chairman), Bunger and Farnum. The Committee (i) makes recommendations to the Board of Directors concerning remuneration arrangements for senior executive management; (ii) administers our stock option plans; and (iii) makes such reports and recommendations, from time to time, to the Board of Directors upon such matters as the committee may deem appropriate or as may be requested by the Board of Directors. During Fiscal 2005, the Compensation and Personnel Committee formally met five (5) times and acted by unanimous written consent one (1) time. Nominating Committee. Our Nominating Committee is presently comprised of Messrs. Brown, Bunger and Farnum. The Nominating Committee is empowered by the Board of Directors to, among other functions: recommend to the Board of Directors qualified individuals to serve on Emerson's Board of Directors and to identify the manner in which the Nominating Committee evaluates nominees recommended for the Board of Directors. Our Nominating Committee did not meet during Fiscal 2005. The Board has adopted a Nominating Committee charter to govern its Nominating Committee, which was filed as Exhibit 3 to our Proxy Statement for the fiscal year ended March 31, 2004, filed as of July 20, 2004. CODES OF ETHICS We have adopted a Code of Ethics for Senior Financial Officers ("Code of Ethics") that applies to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Controller and Treasurer. This Code of Ethics was established with the intention of focusing Senior Financial Officers on areas of ethical risk, providing guidance to help them recognize and deal with ethical issues, providing mechanisms to report unethical conduct, fostering a culture of honesty and accountability, deterring wrongdoing and promoting fair and accurate disclosure and financial reporting. We have also adopted a Code of Conduct for Officers, Directors and Employees of Emerson Radio Corp. and Its Subsidiaries ("Code of Conduct"). We prepared this Code of Conduct to help all officers, Directors and employees understand and comply with our policies and procedures. Overall, the purpose of our Code of Conduct is to deter wrongdoing and promote (i) honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; (ii) full, fair, accurate, timely and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications made by us; (iii) compliance with applicable governmental laws, rules and regulations; (iv) prompt internal reporting of code violations to an appropriate person or persons identified in this Code of Conduct; and (v) accountability for adherence to the Code of Conduct. 5 The Code of Ethics and the Code of Conduct are posted on our website: www.emersonradio.com on the Investor Relations page. If we make any substantive amendments to, or grant any waiver (including any implicit waiver) from a provision of the Code of Ethics or the Code of Conduct, and that relates to any element of the Code of Ethics definition enumerated in Item 406 (b) of Regulation S-K, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K. ITEM 11 - EXECUTIVE COMPENSATION AND OTHER INFORMATION COMPENSATION OF EXECUTIVE OFFICERS The following table sets forth certain information regarding compensation paid to our Chief Executive Officer and each of our other four most highly compensated executive officers (based on salary and bonus earned during Fiscal 2005) for services rendered in all capacities to us during the 2005, 2004 and 2003 fiscal years: 6 SUMMARY COMPENSATION TABLE
OTHER SECURITIES ALL FISCAL ANNUAL UNDERLYING OTHER NAME AND PRINCIPAL POSITION(S) YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION (2) - ------------------------------ ---- ------ ----- ------------ ------- ---------------- GEOFFREY P. JURICK 2005 $500,000 $125,000 $ 80,000 200,000 $ --- CHAIRMAN OF THE 2004 500,000 --- 56,197 --- 3,186 BOARD, CHIEF 2003 411,600 313,000 60,821 --- 3,352 EXECUTIVE OFFICER AND PRESIDENT (1)(3) JOHN J. RAAB 2005 266,863 75,000 --- 100,000 20,402 SENIOR EXECUTIVE VICE 2004 272,560 --- --- --- 20,622 PRESIDENT AND CHIEF OPERATING 2003 257,500 150,000 --- --- 17,744 OFFICER (3) GUY A. PAGLINCO 2005 153,204 --- --- --- 19,764 VICE PRESIDENT, CHIEF FINANCIAL 2004 123,890 12,500 --- --- 15,552 OFFICER 2003 120,000 31,000 --- --- 14,941 PATRICK MURRAY 2005 368,757 --- --- --- 28,553 PRESIDENT - EMERSON 2004 376,627 --- --- --- 28,796 RADIO CONSUMER 2003 360,000 75,000 --- --- 23,897 PRODUCTS CORPORATION ELIZABETH J. CALIANESE 2005 213,491 47,500 --- 100,000 28,146 SENIOR VICE PRESIDENT, GENERAL 2004 218,047 --- --- --- 28,270 COUNSEL AND CORPORATE SECRETARY (3) 2003 206,000 95,000 --- --- 23,930 (3)
- ---------------------------------------------- (1) Other annual compensation consists of temporary lodging expenses. In addition to the amounts set forth in the table above, Mr. Jurick received $250,000 per annum in salary from SSG for services he rendered to SSG. (2) All other compensation consists of Emerson's contribution to our 401(k) employee savings plan, group health, life insurance, disability insurance and auto allowances. (3) In October 2004, Messrs. Jurick and Raab and Ms. Calianese were granted stock options to purchase 200,000, 100,000 and 100,000 shares of common stock, respectively, at an exercise price of $3.26, $2.96 and $2.96 per share, respectively. These options vest in equal installments over three years, commencing one year from the date of grant, and their exercise is contingent on continued employment with Emerson. 7 OPTION GRANTS DURING 2005 FISCAL YEAR The following table provides certain information with respect to options granted to our Chief Executive Officer and to each of the executive officers named in the Summary Compensation Table during Fiscal 2005.
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL RATES OF STOCK PRICE APPRECIATION INDIVIDUAL GRANTS FOR OPTION TERM (2) - ----------------- ------------------- % of Total Number Options Granted Exercise of Options to Employees Price Per Expiration Name Granted (1) In Fiscal 2005 Share Date 5% 10% - ------------------------------------------------------------------------------------------------------------------------ GEOFFREY P. JURICK 200,000 47.1% $3.26 10/19/14 $1,146,816 $1,826,176 JOHN J. RAAB 100,000 23.5 2.96 10/19/14 573,408 913,088 GUY A. PAGLINCO --- --- --- --- --- --- PATRICK MURRAY --- --- --- --- --- --- ELIZABETH J. CALIANESE 100,000 23.5 2.96 10/19/14 573,408 913,088
1. The stock options were granted under the Emerson Radio Corp. 2004 Employee Stock Incentive Plan, and, unless otherwise designated at the time of grant, are exercisable commencing one year after the grant date in three equal annual installments, with full vesting occurring on the third anniversary of the date of the grant. 2. The dollar amounts under these columns are the result of calculations at the assumed compounded market appreciation rates of 5% and 10% as required by the SEC over a ten-year term and therefore, are not intended to forecast possible future appreciation, if any, of the stock price. The disclosure assumes the options will be held for the full ten-year term prior to exercise. Such options may be exercised prior to the end of such ten-year term. The actual value, if any, an executive officer may realize will depend on the excess of the stock price over the exercise price on the date the option is exercised. There can be no assurance that the stock price will appreciate at the rates shown in the table. OPTION EXERCISES DURING FISCAL 2005 AND FISCAL 2005 YEAR END VALUES The following table provides information related to options exercised by our executive officers during Fiscal 2005 and the number and value of options held at the end of Fiscal 2005 by our executive officers. We do not have any outstanding stock appreciation rights. 8
NUMBER OF SECURITIES VALUE OF UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY OPTIONS/SARS OPTIONS/SARS SHARES AT FY-END AT FY-END ACQUIRED VALUE (#) ($)(1) ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/ NAME (#) ($) UNEXERCISABLE UNEXERCISABLE - ------------------------- ------------- ------------ ------------------ ------------------------------ Geoffrey P. Jurick 390,476 $1,229,999 0/200,000 $0/$52,000 John J. Raab --- --- 0/100,000 $0/$56,000 Guy A Paglinco --- --- --- --- Patrick Murray --- --- --- --- Elizabeth J. Calianese --- --- 50,000/100,000 $126,000/$56,000
