-----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, SBiW8EhwXHIPL8pMXkjM1DhyCA+unjpIO9UFH9oCXGfQ5+4lFTtVoQXCYdI2NX30 0ABkBifNitocvL4PlnWZyw== 0000950134-96-005854.txt : 19961111 0000950134-96-005854.hdr.sgml : 19961111 ACCESSION NUMBER: 0000950134-96-005854 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961108 ITEM INFORMATION: Other events FILED AS OF DATE: 19961108 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPORT SUPPLY GROUP INC ET AL CENTRAL INDEX KEY: 0000872855 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-CATALOG & MAIL-ORDER HOUSES [5961] IRS NUMBER: 752241783 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10704 FILM NUMBER: 96656541 BUSINESS ADDRESS: STREET 1: 1901 DIPLOMAT DRIVE CITY: FARMERS BRANCH STATE: TX ZIP: 75234 BUSINESS PHONE: 2144849484 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): November 8, 1996 (November 5, 1996) Sport Supply Group, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-10704 75-2241783 - ----------------- ----------------- ----------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 1901 Diplomat Drive, Farmers Branch, Texas 75234 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (214) 484-9484 Not Applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) 2 Item 5. Other Events On October 11, 1996, Emerson Radio Corp. ("Emerson"), a beneficial owner of approximately 670,000 shares of the Common Stock of Sport Supply Group, Inc. ("SSG"), delivered a written proposal to the Board of Directors of SSG, in which Emerson proposed to acquire a controlling interest in SSG (the "Original Proposal"). Under the terms of the Original Proposal, Emerson proposed to purchase from SSG an additional 1,333,333 shares of newly issued common stock, $.01 par value per share (the "Common Stock") of SSG at a purchase price of $6.00 per share (for an aggregate consideration of approximately $8 million) and proposed to purchase, for an aggregate consideration of $800, 5-year warrants to acquire an additional 1,333,333 shares of Common Stock at an exercise price of $6.50 per share, subject to adjustments. Had SSG accepted the Original Proposal, upon acquisition of such shares, but prior to the exercise of any of such warrants, Emerson would have owned approximately 25% of the outstanding shares of the Common Stock. Assuming exercise of all such warrants, Emerson would have owned approximately 35% of the outstanding shares of the Common Stock. Emerson also requested registration rights on the resale of the shares of Common Stock it would have owned, as well as on the exercise and resale of the shares of Common Stock it could have acquired under the warrants. In addition, Emerson proposed to arrange for foreign trade credit financing of $2 million for the benefit of SSG to supplement existing credit facilities. As part of Emerson's Original Proposal, SSG was required to cause a majority of the members of SSG's Board of Directors to consist of Emerson's designees. Emerson's Original Proposal contemplated that SSG's current Chairman of the Board and Chief Executive Officer would have resigned and been retained by SSG as a consultant, on terms to have been negotiated. Emerson would have caused SSG to comply with its current contractual obligations to such officer upon the change of control. All other members of senior management would have been retained. The Original Proposal was subject to various conditions, including negotiating and executing definitive documentation. The foregoing description of the Original Proposal is qualified in its entirety by reference to the Original Proposal. The Original Proposal is attached as an Exhibit to a Form 8-K that was filed by SSG with the Securities and Exchange Commission on October 22, 1996. On November 5, 1996, Emerson delivered to SSG a revised proposal (the "Revised Proposal"). Under the terms of the Revised Proposal, Emerson would purchase from SSG 1,714,286 shares of newly issued Common Stock of SSG at a purchase price of $7.00 per share (for an aggregate consideration of approximately $12 million cash). In addition, under the Revised Proposal, Emerson would purchase, for an aggregate consideration of $600, 5-year warrants to acquire an additional 1,000,000 shares of Common Stock at an exercise price of $7.50 per share, subject to adjustments. Based upon the number of shares of Common Stock outstanding on the date hereof and assuming the Revised Proposal is accepted in its current form, upon acquisition of such shares (but prior to the exercise of any of such warrants) Emerson would own approximately 28% of the outstanding shares of Common Stock. Emerson would own approximately 35% of the outstanding shares of Common Stock upon exercise of all the warrants. Under the Revised Proposal, Emerson clarified its position with respect to language in the Original Proposal that appeared to require SSG's current Chairman of the Board and Chief Executive Officer to resign as an employee, officer, and director of SSG and each of its subsidiaries prior to closing. The Revised Proposal clarifies Emerson's intention to cause SSG to honor its contractual commitments to such officer, without any requirement that such officer resign or enter into a consulting agreement or non-competition agreement prior to closing. Emerson indicated its intent to pursue a revised arrangement with such officer, but the finalization of such arrangement would not be a condition to closing. Finally, the Revised Proposal contemplates that Emerson be paid a termination fee of $750,000, rather than $1,000,000 as contemplated by the Original Proposal, if a transaction with Emerson is not consummated for any reason except for the willful failure to close by Emerson. Except as modified in the Revised Proposal, the terms of the Original Proposal remain unchanged, except as may be modified in negotiation and set forth in definitive documentation executed by Emerson and SSG. A Special Committee of Directors formed by SSG's Board of Directors is reviewing the Revised Proposal and has arranged to meet with representatives from Emerson. 