(1) Based on $3.52 per share, the closing price for our common stock as reported by the American Stock Exchange on March 31, 2005. Value is calculated on the basis of the difference between $3.52 and the option exercise price of "in the money" options, multiplied by the number of shares of our common stock underlying the option. CERTAIN EMPLOYMENT AGREEMENTS Effective as of September 1, 2001, Geoffrey P. Jurick, our Chairman, Chief Executive Officer and President, entered into three-year employment agreements (the "Jurick Employment Agreements") with us and two of our wholly-owned subsidiaries, Emerson Radio (Hong Kong) Limited and Emerson Radio International Ltd. (formerly Emerson Radio (B.V.I.) Ltd.) (hereinafter, collectively the "Companies"), providing for an aggregate annual compensation of $411,600, which was increased to $440,000 effective April 1, 2003, subject to adjustment in the event that Mr. Jurick's employment with SSG is terminated. In the event Mr. Jurick's employment with SSG is terminated, the salary he receives under the Jurick Employment Agreement shall be increased by that amount of salary he was receiving from SSG at the time his employment was terminated. By letter agreement dated effective as of September 1, 2004, the terms of the Jurick Employment Agreements were extended through and including August 31, 2007 with a present base salary of $500,000 from Emerson. In addition to his base salary, Mr. Jurick is entitled to an annual bonus upon recommendation by the Compensation and Personnel Committee of our Board of Directors, subject to the final approval of our Board of Directors. On July 1, 2005, Emerson sold its beneficial ownership interest in SSG. As a result, under the terms of the Jurick Employment Agreements, Mr. Jurick's annual compensation, commencing July 1, 2005, was increased by $250,000 (the amount of salary he was receiving from SSG at the time his employment was terminated) to an aggregate of $750,000. Each of the Jurick Employment Agreements grants to Mr. Jurick severance benefits, through expiration of the respective terms of each of such agreements, commensurate with Mr. Jurick's base salary, on the condition that his employment is terminated due to permanent disability, without cause or as a result of constructive discharge (as defined therein). In the event that Mr. Jurick's employment terminates due to termination for "cause", because Mr. Jurick unilaterally terminates the agreements or for reasons other than constructive discharge or permanent disability, Mr. Jurick shall only be entitled to base salary earned through the applicable date of termination. The Jurick Employment Agreements also contain non-competition provisions which require that, during his employment and through the end of any period in which he receives severance, Mr. Jurick (i) shall not be employed by, have any proprietary interest in or receive any remuneration from any entity in competition with Emerson, and (ii) shall not solicit any of Emerson's customers or clients on behalf of any of Emerson's competitors. Similar provisions are set forth in policies that are incorporated into each of the employment contracts described below. 9 Effective September 1, 2001, John J. Raab, Chief Operating Officer and Senior Executive Vice President, entered into a three-year employment agreement (the "Raab Employment Agreement") with us, providing for an annual compensation of $250,000, which was increased to $257,500, effective April 1, 2002, and $275,000, effective April 1, 2003. By letter agreement dated effective as of September 1, 2004, the term of the Raab Employment Agreement was extended through and including August 31, 2007 and his annual compensation was increased to $286,000, effective April 1, 2005. In addition to his base salary, Mr. Raab may also receive an additional annual performance bonus to be recommended by the Compensation and Personnel Committee of our Board of Directors, subject to the final approval of our Board of Directors. Effective September 1, 2001, Elizabeth J. Calianese, General Counsel, Senior Vice President - Human Resources and Secretary, entered into a three-year employment agreement (the "Calianese Employment Agreement") with us providing for an annual compensation of $200,000, which was increased to $206,000, effective April 1, 2002, and $220,000 effective April 1, 2003. By letter agreement dated effective as of September 1, 2004, the term of the Calianese Employment Agreement was extended through and including August 31, 2007 and her annual compensation was increased to $228,800, effective April 1, 2005. In addition to her base salary, Ms. Calianese is entitled to an annual performance bonus to be recommended by the Compensation and Personnel Committee of our Board of Directors, subject to the final approval of our Board of Directors. We have also agreed for the term of the Calianese Employment Agreement and three years thereafter to pay for and maintain legal malpractice insurance covering Ms. Calianese for occurrences and actions taken by her at any time prior to or during the term of such agreement on behalf of our employees or us. We have also agreed to pay all sums, which may be deductible amounts, not otherwise paid by such insurer. Effective August 8, 2003, we granted Patrick Murray a one-year severance agreement in the event his employment with us is terminated other than for cause (as defined therein). Effective June 14, 2005, we granted Guy A. Paglinco a one-year severance agreement in the event his employment with us is terminated other than for cause (as defined therein). In the event that Messrs. Jurick, Raab and Ms. Calianese were to be terminated due to permanent disability, without cause or as a result of constructive discharge, the estimated dollar amount to be paid after March 31, 2005, to each such individual, based on the terms of their respective contracts, would be $1,750,000, $691,000, and $553,000, respectively. In the event that Messrs. Murray and Paglinco were terminated other than for cause, the estimated dollar amount to be paid after March 31, 2005, based on their severance agreements, would be $380,000 and $182,000, respectively. 10 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Geoffrey P. Jurick serves as Chairman of the Board, Chief Executive Officer and President of Emerson and participated in deliberations concerning Emerson senior executive officer compensation. Until July 1, 2005, Mr. Jurick had also served as Chairman of the Board and Chief Executive Officer of SSG and had participated in deliberations concerning its senior executive officer compensation. As set forth in the Summary Compensation Table above, Mr. Jurick also received $250,000 per annum in salary from SSG for the services he rendered to SSG. Mr. Bunger is a Director of Emerson who serves on the Emerson Compensation and Personnel Committee and, until July 1, 2005, had been a Director of SSG and a member of the SSG Compensation Committee. See "Item 13 - Certain Relationships and Related Transactions - Relationship with Sport Supply Group, Inc.". COMPENSATION OF DIRECTORS During Fiscal 2005, our directors who were not employees, specifically Messrs. Brown, Bunger, Farnum and Morey, were paid $33,333, $21,667, $29,167 and $16,667, respectively, for serving on the Board of Directors and on our various committees during the period. Outside Directors are each paid an annual director's fee of $12,500; members of the Compensation and Personnel Committee are each paid an additional fee of $5,000 per annum; members of the Nominating Committee are each paid an additional fee of $5,000 per annum; members of the Audit Committee are each paid an additional fee of $7,500 per annum; and, the Chairmen of the Audit Committee and the Compensation and Personnel Committee are each paid an additional fee of $5,000 per annum. All directors' fees are paid in four equal quarterly installments per annum. Directors who are our employees are not paid for their services as a director. Additionally, each director, who is not an employee, was previously eligible to participate in our 1994 Non-Employee Director Stock Option Plan and is eligible to participate in our 2004 Non-Employee Outside Director Stock Option Plan ("2004 Director Stock Option Plan"). Directors of Emerson are reimbursed their expenses for attendance at meetings. Further, we offer to provide health care insurance to each of our directors who is not an employee. In Fiscal 2005, Messrs. Brown, Bunger, Farnum and Morey were granted stock options, pursuant to the 2004 Director Stock Option Plan, to purchase 25,000, 25,000, 25,000 and 50,000 shares of common stock, respectively, at an exercise price of $3.00 per share. These options vest in equal installments over three years, commencing one year from the date of grant, and their exercise is contingent upon continued service as a member of our Board of Directors. In Fiscal 2005, Mr. Bunger also received $48,000 in fees for the European manufacturing consulting services he rendered to Emerson. 11 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth, as of July 25, 2005, the beneficial ownership of (i) each current Director; (ii) each of our executive officers named in the Summary Compensation Table ("executive officers"); (iii) our directors and executive officers as a group and (iv) each stockholder known by us to own beneficially more than 5% of our outstanding shares of common stock. Except as otherwise noted, the address of each of the following beneficial owners is c/o Emerson Radio Corp., 9 Entin Road, Parsippany, New Jersey 07054.
Amount and Nature of Name and Address of Beneficial Owners Beneficial Ownership (1) Percent of Class (1) ------------------------------------- ------------------------ -------------------- Geoffrey P. Jurick (2) 10,265,576 37.1% Robert H. Brown, Jr. (3) 25,018 * Peter G. Bunger (4) 42,204 * Jerome H. Farnum (5) 14,333 * Herbert A. Morey (6) 28,667 * John J. Raab -0- -0- Guy A. Paglinco (7) 20,000 * Patrick Murray -0- -0- Elizabeth J. Calianese (8) 50,000 * All Directors and Executive Officers as a Group (9 persons) (9) 10,445,798 37.7%
- -------------------------------------------- (*) Less than one percent. (1) Based on 27,047,666 shares of common stock outstanding as of July 25, 2005. Each beneficial owner's percentage ownership of common stock is determined by assuming that options that are held by such person (but not those held by any other person) and that are exercisable or convertible within 60 days of July 25, 2005 have been exercised. Except as otherwise indicated, the beneficial ownership table does not include common stock issuable upon exercise of outstanding options, which are not currently exercisable within 60 days of July 25, 2005. Except as otherwise indicated and based upon our review of information as filed with the U.S. Securities and Exchange Commission ("SEC"), we believe that the beneficial owners of the securities listed have sole investment and voting power with respect to such shares, subject to community property laws where applicable. (2) Mr. Jurick's beneficial ownership consists of 10,265,576 shares of common stock directly owned by him. Mr. Jurick has pledged 10,015,476 of these shares to a foreign institution to secure a loan obtained by Mr. Jurick in January 2005, in the amount of $16 million. The loan is guaranteed by a third party unaffiliated with us and is currently due on August 22, 2005. 12 (3) Mr. Brown's ownership consists of 16,685 shares of common stock directly owned by him and options to purchase 8,333 shares of our common stock issued pursuant to Emerson's 2004 Non-Employee Outside Director Stock Option Plan that are exercisable within 60 days of July 25, 2005. (4) Mr. Bunger's ownership consists of 33,871 shares of common stock directly owned by him and options to purchase 8,333 shares of our common stock issued pursuant to Emerson's 2004 Non-Employee Director Stock Option Plan that are exercisable within 60 days of July 25, 2005. (5) Mr. Farnum's ownership consists of 6,000 shares of common stock directly owned by him and options to purchase 8,333 shares of our common stock issued pursuant to Emerson's 2004 Non-Employee Director Stock Option Plan that are exercisable within 60 days of July 25, 2005. (6) Mr. Morey's ownership consists of 12,000 shares of common stock directly owned by him and options to purchase 16,667 shares of our common stock issued pursuant to Emerson's 2004 Non-Employee Director Stock Option Plan that are exercisable within 60 days of July 25, 2005. (7) Mr. Paglinco's ownership consists of 20,000 shares of common stock directly owned by him. (8) Ms. Calianese's ownership consists of options issued pursuant to Emerson's 1994 Stock Compensation Program that are exercisable within 60 days of July 25, 2005. (9) Includes 91,666 shares of common stock issuable upon exercise of options that are exercisable within 60 days of July 25, 2005. EQUITY COMPENSATION PLAN INFORMATION The following table gives information about our common stock that may be issued upon the exercise of options and rights under our 1994 Stock Compensation Program, 1994 Non-Employee Director Stock Option Plan, Emerson Radio Corp. 2004 Employee Stock Incentive Plan and 2004 Non-Employee Outside Director Stock Option Plan and exercise of warrants, as of March 31, 2005 (the "Plans"). The 1994 Plans expired in July 2004 and the remainder of the Plans are the only equity compensation plans in existence as of March 31, 2005.
- ----------------------------------------------------------------------------------------------------------------- NUMBER OF SECURITIES TO BE WEIGHTED AVERAGE EXERCISE NUMBER OF SECURITIES ISSUED UPON EXERCISE OF PRICE OF OUTSTANDING REMAINING AVAILABLE FOR OUTSTANDING OPTIONS, OPTIONS, WARRANTS AND FUTURE ISSUANCE UNDER WARRANTS AND RIGHTS RIGHTS EQUITY COMPENSATION PLANS (A) (B) (C) - ----------------------------------------------------------------------------------------------------------------- Equity compensation plans approved by security holders 632,334 $2.81 2,200,000 holders - --------------------------------------------------------------------------------------------------------------- Equity compensation plans not approved by security 100,000 4.00 --- holders - --------------------------------------------------------------------------------------------------------------- TOTAL 732,334 $2.97 2,200,000 - ---------------------------------------------------------------------------------------------------------------
13 SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Securities Exchange Act of 1934, as amended ("Section 16(a)") requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC and the American Stock Exchange. Officers, directors and greater than 10% stockholders are required by certain regulations to furnish us with copies of all Section 16(a) forms they file. Based solely on our review of the copies of such forms received by us, we believe that, during Fiscal 2005, our officers, directors and greater than 10% beneficial owners have complied with all applicable filing requirements with respect to our equity securities. ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS RELATIONSHIP WITH SPORT SUPPLY GROUP, INC. On July 1, 2005, we and Emerson Radio (Hong Kong) Limited ("Emerson HK"), our wholly owned subsidiary, sold all of the issued and outstanding shares of SSG common stock, which we owned, aggregating 4,746,023 shares, or approximately 53.2% ownership of SSG, for $32 million or $6.74 per share. Prior to July 1, 2005 and during Fiscal 2005, our Board of Directors included the following people that were associated with SSG: Geoffrey P. Jurick, our Chairman, Chief Executive Officer and President and Chairman and Chief Executive Officer of SSG, and Peter G. Bunger, a Director of both companies and member of the Compensation Committee of each company. During 1997, we entered into a management services agreement with SSG in an effort to share certain administrative and logistic functions and to enable SSG and Emerson to reduce certain costs. In connection with the sale of our interest in SSG, the management services agreement was amended to permit termination of various defined Transition Services on one hundred twenty (120) days' prior notice by either Emerson or SSG in order to facilitate the parties' transition of the Transition Services to another provider. We incurred net fees of $206,000, $319,000 and $307,000 for services provided pursuant to this agreement during Fiscal 2005, 2004 and 2003, respectively. FUTURE TRANSACTIONS We have adopted a policy that all future affiliated transactions will be made or entered into on terms no less favorable to us than those that can be obtained from unaffiliated third parties. In addition, all future affiliated transactions, must be approved by a majority of the independent outside members of our Board of Directors who do not have an interest in the transactions. 14 ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the Audit Committee's charter, all audit and audit-related work and all non-audit work performed by our independent accountants, BDO, is approved in advance by the Audit Committee, including the proposed fees for such work. The Audit Committee is informed of each service actually rendered. Prior to March 31, 2004, when BDO was retained by us as our independent accountants, Ernst & Young, LLP ("Ernst & Young") served as our independent accountants during Fiscal 2004. >> Audit Fees. Audit fees billed to us by BDO for the audit of the financial statements included in our Annual Reports on Form 10-K, and reviews by Ernst & Young and BDO of the financial statements included in our Quarterly Reports on Form 10-Q, for the fiscal years ended March 31, 2004 and 2005 totaled approximately $258,000 and $242,000, respectively. >> Audit-Related Fees. We were billed $11,000 and $16,000 by BDO for the fiscal years ended March 31, 2004 and 2005, respectively, for assurance and related services that are reasonably related to the performance of the audit or review of Emerson's financial statements and are not reported under the caption Audit Fees above. >> Tax Fees. BDO billed us an aggregate of $117,000 and $196,000, for the fiscal years ended March 31, 2004 and 2005, respectively, for tax services, principally related to the preparation of income tax returns and related consultation. >> All Other Fees. We were billed $195,000 and $0 by BDO for the fiscal years ended March 31, 2004 and 2005, respectively, for permitted non-audit services, principally consultation related to mergers and acquisitions. Applicable law and regulations provide an exemption that permits certain services to be provided by our outside auditors even if they are not pre-approved. We have not relied on this exemption at any time since the Sarbanes-Oxley Act was enacted. CHANGE IN ACCOUNTANTS As discussed above and previously reported in a Form 8-K dated April 2, 2004, on March 31, 2004, we retained the services of BDO as our independent auditors to replace our former independent auditors, Ernst & Young. This engagement and replacement was approved by our Board of Directors on the recommendation of our Audit Committee. During our two recent fiscal years ended March 31, 2003 and March 31, 2004, respectively, we did not consult with BDO regarding any matters noted in Items 304(a) of Regulation S-K. BDO has provided tax services to us during the fiscal years ended March 31, 2003, 2004 and 2005 and is expected to continue to provide such services to us. 15 There have been no "disagreements" within the meaning of Item 304(a)(1)(iv) of Regulation S-K, or any events of the type listed in Item 304(a)(1)(v)(A) through (D) of Regulation S-K, involving Ernst & Young that occurred within our two recent fiscal years ended March 31, 2003 and March 31, 2004, respectively. Ernst & Young's report on our financial statements for the fiscal year ended March 31, 2003 did not contain any adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES (a) Financial Statements and Schedules. See Item 8 (b) Exhibits Exhibit Number - -------------- 3.1 Certificate of Incorporation of Emerson (incorporated by reference to Exhibit (3) (a) of Emerson's Registration Statement on Form S-1, Registration No. 33-53621, declared effective by the SEC on August 9, 1994). 