2 3 Any description or disclosure made in this Form 8-K with respect to the Revised Proposal is qualified in its entirety by reference to the Revised Proposal. The Revised Proposal is attached hereto as an Exhibit and is incorporated herein by reference. On a matter unrelated to Emerson's proposals, effective October 30, 1996, SSG's Principal Accounting and Financial Officer resigned from SSG. SSG is currently seeking to hire a Chief Financial Officer. (a) Exhibits Exhibits Index:
DESCRIPTION OF EXHIBIT ---------------------- 5(a) Letter to Sport Supply Group, Inc. from Emerson Radio Corp. dated November 5, 1996
3 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Sport Supply Group, Inc. Date: November 8, 1996 By: /s/ Michael J. Blumenfeld ---------------------------- Michael J. Blumenfeld Chairman of the Board and Chief Executive Officer 4 5 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 5(a) Letter to Sport Supply Group, Inc. from Emerson Radio Corp. dated November 5, 1996
EX-5.(A) 2 LETTER TO SPORT SUPPLY GROUP, INC. 1 EXHIBIT 5(a) November 5, 1996 Mr. Terry Babilla Mr. Bob Philip Mr. Bill Watkins Sport Supply Group, Inc. 1901 Diplomat Farmers Branch, Texas 75234 RE: REVISED EMERSON RADIO CORP. ("EMERSON") ACQUISITION PROPOSAL FOR SPORT SUPPLY GROUP, INC. ("SSG") Gentlemen: We are in receipt of correspondence dated November 1, 1996 and November 4, 1996 addressed to our counsel, Jeff Davis, from Terry Babilla, advising Emerson that the SSG Board of Directors has designated a Special Committee to enter into substantive negotiations with Emerson regarding its Proposal of October 11, 1996 as amended and clarified hereby. Emerson appreciates the opportunity to enter into substantive discussions with the Special Committee and to conclude a transaction as promptly as possible. It is our intention to follow the schedule suggested by LaSalle Business Credit, Inc. which anticipated that a closing could occur within two business weeks after Emerson and SSG had entered into a binding agreement. We believe that the two-week period will allow us to complete negotiations and documentation with LaSalle and/or Congress Financial Corporation and will permit SSG to complete its documentation (e.g., fairness opinions) and receive any necessary third party approvals. Accordingly, in the interest of prompt consummation of a recapitalization and refinancing transaction for SSG and subject to our understanding, as set forth above, of the role and authority of the Special Committee, Emerson hereby amends and clarifies its October 11, 1996 Proposal, as follows: 1. Emerson, or a direct or indirect subsidiary of Emerson ("the Purchaser"), will purchase directly from SSG 1,714,286 shares of newly issued common stock (the "Stock") of SSG at a purchase price of $7.00 per share, for aggregate consideration of approximately $12 million. 2. The Purchaser will purchase from SSG, for $600, warrants (the "Warrants") to purchase an aggregate of 1,000,000 shares of Stock at an exercise price of $7.50 per share, subject to customary anti-dilution adjustments. The Warrants shall have a term of five years and have such other terms as shall be acceptable to Emerson. 3. Emerson will not require Michael Blumenfeld to resign as an employee, officer, and/or director of SSG and each of its subsidiaries prior to closing. Emerson will cause SSG to honor its contractual commitments to Mr. Blumenfeld. Mr. Blumenfeld will not be required, nor shall it be a condition to the transaction that he be required, to enter into any consulting agreement or non-competition agreement prior to closing. The foregoing should not be construed as an indication that Emerson's position with respect to Mr. Blumenfeld has changed from its initial Proposal. Rather, it is Emerson's intention to clarify that the resolution of these matters outside the scope of pre-existing agreements is not a precondition to closing of the financing transaction, and is not an impediment to the prompt and necessary recapitalization of SSG. 4. A termination fee shall be payable to Emerson by SSG equal to $750,000 if a transaction with Emerson is not consummated for any reason except for the willful failure to close by Emerson. 2 Except as modified or clarified as specifically set forth above, the terms of the October 11, 1996 Proposal shall remain unchanged, except as may be modified in negotiation and set forth in definitive documentation executed by Emerson and SSG. We hope that the foregoing revisions to our Proposal assist the Special Committee in bringing this matter to a rapid resolution. We look forward to meeting with you in Memphis. Very truly yours, /s/ Eugene I. Davis Eugene I. Davis President EID/sw cc: G. Jurick J. Walker J. Davis -----END PRIVACY-ENHANCED MESSAGE-----