3.2 Amended and Restated Certificate of Incorporation of Sport Supply Group, Inc. (incorporated by reference to Exhibit 4.1 of Sport Supply's Registration Statement on Form S-8, Registration No. 33-80028). 3.3 Certificate of Amendment of Amended and Restated Certificate of Incorporation of Sport Supply Group, Inc. (incorporated by reference to Exhibit 4.1 of Sport Supply's Registration Statement on Form S-8, Registration No. 33-80028). 3.4 Certificate of Designation for Series A Preferred Stock (incorporated by reference to Exhibit (3) (b) of Emerson's Registration Statement on Form S-1, Registration No. 33-53621, declared effective by the SEC on August 9, 1994). 3.5 Amendment dated February 14, 1996 to the Certificate of Incorporation of Emerson (incorporated by reference to Exhibit (3) (a) of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 1995). 3.6 By-Laws of Emerson adopted March 1994 (incorporated by reference to Exhibit (3) (e) of Emerson's Registration Statement on Form S-1, Registration No. 33-53621, declared effective by the SEC on August 9, 1994). 3.7 Amendment dated November 28, 1995 to the By-Laws of Emerson adopted March 1994 (incorporated by reference to Exhibit (3) (b) of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 1995). 16 3.8 Amended and Restated Bylaws of Sport Supply Group, Inc. (incorporated by reference to Exhibit 3.2 of Sport Supply's Annual Report on Form 10-K for the year ended November 1, 1996). 10.4 Stipulation of Settlement and Order dated June 11, 1996 by and among the Official Liquidator of Fidenas International Bank Limited, Petra Stelling, Barclays Bank PLC, the Official Liquidator of Fidenas Investment Limited, Geoffrey P. Jurick, Fidenas International Limited, L.L.C., Elision International, Inc., GSE Multimedia Technologies Corporation and Emerson (incorporated by reference to Exhibit 10(af) of Emerson's Annual Report on Form 10-K for the year ended March 31, 1996). 10.5 Pledge Agreement dated as of February 4, 1997 by Fidenas International Limited, L.L.C. ("FIN") in favor of TM Capital Corp. (incorporated by reference to Exhibit (10) (a) of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 1996). 10.6 Registration Rights Agreement dated as of February 4, 1997 by and among Emerson, FIN, the Creditors, FIL and TM Capital Corp. (incorporated by reference to Exhibit (10) (b) of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 1996). 10.7 Securities Purchase Agreement dated as of November 27, 1996, by and between Sport Supply Group, Inc. ("SSG") and Emerson (incorporated by reference to Exhibit (2)(a) of Emerson's Current Report on Form 8-K dated November 27, 1996). 10.9 Form of Registration Rights Agreement by and between SSG and Emerson (incorporated by reference to Exhibit (4)(b) of Emerson's Current Report on Form 8-K dated November 27, 1996). 10.12 License Agreement effective as of January 1, 2001 by and between Funai Corporation and Emerson (incorporated by reference to Exhibit (10) (z) of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2000). 10.12.1 First Amendment to License Agreement dated February 19, 2002 by and between Funai Corporation and Emerson (incorporated by reference to Exhibit (10.12.1) of Emerson's Annual Report on Form 10-K for the year ended March 31, 2002). 10.12.2 Second Amendment to License Agreement effective August 1, 2002 by and between Funai Corporation and Emerson (incorporated by reference to Exhibit (10.12.2) of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002). 17 10.12.3 Third Amendment to License Agreement effective February 18, 2004 by and between Funai Corporation and Emerson (incorporated by reference to Exhibit 10.12.3 of Emerson's Annual Report on Form 10-K for the year ending March 31, 2004) 10.12.4 Fourth Amendment to License Agreement effective December 3, 2004 by and between Funai Corporation, Inc. and Emerson (incorporated by reference to Exhibit (10.12.4) of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2004). 10.12.5 Fifth Amendment to License Agreement effective May 18, 2005 by and between Funai Corporation, Inc. and Emerson. (incorporated by reference to Exhibit 10.12.5 of Emerson's Annual Report on Form 10-K for the year ended March 31, 2005). 10.13 Second Lease Modification dated as of May 15, 1998 between Hartz Mountain, Parsippany and Emerson (incorporated by reference to Exhibit (10) (v) of Emerson's Annual Report on Form 10-K for the year ended April 3, 1998). 10.13.1 Third Lease Modification made the 26 day of October, 1998 between Hartz Mountain Parsippany and Emerson (incorporated by reference to Exhibit (10) (b) of Emerson's Quarterly Report on Form 10-Q for the quarter ended October 2, 1998). 10.13.2 Fourth Lease Modification made the 12th day of February, 2003 between Hartz Mountain Parsippany and Emerson (incorporated by reference to Exhibit (10.13.2) of Emerson's Annual Report on Form 10-K for the year ended March 31, 2003). 10.13.3 Lease Agreement dated as of October 8, 2004 between Sealy TA Texas, L.P., a Georgia limited partnership, and Emerson Radio Corp. (incorporated by reference to Exhibit (10.13.3) of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004). 10.13.4 Fifth Lease Modification Agreement made the 2nd day of December, 2004 between Hartz Mountain Industries, Inc. and Emerson (incorporated by reference to Exhibit (10.13.3) of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2004). 10.14.1 Purchasing Agreement, dated March 5, 1999, between AFG- Elektronik GmbH and Emerson Radio International Ltd. (incorporated by reference to Exhibit (10) (aa) of Emerson's Annual Report on Form 10-K for the year ended April 2, 1999). 18 10.15 Second Amendment to Lease made the 10th day of June, 2004 between ProLogis and Sport Supply Group, Inc. (incorporated by reference to Exhibit 10.15 of Emerson's Annual Report on Form 10-K for the year ended March 31, 2004). 10.16 Letter of Employment for Patrick Murray, dated May 3, 2001 (incorporated by reference to Exhibit 10.16 of Emerson's Annual Report on Form 10-K for the year ended March 31, 2001). 10.17 Form of Indemnification Agreement entered into between Sport Supply and each of the directors of Sport Supply and Sport Supply's General Counsel (incorporated by reference to Exhibit 10.3 of Sport Supply's Registration Statement on Form S-1, Registration No. 33-39218). 10.18 Sport Supply Group, Inc. Amended and Restated Stock Option Plan (incorporated by reference to Exhibit 4.1 of Sport Supply's Registration Statement on Form S-1, Registration No. 33-27193). 10.18.1 Emerson Radio Corp. 2004 Employee Stock Incentive Plan (incorporated by reference to Exhibit 1 of Emerson's 2004 Proxy Statement). 10.18.2 Emerson Radio Corp. 2004 Non-Employee Outside Director Stock Option Plan (incorporated by reference to Exhibit 2 of Emerson's 2004 Proxy Statement). 10.19 Assignment and Assumption Agreement, dated to be effective as of February 28, 1992, by and between Aurora and Sport Supply Group, Inc. (incorporated by reference to Exhibit 10.27 of Sport Supply's Annual Report on Form 10-K for the year ended 1991). 10.21 License Agreement, dated as of September 23, 1991, by and between Proacq Corp. and Sport Supply Group, Inc. (incorporated by reference to Exhibit 10.17 of Sport Supply's Annual Report on Form 10-K for the year ended 1991). 10.22 Sport Supply Group Employees' Savings Plan dated June 1, 1993 (incorporated by reference to Exhibit 10.27 of Sport Supply's Annual Report on Form 10-K for the year ended 1993). 10.23 Management Services Agreement dated July 1, 1997 to be effective as of March 7, 1997 by and between Sport Supply Group, Inc. and Emerson (incorporated by reference to Exhibit 10.2 of Sport Supply's Quarterly Report on Form 10-Q for the quarter ended August 1, 1997 ). 19 10.23.1 Amended and Restated Management Services Agreement dated July 1, 2005 by and between Sport Supply Group, Inc. and Emerson* 10.26 Employment Agreement between Emerson Radio Corp. and John J. Raab, effective as of September 1, 2001 (incorporated by reference to Exhibit 10.26 of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001). 10.26.1 Employment Agreement between Emerson Radio Corp. and Elizabeth J. Calianese McPartland, effective as of September 1, 2001 (incorporated by reference to Exhibit 10.26.1 of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001). 10.26.2 Letter re Employment Agreement between Emerson Radio Corp., Emerson Radio International Ltd., Emerson Radio (Hong Kong) Limited and Geoffrey P. Jurick, effective as of September 1, 2001 (incorporated by reference to Exhibit 10.26.2 of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2001). 10.26.3 Employment Agreement extension letter between Emerson Radio Corp., Emerson Radio International Ltd., Emerson Radio (Hong Kong Limited and Geoffrey P. Jurick effective as of September 1, 2004 (incorporated by reference to Exhibit 10.26.3 of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2004). 10.26.4 Employment Agreement extension letter between Emerson Radio Corp. and John J. Raab effective as of September 1, 2004 (incorporated by reference to Exhibit 10.26.4 of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2004). 10.26.5 Employment Agreement extension letter between Emerson Radio Corp. and Elizabeth J. Calianese McPartland effective as of September 1, 2004 (incorporated by reference to Exhibit 10.26.5 of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2004). 10.27 Revolving Credit and Term Loan Agreement dated June 28, 2002 among Emerson Radio Corp., Majexco Imports, Inc., Emerson Radio (Hong Kong) Ltd., and Emerson Radio International Ltd. Jointly and Severally, and PNC Bank, National Association (incorporated by reference to Exhibit 10.27 of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2002). 10.27.1 Amendment to Revolving Credit and Term Loan Agreement (Number One) dated November 7, 2003 among Emerson Radio Corp., Majexco Imports, Inc., Emerson Radio (Hong Kong) Ltd., and Emerson Radio International Ltd. Jointly and Severally, and PNC Bank, National Association (incorporated by reference to Exhibit 10.27.1 of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2003). 20 10.27.2 Amendment to Revolving Credit and Term Loan Agreement (Number Two) dated December 31, 2003 among Emerson Radio Corp., Majexco Imports, Inc., Emerson Radio (Hong Kong) Ltd., and Emerson Radio International Ltd. Jointly and Severally, and PNC Bank, National Association (incorporated by reference to Exhibit 10.27.2 of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2003). 10.27.3 Amendment to Revolving Credit and Term Loan Agreement (Number Three) and Waiver dated June 28, 2004, among Emerson Radio Corp., Majexco Imports, Inc., Emerson Radio (Hong Kong) Ltd., and Emerson Radio International Ltd. Jointly and Severally, and PNC Bank, National Association (incorporated by reference to Exhibit 10.27.3 of Emerson's Quarterly Report on Form 10-Q for the quarter ended June 30, 2004). 10.27.4 Amendment and Restated Revolving Credit and Term Loan Agreement dated as of June 27, 2005, among Emerson Radio Corp., Emerson Radio Macao Commercial Offshore Limited, Majexco Imports, Inc., Emerson Radio (Hong Kong) Ltd., and Emerson Radio International Ltd., and PNC Bank, National Association. (incorporated by reference to Exhibit 10.27.4 of Emerson's Annual Report on Form 10-K for the year ended March 31, 2005). 10.28 Common Stock Purchase Warrant Agreement entered into on August 1, 2002 by and between Emerson Radio Corp. and Further Lane Asset Management LP (incorporated by reference to Exhibit 10.28 of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2002). 10.28.1 Form of Common Stock Warrant Agreement entered into on October 7, 2003 by and between Emerson Radio Corp. and Ladenburg Thalmann & Co., Inc. (incorporated by reference to Exhibit 10.28.1 of Emerson's Quarterly Report on Form 10-Q for the quarter ended December 31, 2003). 10.28.2 Common Stock Purchase Warrant Agreement entered into on August 1, 2004 by and between Emerson Radio Corp. and EPOCH Financial Services, Inc. (incorporated by reference to Exhibit 10.28.2 of Emerson's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004). 10.29 Separation Agreement dated September 15, 2003 between SSG and John P. Walker (incorporated by reference to Exhibit 10.1 of Sport Supply's Quarterly Report on Form 10-Q for the quarter ended September 26, 2003). 21 10.35 Loan and Security Agreement dated March 27, 2001 by and between Sport Supply Group, Inc. and Congress Financial Corporation (incorporated by reference to Exhibit 10.29 of Sport Supply's Annual Report on Form 10-K for the year ended March 30, 2001). 10.35.1 First Amendment to the Loan and Security Agreement dated October 1, 2002 by and between Sport Supply Group, Inc. and Congress Financial Corporation (incorporated by reference to Exhibit 10.2 of Sport Supply's Quarterly Report on Form 10-Q for the quarter ended December 27, 2002). 10.35.2 Second Amendment to Loan and Security Agreement dated June 27, 2003 by and between Sport Supply Group, Inc. and Congress Financial Corporation (incorporated by reference to Exhibit 10.1 of Sport Supply's Quarterly Report on Form 10-Q for the quarter ended June 27, 2003). 10.35.3 Third Amendment to Loan and Security Agreement dated November 6, 2003 by and between Sport Supply Group, Inc. and Congress Financial Corporation (incorporated by reference to Exhibit 10.4 of Sport Supply's Quarterly Report on Form 10-Q for the quarter ended September 26, 2003). 10.35.4 Fourth Amendment to Loan and Security Agreement dated December 29, 2003 by and between Sport Supply Group, Inc. and Congress Financial Corporation (incorporated by reference to Exhibit 10.1 of Sport Supply's Quarterly Report on Form 10-Q for the quarter ended December 26, 2003). 10.35.5 Fifth Amendment to Loan and Security Agreement dated February 19, 2004 by and between Sport Supply Group, Inc. and Congress Financial Corporation (incorporated by reference to Exhibit 10.35.5 of Emerson's Annual Report on Form 10-K for the year ended March 31, 2004). 10.36 Stock Purchase Agreement among Collegiate Pacific Inc., Emerson Radio Corp. and Emerson Radio (Hong Kong) Limited, dated July 1, 2005 (incorporated by reference to Exhibit 2.1 of Emerson's Current Report on Form 8-K dated July 1, 2005). 14.1 Code of Ethics for Senior Financial Officers (incorporated by reference to Exhibit 14.1 of Emerson's Annual Report on Form 10-K for the year ended March 31, 2004). 21.1 Subsidiaries of the Company as of March 31, 2005. (incorporated by reference to Exhibit 21.1 of Emerson's Annual Report on Form 10-K for the year ended March 31, 2005). 22 23.1 Consent of Independent Registered Public Accounting Firm - BDO Seidman, LLP. (incorporated by reference to Exhibit 23.1 of Emerson Annual Report on Form 10-K for the year ended March 31, 2005). 23.2 Consent of Independent Registered Public Accounting Firm - Ernst & Young, LLP. (incorporated by reference to Exhibit 23.2 of Emerson Annual Report on Form 10-K for the year ended March 31, 2005). 31.1 Certification of the Company's Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 31.2 Certification of the Company's Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* 32 Certification of the Company's Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* - ------------------- * Filed herewith. 23 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the date indicated. /s/ Geoffrey P. Jurick Chairman of the Board, July 29, 2005 Geoffrey P. Jurick Chief Executive Officer and President /s/ Guy A. Paglinco Vice President - Finance, July 29, 2005 Guy A. Paglinco Chief Financial Officer /s/ Robert H. Brown, Jr. Director July 29, 2005 Robert H. Brown, Jr. /s/ Peter G. Bunger Director July 29, 2005 Peter G. Bunger /s/ Jerome H. Farnum Director July 29, 2005 Jerome H. Farnum /s/ Herbert A. Morey Director July 29, 2005 Herbert A. Morey 24 EX-10.23.1 2 b407989ex10_23-1.txt EX-10.23.1 EXHIBIT 10.23.1 AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT THIS AMENDED AND RESTATED MANAGEMENT SERVICES AGREEMENT (the "Agreement"), is made and entered into on July 1, 2005 (the "Effective Date"), by and between Sport Supply Group, Inc., a Delaware corporation ( "SSG"), and Emerson Radio Corp., a Delaware corporation ("Emerson"). WHEREAS, Emerson and SSG entered into a Management Services Agreement on July 1, 1997 to be effective as of March 7, 1997 (such agreement, as amended to date, is referred to herein as the "Original MSA"). WHEREAS, pursuant to the Stock Purchase Agreement to be entered into among Collegiate Pacific Inc., a Delaware corporation (the "Buyer"), Emerson and Emerson Radio (Hong Kong) Limited (the "Stock Purchase Agreement"), the Buyer will purchase from Emerson and Emerson Radio (Hong Kong) Limited all shares of capital stock of SSG owned by Emerson and Emerson Radio (Hong Kong) Limited (the "Shares"). WHEREAS, it is a condition to the Buyer's purchase of the Shares that SSG and Emerson enter into this Agreement to amend and restate the Original MSA in its entirety. WHEREAS, Emerson and SSG desire to amend and restate the Original MSA in its entirety with this Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, SSG and Emerson hereby agree as follows: ARTICLE I MANAGEMENT SERVICES 1.1 SSG Responsibilities. Emerson and SSG hereby agree that, during the term of this Agreement, SSG will be responsible for providing Emerson with the following services: (a) Process payroll and payroll taxes for Emerson's employees and assist Emerson by enrolling Emerson employees in Emerson's employee benefit plans, and process the payment of insurance premiums to Emerson's benefit providers so long as Emerson submits the correct amount of the premium to SSG on a timely basis (subject to SSG receiving from Emerson all of the necessary information, which is not in SSG's possession, custody or control, required to fulfill these functions) (collectively, "Human Resource Services"). Such Human Resource Services shall be performed on a timely basis in accordance with industry standards. (b) Process Emerson's accounts payables and process checks to be delivered, approved and signed by an officer of Emerson (collectively, the "Payable Services"); (c) Provide office space (subject to availability and in no event after the time SSG ceases to occupy the office space currently occupied by SSG at 1901 Diplomat Drive, Farmers Branch, Texas, in which event SSG shall provide Emerson with at least thirty (30) days prior written notice of vacating such space) for certain employees of Emerson at SSG's office located at 1901 Diplomat Drive, Farmers Branch, Texas 75234, or such other mutually agreeable location (collectively, the "Office Space"). (d) Incorporate the EmersonRadio.com website into SSG's websites for hosting and fulfillment in accordance with the terms of Exhibit A attached hereto (collectively, the "Internet Services"); and (e) Subject to the terms and provisions of an agreement between SSG and Amazon.com, support EmersonRadio.com products offered for sale on Amazon.com in accordance with the terms of Exhibit B attached hereto (collectively, the "Amazon Services"). All of the services set forth in this Section 1.1 shall be collectively referred to in this Agreement as the "SSG Services". Notwithstanding the foregoing, SSG will not be responsible for providing any services to Emerson not expressly set forth herein, including, without limitation, any legal or tax related services; provided, however, SSG will provide the necessary data as reasonably requested by ADP to enable ADP to prepare Emerson's payroll tax returns. 1.2 Emerson Responsibilities. Emerson and SSG hereby agree that, during the term of this Agreement, Emerson will be responsible for providing SSG with the following services consistent with past practices: (a) Emerson will furnish to SSG all information and data, not in SSG's custody or control, reasonably necessary for SSG to provide the SSG Services, including, without limitation, all payroll files and employee payroll and other information that SSG may advise Emerson it requires to perform the SSG Services under this Agreement. SSG shall be entitled to rely upon the accuracy and completeness of all information that it reasonably believes to have been furnished to it by Emerson or at Emerson's direction, and shall have no duty to inquire about such information. SSG acknowledges no changes to Emerson's corporate payroll records will be made without the prior written consent of Emerson. (b) Calculate daily borrowing availability with respect to SSG's secured credit facility, prepare daily reporting for SSG's banks, prepare forecasts of cash availability and cash flow, wire funds and set-up letters of credit as may be requested by an officer of SSG, or an authorized agent of SSG for which Emerson receives notice of such authorization from an officer of SSG from time to time (collectively, the "Treasury Management Services"). (c) Emerson will provide record keeping and accounting services for Sport Supply Group Asia, Ltd., SSG's wholly-owned subsidiary ("SSG Asia"). (d) Emerson shall be solely responsible for resolving any dispute between Emerson and any employee of Emerson and answering any inquiries relating to an Emerson employee's rights and entitlements under Emerson's benefit plans. Emerson is solely responsible for the administration of its benefit plans (including, without limitation, its 401(k) Plan ) and executing and filing with any governmental authority or other person all reports or other documents required in connection with such benefit plans, and SSG shall have no reporting obligation in connection with any aspect of Emerson's benefit plans. In addition, SSG shall not be deemed a fiduciary or plan administrator of Emerson or any of Emerson's benefit plans and shall not have any responsibility to monitor compliance by Emerson with the terms and conditions of any benefit plan or any law applicable thereto. All of the services set forth in this Section 1.2 shall be collectively referred to in this Agreement as the "Emerson Services". 1.3 Cooperation. Each party hereto shall cooperate with the other party by, among other things, making available, as reasonably requested by the requesting party, management decisions, personnel information, approvals and acceptances in order that the work of each party contemplated hereby may be accomplished. 1.4 Insurance. SSG will not be liable to Emerson or any of the employees or contractors of Emerson for damage or loss to person or property, including theft, burglary, assault, vandalism or other crimes, unless such damage or loss is caused by the gross negligence or willful misconduct of SSG. SSG will not be liable to Emerson or any of its employees or contractors for personal injury or for damage to or loss of their personal property from fire, flood, water leaks, rain, hail, ice, snow, smoke, lightning, wind, explosions, strike, war, riot, terrorism, insurrection, interruption of utilities or other occurrences unless such injury, loss or damage is caused by the gross negligence or willful misconduct of SSG. Emerson acknowledges that none of the Office Space is fireproof. Emerson is strongly urged to secure its own insurance to protect against all of the above. Emerson agrees to carry appropriate insurance for inventory and other property stored at the Office Space. 1.5 Permissible Activities. Nothing herein shall in any way preclude Emerson or SSG from engaging in any business activities or from performing services for its own account or for the account of others. ARTICLE II COMPENSATION 2.1 SSG Service Charges. Emerson and SSG hereby agree that, effective July 1, 2005 (except as otherwise noted) SSG will be compensated at the initial rates set forth below for the services rendered by SSG to Emerson pursuant to this Agreement: Services Amount in U.S. Dollars -------- ---------------------- Human Resource Services $3,333 per month Payable Services $1,000 per month Office Space $5.00 per square foot Internet Services See Exhibit A attached hereto Amazon Services See Exhibit B attached hereto The amount of such service charges may be adjusted from time to time by the parties' mutual written agreement. Such service charges shall be payable within thirty (30) days of the date an invoice is received. Partial months shall be prorated accordingly. Emerson will also be responsible for paying all of SSG's out-of-pocket expenses related to the above services , such as postage, telephone and telecopy bills, telephone lines, office supplies, transition services, etc. The payment of any expenses incurred by SSG on Emerson's behalf in excess of $1,000 requires Emerson's written consent. 2.2 Emerson Service Charges. Emerson and SSG hereby agree that, effective July 1, 2005 Emerson will be compensated at the initial rates set forth below for the services rendered by Emerson to SSG pursuant to this Agreement: Services Amount in U.S. Dollars -------- ---------------------- SSG Asia $$834 per month Treasury Management Services $2,450 per month The amount of such service charges may be adjusted from time to time by the parties' mutual written agreement. Such service charges shall be payable within thirty (30) days of the date an invoice is received. Partial months shall be prorated accordingly. SSG will also be responsible for paying all of Emerson's out-of-pocket expenses related to the above services, such as postage, telephone and telecopy bills, telephone lines, office supplies, transition services, etc. The payment of any expenses incurred by Emerson on SSG's behalf in excess of $1,000 requires SSG's written consent. ARTICLE III TERM AND TERMINATION 3.1 Term. Subject to the right of termination in Section 3.3 and Section 3.4, SSG shall provide the Human Resource Services, Payable Services and Office Space and Emerson shall provide the Treasury Management Services (collectively the "Transition Services") for a transition period beginning on the Effective Date for a period of up to 120 days or such longer period as Emerson and SSG may mutually agree (the "Transition Date") in order to facilitate the parties' transition of the Transition Services to another provider. Emerson and SSG have the right to direct that any or all of the Transition Services being provided to it by the other party be terminated prior to the Transition Date. With respect to all other SSG Services and Emerson Services, this Agreement shall become effective as of the Effective Date and shall continue in force until terminated pursuant to the terms of this Agreement or otherwise agreed by the parties. 3.2 Termination. Subject to the provisions of Section 3.1 hereof, all services under this Agreement, other than Transition Services, may be terminated by either party on sixty (60) days' prior written notice to the other party. 3.3 Termination for Nonpayment. Notwithstanding Section 3.1 or Section 3.2 hereof, in the event that either party defaults in the payment when due of any amount due to the other hereunder and does not cure such default within ten (10) days after being given written notice of such default, then the non-defaulting party may, by giving written notice thereof to the defaulting party, terminate this Agreement as of the date specified in such notice of termination. 3.4 Termination for Insolvency. Notwithstanding Section 3.1 or Section 3.2 hereof, in the event that either party hereto becomes or is declared insolvent or bankrupt, is the subject of any proceedings relating to its liquidation, insolvency or for the appointment of a receiver or similar office for it, makes an assignment for the benefit of all or substantially all of its creditors, or enters into an agreement for the composition, extension, or readjustment of all or substantially all of its obligations, then the other party hereto may, by giving written notice thereof to such party, terminate this Agreement as of the date specified in such notice of termination. 3.5 Return of Records. Upon the termination of this Agreement for any reason, SSG shall promptly return to Emerson all books, records, documents, information and data (including data stored in computers or on any computer media or equipment), including all copies of the foregoing, that belong to Emerson and Emerson shall promptly return to SSG all books, records, documents, information and data (including data stored in computers or on any computer media or equipment), including all copies of the foregoing, that belong to SSG. ARTICLE IV GENERAL PROVISIONS 4.1 Confidentiality. Each party agrees that all information communicated to it by the other, whether before or after the Effective Date, was and shall be received in strict confidence and shall be used only for the purposes of this Agreement, and that no such information, including, without limitation, the provisions of this Agreement, shall be disclosed or otherwise used by a party to this Agreement or its security holders, directors, officers, employees, or agents, without the prior written consent of the other party, except as may be necessary by reason of legal, accounting or regulatory requirements. The requirements and obligations of this Section 4.1 shall survive the termination of this Agreement. 4.2 Indemnification. (a) SSG agrees to indemnify, defend and hold harmless Emerson and its affiliates and their respective directors, officers, agents, employees and controlling persons from and against any and all losses, claims, damages, liabilities and expenses (including the reasonable cost of investigating and defending against any claims therefor and reasonable counsel fees and expenses incurred in connection therewith) that resulted solely from the willful bad faith or gross negligence of SSG in the performance of the SSG Services that are the subject of this Agreement. No express or implied warranty is made by SSG in respect to any SSG Service or product provided hereunder including, without limitation, any implied warranty or merchantibility or fitness for a particular purpose. (b) Emerson agrees to indemnify, defend and hold harmless SSG and its affiliates and their respective directors, officers, agents, employees and controlling persons from and against any and all losses, claims, damages, liabilities and expenses (including the reasonable cost of investigating and defending against any claims therefor and reasonable counsel fees and expenses incurred in connection therewith) (i) that resulted solely from the willful bad faith or gross negligence of Emerson in the performance of the Emerson Services that are the subject of this Agreement or (ii) related to or arising out of SSG's use of Emerson's Brand Names and Marks, as described in Section 4.15 below). No express or implied warranty is made by Emerson in respect to any Emerson Service or product provided hereunder including, without limitation, any implied warranty or merchantibility or fitness for a particular purpose. (c) IN NO EVENT WILL EITHER PARTY BE LIABLE FOR PUNITIVE DAMAGES OR FOR INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST PROFITS OF ANY PARTY, INCLUDING THIRD PARTIES. FURTHER, NO CAUSE OF ACTION WHICH ACCRUED MORE THAN ONE (1) YEAR PRIOR TO THE FILING OF A SUIT ALLEGING SUCH CAUSE OF ACTION MAY BE ASSERTED AGAINST EITHER PARTY. 4.3 Relationship of Parties. It is the express intention and understanding of SSG and Emerson that the relationship of SSG and Emerson shall be at all times that of an independent contractor, with each party having full and complete liberty to use its own free and uncontrolled will, judgment and discretion as to the method and manner of performing the obligations of such party hereunder. Other than the SSG Services specifically stated herein to be performed by SSG, SSG does not undertake by this Agreement or otherwise to perform any regulatory or contractual obligation of Emerson, or to assume any responsibility for Emerson's business or operations. Other than the Emerson Services specifically stated herein to be performed by Emerson, Emerson does not undertake by this Agreement or otherwise to perform any regulatory or contractual obligation of SSG, or to assume any responsibility for SSG's business or operations. Nothing herein contained or done pursuant to this Agreement shall constitute SSG or its agents or employees a partner or joint venturer of Emerson, or a fiduciary of (i) Emerson, (ii) any benefit plan of Emerson, or (iii) any employee of Emerson. Nothing herein contained or done pursuant to this Agreement shall constitute Emerson or its agents or employees a partner or joint venturer of SSG, or a fiduciary of (i) SSG, (ii) any benefit plan of SSG, or (iii) any employee of SSG. 4.4 Notices. All notices that are required or may be given pursuant to the terms of this Agreement shall be in writing and shall be sufficient in all respects if given in writing and delivered personally, by commercial messenger service, or by registered or certified mail, postage prepaid, to the other party at the following address or to such other address as either party shall provide to the other party in writing in accordance with this Section 4.4: If to SSG: If to Emerson: Sport Supply Group, Inc. Emerson Radio Corp. 1901 Diplomat Drive Nine Entin Road Farmers Branch, Texas 75234 Parsippany, New Jersey 07054 Attn: Chief Executive Officer Attn: Chief Executive Officer cc: General Counsel cc: Law Department 4.5 Attorneys' Fees. In the event that attorneys' fees or other costs are incurred to secure performance of any of the obligations set forth in this Agreement, to establish damages for the breach thereof, or to obtain any other appropriate relief, whether by way or prosecution or defense, the prevailing party (as determined by the judge in the judge's sole discretion) shall be entitled to recover reasonable attorneys' fees and costs incurred therein. 4.6 Counterparts. This Agreement may be executed in one or more counterparts for the convenience of the parties hereto, all of which together shall constitute one and the same instrument. 4.7 Binding Agreement; Assignment. This Agreement shall be binding on, and inure to the benefit of, the parties hereto and their respective representatives, successors, and assigns, but neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assigned or delegated by any of the parties hereto, whether by operation of law or otherwise, without the prior written consent of the other party (which consent shall not be unreasonably withheld), nor is this Agreement intended to confer upon any other person other than the parties hereto any rights or remedies hereunder. Any assignment or delegation in violation of this Agreement shall be null and void. 4.8 Waiver. No delay on the part of either party in exercising any of its respective rights hereunder, nor the failure to exercise the same, nor the acquiescence in or waiver of a breach of any term, provision or condition of this Agreement shall be deemed or construed to operate as a waiver of such rights or acquiescence thereto except in the specific instance for which given. 4.9 Severability. If any provision of this Agreement is declared or found to be illegal, unenforceable or void, then each party will be relieved of its obligations arising under such provision to the extent such provision is declared or found to be illegal, unenforceable or void (it being the intent and agreement of the parties that this Agreement shall be deemed amended by modifying such provision to the extent necessary to make it legal and enforceable while preserving its intent or, if that is not possible, by substituting therefor another provision that is legal and enforceable and achieves the same objective), and each provision not so affected will be enforced to the full extent permitted by law. 4.10 Entire Agreement. This Agreement (and the exhibits attached hereto) contains the entire understanding of the parties relating to the subject matter of this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements and understandings relating to such subject matter. This Agreement cannot be modified, amended or terminated except in writing signed by the party against whom enforcement is sought. 4.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS PRINCIPLE OR RULE THAT MIGHT REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. EACH PARTY AGREES THAT THIS AGREEMENT IS FULLY PERFORMABLE IN DALLAS COUNTY, TEXAS, AND THAT ANY ACTION, DISPUTE OR PROCEEDING ARISING OUT OF OR RELATED IN ANY WAY TO THE SUBJECT MATTER OF THIS AGREEMENT SHALL BE BROUGHT SOLELY IN A COURT OF COMPETENT JURISDICTION SITTING IN DALLAS, DALLAS COUNTY, TEXAS. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE JURISDICTION OF ANY SUCH COURT AND HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF ANY ACTION OR PROCEEDING AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF THE PLACE OF RESIDENCE OR DOMICILE OF ANY PARTY THERETO. 4.12 Other Documents. Each party hereto agrees to execute any and all documents, and to perform such other acts, that may be necessary or expedient to further the purposes of this Agreement. 4.13 Force Majeure. Each party hereto shall be excused from performance hereunder for any period and to the extent that it is prevented from performing any services pursuant hereto, in whole or in part, as a result of delays caused by the other party or by an act of God, war, civil disturbance, court order, labor dispute, third party nonperformance, or other cause beyond its reasonable control, including without limitation failures or fluctuations in electrical power, heat, light, air conditioning or telecommunications equipment, and such nonperformance shall not be a default hereunder or a ground for termination hereof. Notwithstanding the foregoing, in the event such condition exists greater than thirty (30) days, either party may terminate this Agreement by giving the other party written notice of termination, which termination shall be effective as of the date set forth in such notice. 4.14 Headings. The section headings used herein are for reference and convenience only, and shall not enter into the interpretation hereof. 4.15 Trademarks. SSG shall use its own name or trademarks in all dealings. It may not use any trademarks or tradenames or rights to use same belonging to Emerson and/or its subsidiaries or affiliates (other than SSG's) without Emerson's prior written consent in each instance. To the extent Emerson gives such consent, SSG may use such trademarks and "EMERSON" brand and product names and such other brand name(s) under which the products may hereinafter be marketed in the United States or on the world wide web by Emerson and/or its subsidiaries or affiliates (other than SSG's) (collectively, the "Brand Names and Marks") only in connection with the performance of the SSG Services. Emerson may withdraw such consent at any time. Thereafter, except as provided below, no advertising or other use of the Brand Names and Marks may be made by SSG without Emerson's prior written approval in each instance. All use of the Brand Names and Marks and all goodwill associated therewith shall inure to the benefit of Emerson. SSG shall have no interest in or rights to the Brand Names or Marks or any of them nor shall SSG have or accrue any interest in or to the goodwill associated therewith. Upon expiration or earlier termination of this Agreement, SSG shall discontinue all use of the Brand Names or Marks in advertising or otherwise, and shall remove all signs and displays relating thereto and shall return to the Emerson at Emerson's expense, all signs, displays and other writings and materials relating thereto; provided, however, the foregoing does not apply to any advertising in the process of being printed or in inventory that also includes SSG's products (including, without limitation, catalogs). SSG is not and this Agreement does not constitute SSG as being a holder of a license or permitted to use the Brand Names or Marks nor shall this Agreement be deemed to make SSG a franchisee. Emerson shall use its own name or trademarks in all dealings. It may not use any trademarks or tradenames or rights to use same belonging to SSG and/or its subsidiaries or affiliates (other than Emerson's) without the SSG's prior written consent in each instance. 4.16 No Third Party Beneficiaries. This Agreement and the rights and obligations hereunder do not and shall not confer any rights to any third parties and no third parties shall have any rights under this Agreement. 4.17 Survival. Paragraphs 2.1, 2.2, 3.5, 4.1, 4.2, 4.4, 4.5, 4.11, 4.15, and 4.16 shall survive the expiration or earlier termination of this Agreement. 4.18 Waiver of Claims Under Original MSA. Emerson and SSG hereby waive any and all prior breaches or defaults of any term, provision or condition of the Original MSA by the other party. IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. SSG: SPORT SUPPLY GROUP, INC. By: /s/ TM Babilla -------------- Name: Terrence M. Babilla ------------------- Title: COO --- EMERSON: EMERSON RADIO CORP. By: /s/ Elizabeth J. Calianese -------------------------- Name: Elizabeth J. Calianese ---------------------- Title: SVP-HR, Corp. Sec. ------------------ EX-31.1 3 b407989_ex31-1.txt CERTIFICATIONS EXHIBIT 31.1 Certifications PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002 I, GEOFFREY P. JURICK, CERTIFY THAT: 1. I HAVE REVIEWED THIS AMENDMENT TO THE ANNUAL REPORT ON FORM 10-K OF EMERSON RADIO CORP. ("ANNUAL REPORT"); 2. BASED ON MY KNOWLEDGE, THIS ANNUAL 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 ANNUAL REPORT; 3. BASED ON MY KNOWLEDGE, THE FINANCIAL STATEMENTS, AND OTHER FINANCIAL INFORMATION INCLUDED IN THIS ANNUAL 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 ANNUAL REPORT; 4. THE REGISTRANT'S OTHER CERTIFYING OFFICERS 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)) 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 ANNUAL REPORT IS BEING PREPARED; B) EVALUATED THE EFFECTIVENESS OF THE REGISTRANT'S DISCLOSURE CONTROLS AND PROCEDURES AND PRESENTED IN THIS ANNUAL REPORT OUR CONCLUSIONS ABOUT THE EFFECTIVENESS OF THE DISCLOSURE CONTROLS AND PROCEDURES AS OF THE END OF THE PERIOD COVERED BY THIS ANNUAL REPORT BASED ON SUCH EVALUATION; AND C) DISCLOSED IN THIS ANNUAL 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 OFFICERS 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: JULY 29, 2005 /S/ GEOFFREY P. JURICK ---------------------- CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT A signed original of this written statement required by Section 302 has been provided to Emerson Radio Corp. and will be retained by Emerson Radio Corp. and furnished to the Securities and Exchange Commission or its staff upon request. 2 EX-31.2 4 b407989_ex31-2.txt CERTIFICATIONS EXHIBIT 31.2 Certifications PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002 I, GUY A. PAGLINCO, CERTIFY THAT: 1. I HAVE REVIEWED THIS AMENDMENT TO THE ANNUAL REPORT ON FORM 10-K OF EMERSON RADIO CORP. ("ANNUAL REPORT"); 2. BASED ON MY KNOWLEDGE, THIS ANNUAL 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 ANNUAL REPORT; 3. BASED ON MY KNOWLEDGE, THE FINANCIAL STATEMENTS, AND OTHER FINANCIAL INFORMATION INCLUDED IN THIS ANNUAL 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 ANNUAL REPORT; 4. THE REGISTRANT'S OTHER CERTIFYING OFFICERS 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)) 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 ANNUAL REPORT IS BEING PREPARED; B) EVALUATED THE EFFECTIVENESS OF THE REGISTRANT'S DISCLOSURE CONTROLS AND PROCEDURES AND PRESENTED IN THIS ANNUAL REPORT OUR CONCLUSIONS ABOUT THE EFFECTIVENESS OF THE DISCLOSURE CONTROLS AND PROCEDURES AS OF THE END OF THE PERIOD COVERED BY THIS ANNUAL REPORT BASED ON SUCH EVALUATION; AND C) DISCLOSED IN THIS ANNUAL 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 REASONABLE LIKELY TO MATERIALLY AFFECT, THE REGISTRANT'S INTERNAL CONTROL OVER FINANCIAL REPORTING; AND 5. THE REGISTRANT'S OTHER CERTIFYING OFFICERS 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 CONTROLS OVER FINANCIAL REPORTING WHICH ARE REASONABLY LIKELY TO ADVERSELY AFFECT THE REGISTRANT'S ABILITY TO RECORD, PROCESS, SUMMARIZE AND REPORT FINANCIAL INFORMATION; AND 1 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: JULY 29, 2005 /S/ GUY A. PAGLINCO ------------------- VICE PRESIDENT AND CHIEF FINANCIAL OFFICER A signed original of this written statement required by Section 302 has been provided to Emerson Radio Corp. and will be retained by Emerson Radio Corp. and furnished to the Securities and Exchange Commission or its staff upon request. 2 EX-32 5 b407989_ex32.txt SECTION 1350 CERTIFICATIONS EXHIBIT 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 IN CONNECTION WITH THE AMENDMENT TO THE ANNUAL REPORT OF EMERSON RADIO CORP., (THE "COMPANY") ON FORM 10-K-A FOR THE PERIOD ENDED MARCH 31, 2005, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "REPORT"), GEOFFREY P. JURICK, CHIEF EXECUTIVE OFFICER, AND GUY A. PAGLINCO, CHIEF FINANCIAL OFFICER, OF THE COMPANY EACH HEREBY CERTIFIES PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002, THAT: (1) THE REPORT FULLY COMPLIES WITH THE REQUIREMENTS OF SECTION 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 AS AMENDED; AND (2) THE INFORMATION CONTAINED IN THE REPORT FAIRLY PRESENTS, IN ALL MATERIAL RESPECTS, THE CONSOLIDATED FINANCIAL CONDITION OF THE COMPANY AS OF THE DATES PRESENTED AND THE CONSOLIDATED RESULT OF OPERATIONS OF THE COMPANY FOR THE PERIODS PRESENTED. DATED: JULY 29, 2005 BY: /S/ GEOFFREY P. JURICK GEOFFREY P. JURICK CHIEF EXECUTIVE OFFICER BY: /S/ GUY A. PAGLINCO VICE PRESIDENT AND CHIEF FINANCIAL OFFICER The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Form 10-K/A or as a separate disclosure document. A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, OR OTHER DOCUMENT AUTHENTICATING, ACKNOWLEDGING, OR OTHERWISE ADOPTING THE SIGNATURE THAT APPEARS IN TYPED FORM WITHIN THE ELECTRONIC VERSION OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906, HAS BEEN PROVIDED TO EMERSON RADIO CORP. AND WILL BE RETAINED BY EMERSON RADIO CORP. AND FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST. -----END PRIVACY-ENHANCED MESSAGE-----